Having left the Lakes district yesterday --- what a change in terrain! From killer views with killer climbs (yes, worse than the local Black Mountain), to gentle but desolate Moors, this walk definitely has provided me with views so splendid that I can barely believe that I'm walking across a completely developed first world country.
The weather has been nothing short of amazing. I hope our luck holds out. We even went sailing on Ullswater, hiring a dinghy sailboat for the lake for 2 hours and having a blast despite this being my first time in 5 years since I did any dinghy sailing.
One thing though --- this is definitely a challenging walk. When I set this up, my attitude was, this is England --- how high can the mountains be? They might not be super high, but the trails are strewn with rocks to prevent erosion and this makes the climbs super super tough, and the descent particularly tough on joints. Plus --- the Lakes district doesn't believe in having any signs anywhere, so the navigational challenge makes things super super tough.
But the people are nice (and they speak English!), and we've met more than our share of friendly friendly people who go out of their way to make visitors feel welcome. England is an expensive country, but so far has been well worth the visit. Now... back to our regular foot soaking...
(Still no wireless, so no picture posting for now...)
Monday, June 05, 2006
Monday, May 29, 2006
Scott Burns agrees with me on the new issue of I-bonds
My original analysis seems like it matches up with Burn's.
Day 1: Coast to Coast
Last evening was gorgeous, but we woke up to rainy weather. (Because of jet lag, we woke up at 5:30am, but had gotten about 8 hours of sleep, so it was good) We took off with a little bit of mist in the air, and then the rain started coming down, but our hiking umbrellas came through and were quite good.
Then the sun came out, and bathed the coast in all its glory. It was so beautiful that it took us nearly 4 hours to hike the first 5 miles, we were stopping to shoot so frequently!
Then we cut across pieces of the English country side that were quite beautiful, except a few boggy fields which slowed us down and dirtied our boots. Way finding was more than a little precarious, especially after I discovered that they'd been quite a bit of tree cutting on Dent Fell, and my coast to coast guidebook was just a couple of years out of date. But we did make it through by dead-reckoning and instinct (when in doubt, go up hill), and then were lucky enough to have locals around to ask directions of.
Dinner was at the Ennerdale View B&B, with its gorgeous views. We're quite footsore, however, and Lisa has already gone to bed. (A first for her, beating me to bed!)
Also, the Tomlin Guest House we stayed in the first night was also excellent --- a great value, and such friendly people! Everyone we've met so far has been very friendly, from the airport information person to the taxi driver who detoured out of an errand he was running for his family to take us to our guest house because otherwise we'd have to wait 20 minutes!
Aside from the footsoreness, the muddy spots and the occasional rain, I'm loving this trip so far.
Then the sun came out, and bathed the coast in all its glory. It was so beautiful that it took us nearly 4 hours to hike the first 5 miles, we were stopping to shoot so frequently!
Then we cut across pieces of the English country side that were quite beautiful, except a few boggy fields which slowed us down and dirtied our boots. Way finding was more than a little precarious, especially after I discovered that they'd been quite a bit of tree cutting on Dent Fell, and my coast to coast guidebook was just a couple of years out of date. But we did make it through by dead-reckoning and instinct (when in doubt, go up hill), and then were lucky enough to have locals around to ask directions of.
Dinner was at the Ennerdale View B&B, with its gorgeous views. We're quite footsore, however, and Lisa has already gone to bed. (A first for her, beating me to bed!)
Also, the Tomlin Guest House we stayed in the first night was also excellent --- a great value, and such friendly people! Everyone we've met so far has been very friendly, from the airport information person to the taxi driver who detoured out of an errand he was running for his family to take us to our guest house because otherwise we'd have to wait 20 minutes!
Aside from the footsoreness, the muddy spots and the occasional rain, I'm loving this trip so far.
Friday, May 26, 2006
Going on vacation...
We're finally embarking on our coast to coast walk! I might be on-line sporadically long enough to post pictures and reply to friends, but don't expect heavy posting.
Monday, May 22, 2006
More Mac Woes
My Mac Mini woes are not over. 3 days after receiving my replacement Mac Mini, Mac OS X has started hanging. It works for about 3 minutes after booting up, but after that hangs. Nothing works, so the only solution now is a reinstall of OS X.
