Silicon Valley and the East Bay Hills from Black Mountain

 

View of San Francisco from Black Mountain

 

Review: Coraline

Scarlet considers this one of her two best books of 2005, so I checked it out of the library and read it. It's not a bad book by any means, but I don't think it's anything special. It's definitely not even in the same class as StarDust, which I consider to be the best of Gaiman's prose works (by the way, buy the one with Charles Vess illustrations, which is the way the book was published --- the "words only" version are for snotty people who don't think that comic books can't be considered literature).

The horror I find to be rather pedestrian, but then again, I don't think I was ever the kind of kid (or now, adult) who could be horrified or scared by words on a page --- visual horror can terrify me, but not novels or books. The real horror in the book, for me, is the portrait of a child thoroughly neglected by her parents. I guess I can be grateful that my parents always found time to play with me, and gave me such imaginative tools and toys in my mind that I was never ever bored, either as an adult or as a child.

Anyway, it's a short book, so it's not a waste of time.

Two interesting articles in this week's New Yorker

First, there's a Book Review of The Man Who Knew Too Much, a biography of Alan Turing that doesn't sound like it's worth reading. However, the review provides a nice, condensed summary of Turing's life that's very much worth reading. The definitive book on Turing is Alan Turing: Enigma, which I read a while ago and remember as being quite good.

The second great article is an article by Malcolm Gladwell about Profiling. It busts the typical myths about profiling, and uses excellent journalistic technique to illustrate his point. I subscribed to The New Yorker on the basis of Gladwell's visit to Google, and if only every issue was like this one I'd feel like I got my money's worth.

Of course, what annoys me is that we don't have a magazine even half as good as The New Yorker here in the Bay Area. We get crappy stuff like Gentry Magazine, a magazine for people who worship wealth and its privileges, and Sunset Magazine, a vapid lifestyle magazine with no depth. Ah well. In exchange we get good weather and a fabulous outdoor life. Now, if only my copy of the Rivendell Reader would just show up! Now that's a magazine I'm proud to have contributed to, and one that could only exist in the San Francisco Bay Area.

Review: Singularity Sky

This was Charles Stross's first novel. An information war is being waged on Rochard's World, a colony of the New Republic, an authoritarian regime. The regime's response is typically militaristic, but two representative of external agencies attempt to intervene, resulting in a spy story set in a science fiction universe where time travel is possible. Stross was a computer scientist, so at least he attempts to get his physics right, and make references to John Conway's Game of Life, which a lot of software engineers and mathematicians are familiar with.

The characters, alas, are not very developed, and one gets the idea that they exist for the sole purpose of the plot, rather than being real people you could meet and like. In this, at least, Stross has the same problems as other hard science writers like Greg Egan and Stephen Baxter. Just because you're a real scientist/mathematician of some sort doesn't guarantee poor characters, as Vernor Vinge aptly demonstrates.

The sequel to this novel is Iron Sunrise.

Review: Unconventional Success

It's unfortunate that investment books that have sensible advice rarely reach the right audience --- the sophisticated individual investor already knows most of what they have to offer, if they've even read one of the classics, such as A Random Walk Down Wall Street, while the naive investor is unlikely to read the book, since that's the reason why they are naive.

David Swensen comes from managing one of the most successful college endowment investment programs, the one at Yale University (one reason why I can't imagine donating money to a private university is that they have the resources to do well even without charging exorbitant fees, but they do so anyway). Large college endowments can do many things that individual investors cannot --- for instance, they can hold entire office buildings for many years in a diversified porfolio and have it still be only 10 to 20% of their assets. Most individual investors by contrast, can afford to own just their own homes, and for most such investors, that home comprises upwards of 50% of their assets (hence the phrase, "house rich, cash poor"). Bereft of such tools, Swensen does not offer much advice and insight that other, more pedestrain authors haven't already written.

Here are the interesting titbits in the book:

• Core Asset classes include: Domestic Stocks, Foreign Stocks (divided into Developed Markets and Emerging Markets), Treasury Bonds, Tips, and Real Estate. Allocating your money amongst these classes will provide reasonably good opporunity for growth. Swensen does provide a sample allocation, but does not provide any data (or advise) about adjusting the allocation for your particular position in the life cycle.
  
• Corporate bonds do not provide any diversity, and are much worse than Treasuries from an asset-allocation point of view.
• Foreign bonds provide currency risk without the high returns of foreign equity. Since currency speculation is a zero-sum game, foreign bonds are best avoided.
  