This time, I know it's not hardware problem because when I boot into Windows XP, it's solid as a rock. (The Mac hardware test CD works too, and proclaims the hardware solid)
Ah well. If at any time there's a time to do a reinstall, it's 3 days after you get a new machine, before you've done too much to it. I have to say, at this point, I'm really thinking that all the hype about how solid Mac OS X is is simply hype. We'll see how this goes.
This time, I know it's not hardware problem because when I boot into Windows XP, it's solid as a rock. (The Mac hardware test CD works too, and proclaims the hardware solid)
Ah well. If at any time there's a time to do a reinstall, it's 3 days after you get a new machine, before you've done too much to it. I have to say, at this point, I'm really thinking that all the hype about how solid Mac OS X is is simply hype. We'll see how this goes.
Sunday, May 21, 2006
Replacement Mac Mini
The replacement Mac Mini showed up, and it is just so slightly difference from the other machine:
- It's much quieter, it doesn't go into "full fan mode" as often as the one that died.
- For some reason, Mac OSX seems to be happy to use a little less memory on this guy.
- There's an annoying bug which refuses to turn off the Mac's internal speakers.
- Palm Desktop causes the whole thing to crash!
- It seems to hang intermittenly. (Don't blame this on Windows XP. Lisa's Acer works just fine, as does my office laptop) There's something wierd going on.
Saturday, May 20, 2006
Friday, May 19, 2006
Greg Mankiw agrees with me
From my previous post:
English and Journalism majors are simply too incompetent at complex issues to do a proper job of covering our world today.
Though maybe I should be scared that a Republican Economist agrees with me. Then again, he's agreeing with Brad DeLong as well...
English and Journalism majors are simply too incompetent at complex issues to do a proper job of covering our world today.
Though maybe I should be scared that a Republican Economist agrees with me. Then again, he's agreeing with Brad DeLong as well...
Sunday, May 14, 2006
Scott Burns is Disingenous again...
Compared to the General Fund Deficit, Social Security's impending deficit in 2040 is not a problem. [source] Medicare is in significant trouble, but before things get too bad, we'll simply be forced to have a rational, national healthcare system like all the other industrialized countries (and have better health outcomes to boot, what a tragedy), so that problem is a matter of political will, not an inevitable disaster.
The General Fund deficit, however, will persist as long as Republicans stay evil and as long as they keep winning the three branches of government. The fact that they're not currently popular doesn't mean that they won't resort to other methods of stealing the election.
The General Fund deficit, however, will persist as long as Republicans stay evil and as long as they keep winning the three branches of government. The fact that they're not currently popular doesn't mean that they won't resort to other methods of stealing the election.
Black Mountain Today
It was hot, about 83 degrees. About a mile from the top, I ran into a guy wearing a Coast-To-Coast T-shirt. I mentioned to him and his wife that Lisa & I were going to do the walk in a couple of weeks. They told me they did the trip 7 years ago, and that they were so lucky that they had only one day of rain out of about 16. That's pretty darn good, considering my own Scotland trip about 11 years ago had much more rain than that.
They did mention that the first few days was quite hilly. I asked how bad it was, and they said about 2500'. Why, I said, that's about the same height as Black Mountain! They agreed, and said that if you'd been climbing it all year, it was probably nothing scary.
This is one of the things I love about the Bay Area. No matter where else in the world you go, if someone else tells you how steep or high the mountains are, after you've asked a bit, you'll realize that it's nowhere as steep or as tough as they think it is, since the Bay Area has plenty of steep, tough hills.
They did mention that the first few days was quite hilly. I asked how bad it was, and they said about 2500'. Why, I said, that's about the same height as Black Mountain! They agreed, and said that if you'd been climbing it all year, it was probably nothing scary.
This is one of the things I love about the Bay Area. No matter where else in the world you go, if someone else tells you how steep or high the mountains are, after you've asked a bit, you'll realize that it's nowhere as steep or as tough as they think it is, since the Bay Area has plenty of steep, tough hills.