• Venture Capital provides surprisingly low returns, mostly because high management fees kill the returns from mediocre VCs, while excellent VCs have such high minimums that most individual investors are locked out.
• Hedge funds also have a poor record, because survivorship bias means that only high performing ones are not shut down after a short time.
• Tax-Exempt bonds are surprisingly dangerous for individual investors.
• Rebalancing is important, since it enforces a "buy low sell high" discipline. When Swensen ran the Yale portfolio, they rebalanced every day! Obviously, due to transaction costs, this should not be attempted by individual investors.
  
• Mutual funds are extremely poor in performance. In fact, honest mutual fund companies are so rare that Swensen names the one honest one. (It's Long Leaf Partners Funds, managed by SouthWestern Asset Management, a privately held company whose employees and management are co-invested in the funds to an incredibly high degree --- naturally, all of Long Leaf's funds are now closed to new investors!) All the others (Fidelity, Putnam, to just name a few) have been involved in so many financial scandals that their commitment to their "customers" (really, victims) is suspect. Page after page was devoted to various mutual fund scandals.
  
• ETFs can vary in quality, so it really makes sense to do your research!
• Vanguard and TIAA-Cref, the two non-profit companies that operate mostly indexed funds (and a few actively managed ones), are the only places where it makes sense to park your money long term. (If you don't already know this, you're probably not reading this blog anyway!)
  

All in all, a surprisingly small number of good bits from a distinguished author. He doesn't mention, for instance,I Bonds, which are an excellent vehicle for most individual investors, because he's not used to managing portfolios less than a few billion dollars. He doesn't mention basic tax trade-offs (Roth versus Regular IRAs and 401ks), or the SEPP 72(t) exception.

All in all, while I'm glad I read the book, the practical advice I got from Brad DeLong last year from a 15 minute conversation while he was at the Google campus did more for my portfolio. On the other hand, his comments about corporate bonds and municipal bonds were very much worth reading, so I'm glad I checked this book out of the Santa Clara County Library.

Economic theory teaches the law of one price, viz., that in freely competitive markets identical goods or services trade at identical prices. In the case of index-fund management, the portfolio management fees charged by various service providers should be identical, or nearly so. Otherwise, rational consumers transfer funds from high-cost providers to low-cost providers, thereby driving the greedy (or inefficient) fund-management companies to reduce prices or exit the business.

Economic theroy fails. In a 2002 study, Morningstar identified fifty-seven S&P 500 index funds that charged more than Vanguard's market-leading 0.18 percent annual fee. The average yearly expense ratio of the non-Vanguard index managers amounted to an over-the-top 0.82 percent...

Had the expensive index funds emanated from a disreputable bunch of bucket shops, investors might conclude that thee poor saps who chose the high-cost funds deserved the consequences of paying active-management fees for less than passive-management results. In fact, the roster of high-fee index fund managers include two of the investment management world's most venerable names --- Morgan Stanley Funds and Scudder Investments.

West Old La Honda Road

 

No, these are NOT natural rock formations

 

View from Harkins Ridge Trail

 

View of the Pacific from Windy Hill OSP

I've learnt not to expect too much from a point and shoot, even the 8 megapixel Canons. But sometimes, I get pleasantly surprised. 

Talking with Grant at the Rivendell Social 1/22/06

 
 

Movie Review: Brothers Grimm

Terry Gilliam presents a fantastic vision of the Brothers Grimm as a pair of con men who are finally faced with justice and sent to confront a truly fantastic situation where they truly have to become heroes. Gilliam manages to sneak in images of Hansel & Greta, the Gingerbread Man, Little Red Riding Hood, amongst others, but those stories while evoking the stories of the original Grimm brothers aren't central to the plot.

It being a Gilliam movie, I kept waiting for the horror or the twist, but it never happened. It truly is the only Gilliam movie I've seen that actually turns out to be what it claims to be, a straight-forward tale told competently. Unfortunately, we've expected more than simply competence from Gilliam, so it was a bit of a let-down.

My other 20% project

Unlike Prophit, gtags will never make it into the New York Times. It is pretty cool to get onto the front page of code.google.com, though. But this is the project I spend most of my 20% time on, and we now have a full time intern working on it as well. There are a lot of obvious refinements possible, but I wanted to get it out there even in this rather raw form to see if there's any uptake at all in the open source community.

I don't think gtags is useful until you have about a million or so lines of source code (though I'd love to find out if I'm wrong!). But if your project has that much code and isn't susceptible to IDEs (C++/C code typically has this property), then I think that having something like gtags around can be a great help. I certainly wrote this tool when I was learning my way around the google sourcebase, and it was valuable enough for other engineers to start using it as well. "Next bench" projects are some of the more gratifying projects you can do, because your customers are other engineers, and those are people you work with every day!