Saturday, May 13, 2006
The Paradox of Choice
This is a great video, especially since the material is fascinating (unfortunately, the cartoons he shows are copyrighted, so the video omits them, which makes it very annoying when the audience is laughing at a cartoon and you don't get to see it!). Basically, humans have several reactions when confronted with too many choices. One possible reaction is paralysis, which explains why many people don't sign up for 401(k) plans --- they don't know which fund to choose so they end up doing nothing. Another possible reaction is to spend a lot of time going through the choices in an attempt to maxmize satisfaction but in the end being disappointed, since if there are 200 choices and you're less than perfectly happy with your choice then it must be your fault. Finally, the fact that you have so many choices can make you devalue all of them.
This does seem ironic, since choice is an incredibly positive thing. My personal solution is to make a decision appropriately, and then not spend any time reflecting on its goodness or badness other than to learn what I can from it. You can't live life as one regret after another, or you'll have a very sad life. If you question all your past decisions all the time, you're not going to be very productive, either.
Finally, this video also explains why people hire agents: even though many agents are corrupt, have other conflicts of interests, or simply incompetent, for a lot of people, having an agent make the agonizing decision for you eliminates the unhappy feelings they have about making the decision themselves.
This does seem ironic, since choice is an incredibly positive thing. My personal solution is to make a decision appropriately, and then not spend any time reflecting on its goodness or badness other than to learn what I can from it. You can't live life as one regret after another, or you'll have a very sad life. If you question all your past decisions all the time, you're not going to be very productive, either.
Finally, this video also explains why people hire agents: even though many agents are corrupt, have other conflicts of interests, or simply incompetent, for a lot of people, having an agent make the agonizing decision for you eliminates the unhappy feelings they have about making the decision themselves.
An interesting financial question
Someone approached me the other day with an interesting financial quandry. I think I've analyzed it correctly, but it's worth writing down the question and the answer in case one of my readers points out an obvious flaw in my answer.
Q: I have a large amount of U.S. dollars to invest. I currently live and work in the U.S., but as I do not have a green card I do not know how long I would stay in this country or even want to be here. However, there is a significant chance that I might settle here in the long term. What should I do with my investments?
A: If this answer was something that would be resolvable in a year or so I'd just tell you to wait and see. But seeing that you're sitting on a pile of cash that you definitely will want to invest for retirement, I suggest that you build two portfolios: one in your home country and one here in the U.S. Within each portfolio you would perform your asset allocation essentially, each porfolio mirrors the other: the only difference is that one is denominated in U.S. dollars, and the other denominated in Euros.
The reason for the mirror'd accounts is that of paying round-trip costs. Let say you bought European investments in a Vanguard European Index Fund. The problem is that when you need to withdraw, you'll be paying two round-trip conversions, from Euros to U.S. dollars and back again. That's inefficient when you already have a European account and can directly trade a European index. You could also perform balancing between accounts. For instance, hold all US Equity in the American fund, and all European equity in the European account. Hold US Bonds in the American fund, and European bonds in the European account. Split your Asia-Pacific and Emerging market funds between both accounts. This ensures that you never pay round-trip conversions whenever you can help it.
You face some obvious problems: we know that there are low cost, efficient instruments in the U.S. for long term investments, such as the Vanguard Index Funds. I don't know if such instruments exist in Europe. You'll have to do your research and study the funds carefully. For instance, if an efficient International Fund is not available in Europe, you might be better off paying the round trip cost and holding everything in the U.S.
Q: I have a large amount of U.S. dollars to invest. I currently live and work in the U.S., but as I do not have a green card I do not know how long I would stay in this country or even want to be here. However, there is a significant chance that I might settle here in the long term. What should I do with my investments?
A: If this answer was something that would be resolvable in a year or so I'd just tell you to wait and see. But seeing that you're sitting on a pile of cash that you definitely will want to invest for retirement, I suggest that you build two portfolios: one in your home country and one here in the U.S. Within each portfolio you would perform your asset allocation essentially, each porfolio mirrors the other: the only difference is that one is denominated in U.S. dollars, and the other denominated in Euros.
The reason for the mirror'd accounts is that of paying round-trip costs. Let say you bought European investments in a Vanguard European Index Fund. The problem is that when you need to withdraw, you'll be paying two round-trip conversions, from Euros to U.S. dollars and back again. That's inefficient when you already have a European account and can directly trade a European index. You could also perform balancing between accounts. For instance, hold all US Equity in the American fund, and all European equity in the European account. Hold US Bonds in the American fund, and European bonds in the European account. Split your Asia-Pacific and Emerging market funds between both accounts. This ensures that you never pay round-trip conversions whenever you can help it.