Prospective interns: I've already filled the summer 2006 position, but if you're interested in an internship/co-op with Google in the fall or even winter, and would like to work on gtags, feel free to let the recruiter (or me) know!

A funny post on the Bush presidency

The Bush presidency as a text adventure game. He left out all the tax shenanigans that Bush did, but it's still hilariously funny!

Rivendell Social Ride #1

Lisa & I did 55 miles or so of riding today with the "Rivendell Social" down in San Juan Bautista. Well, the terrain was so ridiculously tandem friendly that we didn't stay social for long and just barrelled along with a couple of other singles and a trike taunting us. I think our average speed ended up being about 15mph, which is unusually good for us. My altimeter read only 2400' of climbing, so that accounts for it, along with the nice tailwind we got on the flat parts. The weather was warm and sunny, and of course getting to see Grant Petersen is great!

Winning the Green Card Lottery

The latest New Yorker has a great article about a couple from Peru who won the Green Card lottery and then moved to the US where the man became a food service worker despite knowing no English and being a mining engineer in Peru (a sought after position on top of the food chain). The reason: the children. It's a stark reminder that despite all the wage compression at the bottom 95% of the U.S., this country is still very much seen as the land of opportunity for most of the rest of the world, if not for the poor immigrants who show up with next to nothing, then (at least in perception) in the hopes that their children will have a better life here than in the home country.

Review: Serenity

Lots of folks have reviewed the movie Serenity, many with more eloquence, passiong, and credibility than I would have. It's a great movie, and if you haven't seen it, you should. I'll review the DVD extras. The crown jewel, of course, is Joss Whedon's sardonic commentary on the movie itself. It's not very special, but he does explain why certain scenes were cut and saved as DVD extras, and how the lighting is done, which is great if you're a photography buff (which I am).

The "making of" features and the various other features round it out to make it complete for fans of the movie. Unfortunately, it's still not enough to get me to buy it. (Then again, watching firefly the series, as good as it was, wasn't enough to get me to buy the DVD set either)

New Cell Phone

I switched cell phones, cell service providers, and cell phone #. If you're a friend and need my new cell #, send me e-mail and I'll give you my new phone #.

Review: Bend it like Beckham

This is not a deep movie. It's a comedy hybrid of the inspirational sports movie and the cultural comedy. Set in Britain, the story is of a soccer mad high schooler (Jessie) about to graduate who is sported by a local member of the women's soccer team (Jules). Since her (Indian) parents don't approve, Jessie plays with Jules' team without their knowledge, lying about having a summer job. What follows is a series of misunderstandings, betrayals, followed by the film's inspirational message driven home with all the subtlety of a soccer ball headed into the net.

That said, I liked the film quite a bit. Soccer to me is still the sport I grew up with (despite never being any good at it), and is to me a far more beautiful game than American football. The game flows with an intensity and grace that makes top level play enjoyable to watch. And of course, in particular, the USA dominates women's soccer despite a sporting culture that doesn't comprehend the off-side rule (hilariously explained during the movie by Jules' dad as an aside) or the concept that a sport might exist without advertising breaks. That makes the entire film and its premise (that being given a soccer scholarship to Santa Clara University would be a great thing to have) somewhat believeable.

The cultural comedy aspect is enjoyable and very funny, even to Lisa who is not as much of a fan of Indian food as I am. So two thumbs up. This is a delightful film to watch when you're down with a cold and your brain isn't working (which was Lisa's state of mind when watching it), or when you're just in the mood for something light. The message is heavy handed but fits its genre. Just don't expect to come away from the movie with a good understanding of the off-side rule.

Republicans are Evil: Part V

This isn't surprising, considering that the administration designed its Medicare plan to serve its ideological agenda--privatizing government services and enriching special interests like the insurance and pharmaceutical industries--rather than senior citizens. The original Medicare law reflects a rather different tradition: the New Deal. Its architects believed that protecting people from economic and medical risk was a job that only a robust and, yes, big government could do properly. Of course, that's a pretty unfashionable idea nowadays. But that hardly makes it wrong.

Of course, this nation is only getting what it deserves. We were too stupid to see through the insurance company/drug company "hilary-care" scare in the 1990s, so now we get the privatized expensive inefficient care that Republicans want you to have. If you're not wealthy, voting Republican is a very dumb thing to do. In the long run, perhaps, as more Americans lose health insurance, maybe we'll vote in a sensible government. But it might take a lot pain and suffering to do so. (Think about it, Enron didn't get the Bush administration evicted)