You face some obvious problems: we know that there are low cost, efficient instruments in the U.S. for long term investments, such as the Vanguard Index Funds. I don't know if such instruments exist in Europe. You'll have to do your research and study the funds carefully. For instance, if an efficient International Fund is not available in Europe, you might be better off paying the round trip cost and holding everything in the U.S.
Another AppleCare Success Story. NOT!
Despite Apple receiving the dead machine on the 11th, they've told me they will only ship my replacement on the 18th! Is this a company that wants my future custom? Doesn't seem like it to me right now. They're using up half my 30 day free AppleCare support with one DOA.
Book Review: The Four Pillars of Investing
Wlliam Bernstein is the author behind The Efficient Frontier, the website discussing asset allocation and the theory and tools behind it. Bernstein wrote two books on investing, his first being The Intelligent Asset Allocator, a technical discussion of Asset allocation. This is the book, he says, for liberal arts major. (I did get a Bachelor of Arts in Computer Science, so this book is for me!)
Being a big fan of asset allocation, Bernstein writes:
since you cannot successfully time the market or select individaul stocks, asset allocation should be the major focus of your investment strategy, because it is the only factor affecting your investment risk and return that you can control
This is generally good advice, and his chapters on indexing, market timing, bubbles, and history are really good, and very much worth reading. His actual sample portfolios, however, are excessively complicated. For instance, for a taxable account, he suggests a bond portfolio that looks like this:
For his tax-sheltered example, he goes for something even more complex for the equity portion:
Ultimately, there's a lot of value in keeping your portfolio simple and easy to follow. When you see something that seems really complicated and hard to manage, run away and go for something simpler. I doubt if Bernstein's hypothetical tax-sheltered account would do much worse with:
[Addendum: The reason Bernstein recommends holding the components of the Total International Index is that you get the foreign dividend tax credit, which reduces your overall costs. This is a big enough deal that it's worth considering. I still think there's value in simplicity, however.]
Being a big fan of asset allocation, Bernstein writes:
since you cannot successfully time the market or select individaul stocks, asset allocation should be the major focus of your investment strategy, because it is the only factor affecting your investment risk and return that you can control
This is generally good advice, and his chapters on indexing, market timing, bubbles, and history are really good, and very much worth reading. His actual sample portfolios, however, are excessively complicated. For instance, for a taxable account, he suggests a bond portfolio that looks like this:
- 25% Treasury Ladder
- 25% Vanguard Short-Team Corporate Bond
- 25% Vanguard Limited Term Tax-Exempt
- 25% Vanguard California Intermediate-Term Tax-Exempt
For his tax-sheltered example, he goes for something even more complex for the equity portion:
- 20% Vanguard 500 Index
- 25% Vanguard Value Index
- 5% Vanguard Small Cap Index
- 15% Vanguard Small Cap Value Index
- 10% Vanguard REIT Index
- 3% Vanguard Precious Metals
- 5% Vanguard European Stock Index
- 5% Vanguard Pacific Stock Index
- 5% Vanguard Emerging Stock Markets Index
- 7% Vanguard International Value
- Rebalancing between all these portfolio is a chore, and I doubt if most individual investors would enjoy having this many options
- Meeting the minimums alone would require a fairly substantial tax-sheltered portfolio
- Most 401(k) plans won't give you a good enough selection of Vanguard funds to enable you to cover such diversification.
- By having so many small accounts, you ignore the benefit of being able to qualify for Vanguard's Admiral shares, which have a significant reduction in expenses. Such reduction in expenses might cause your ultimate return to be higher than a complex portfolio, also partly because you are more likely to be able to rebalance such a portfolio on a regular basis.
Ultimately, there's a lot of value in keeping your portfolio simple and easy to follow. When you see something that seems really complicated and hard to manage, run away and go for something simpler. I doubt if Bernstein's hypothetical tax-sheltered account would do much worse with:
- 65% Vanguard Total Stock Market Index
- 10% Vanguard REIT Index
- 3% Vanguard Precious Metals
- 22% Vanguard Total International Index
[Addendum: The reason Bernstein recommends holding the components of the Total International Index is that you get the foreign dividend tax credit, which reduces your overall costs. This is a big enough deal that it's worth considering. I still think there's value in simplicity, however.]
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