Analysis: Long Leaf Partners

In Unconventional Success, David Swensen wrote a long tirade against what he saw as the corrupt mutual fund industry. However, in that book, he also pointed to an extremely well-managed actively managed mutual fund company, SouthEastern Asset Management's Longleaf Partners Fund. He pointed to several factors that contribute to their success:

• A clear strategy followed with discipline: Longleaf stayed out of the dot com "boom", even when many investors questioned this strategy and pulled their money out as a result. They therefore had outstanding performance in the bust, when everyone else was crashing.
• Tax-Managed Approach: The company does not churn stocks.
• Concentrated Portfolio: Their top-ten holdings constitute more than 50% of the entire portfolio. They have confidence in their bets, and they bet only on their best ideas.
• Low fees: They don't impose loads or 12b-1 charges, and over the last 15 years, their fees have gone down from 1.5% to 0.89%. Obviously, these fees are still higher than Vanguard's or DFA's, but this is for an actively managed fund, so their expenses are expected to be higher.
• Substantial Co-Investment: As of 2003, Longleaf trustees, employees, and family owned more than $400 million of Longleaf fund shares (4% of fund assets). Their code of ethics prohibit owning employee investments outside of the firm's mutual funds. This is not common industry practice and sets them apart.
• Willingness to close funds to new investors: a major problem with active investment is that having too large a portfolio increases the likelihood of under-performance. It's very difficult to figure out what to do with new money constantly, and if you have a great idea but can't deploy a substantial amount of your cash on it because you would otherwise move the stock, then you end up with half-implemented strategies.

In fact, at the beginning of last year when I first read the book, I looked at Longleaf's web-site, and indeed all three of their funds were closed to new investors. So I put them aside for future consideration if the funds were to open again. Last week, I saw a notice in the Wall Street Journal that they were now opening to new investments:

Mason Hawkins and Staley Cates were looking ahead -- and finding numerous stocks fitting their investment criteria. In November, Longleaf appealed to its existing shareholders to send money; in December, it opened Partners to investors in other Longleaf funds. Their cash covered new Partners stakes in UBS AG and Walgreen Co., and boosted an existing stake in Symantec Corp.

It wasn't enough. Partners opened to new accounts in January -- "temporarily," the managers emphasized.

(WSJ Feb 26, 2008)

Thus I examined whether Swensen's evaluation of them was true. First, they do seem to invest in stocks I wouldn't consider: Dell, Level 3, Symantec, and Walgreen. I'm not sure I like those stocks, but that's less important than the fact that they have a strategy. Their fees are definitely lower than other actively managed funds, and the co-investment policy is exciting. The fact that they are likely to close to new investors in short order (as soon as they get enough funds to execute on all their ideas) means that the idea of placing a minimum $10k with them to have a shot at adding to it is appealing.

I wanted to compare them to an indexing approach, however, so I visited Google Finance and plotted out their performance against the Vanguard 500 Index fund and the DFA Tax Managed Market Wide Value U.S. Porfolio (DTMMX). The result was that yes, Longleaf did outperform the S&P 500, but only matched the DFA fund (the DFA fund beat it by less than 1%, which could easily be eaten up by the financial adviser that you have to pay to get access to the DFA fund. The Longleaf International fund did worse --- while it beat the Vanguard International Fund by a good 13% over the last 7 years or so, the DFA equivalent, the DFA Tax Managed International Value Portfolio(DTMIX) trounces it by almost 20%.

It certainly shocked me at first that in international markets, which are notoriously inefficient, that the indexed approach produced by DFA beat a well-regarded active manager. Then I noticed that Longleaf did beat the benchmark Vanguard funds by substantial amounts, despite higher expenses. As such, while the results of my quick analysis confirmed my earlier decision to buy (and stick with) DFA's value funds, this limited window of opportunity (while they are open to new investors) might be a good time to take a look at Longleaf's interesting offerings (which are more interesting to those who do not have access to DFA's funds). If their past actions are any indication, these funds will not stay open for long.

Review: In Defense of Food

When Michael Pollan visited Google to give his talk, he explained the motivation behind this book: folks would come up to him and say, "I read half of The Omnivore's Dilemma and then stopped." When questioned as to why, the answer that came back was: "Every time I read a chapter, I found another thing I couldn't eat. I was afraid that when I was done I'd die of starvation."

In Defense of Food then, was Pollan's attempt to resolve this problem. Well, to begin with, the book is definitely much shorter and faster paced, to match American's lifestyle. Pollan himself sums it up in 7 words: "Eat food, not too much, mostly plants." There's a hidden subtext though, which is: "Spend more time and money on your food."

The book is divided into 3 parts. The first part is an explanation of what he calls nutritionism, the modern tendency to reduce food to its nutrients and try to construct a diet in that fashion. He argues that we know too little about food to try to do this, though he grudgingly admits that this form of research (reductionism) is truly the only hope we have in the future of truly understanding how our bodies work and interact with the food we eat. The second part of the book is a tirade about how the modern Western diet is really responsible for most of the chronic diseases we see today. The last part of the book is prescriptive, where he elaborates on the 7 words presented and explains how to achieve your goal of eating healthy.

Those who know me also know that I'm an unabashed foodie. I love eating, I love food, and I enjoy all of it. I exclude very little from my diet, and will visit multiple cafes to eat what I like. Yet I am skeptical of this book. First of all, to extract the food and diet from a culture without regards to its origins and the environment that culture it came from reeks to me of the same kind of reductionist mistakes that Pollan criticizes in his tirade against the food industry and nutrition science. For instance, he spends a page or two praising the small Parisian portions --- yet when I visited France, that was not where I found the best food --- the best food was to be found outside the big cities, where French farmers will feed you like a farmer, and if you're a hungry cyclist you will be more than satisfied. It seems to me that to extract food as the only source of chronic disease out of a lifestyle is also reductionist, and food can't be the only answer when the real problem is that Americans sit in their cars to go places, refuse to walk or bicycle, and think that the Wii is the solution to exercise. His approach to solving the problem also leaves those of us who aren't great cooks (I'm a reasonably good one, but I would never call myself great) stuck.

So read this book if you must, though I don't think it's nearly as good as The Omnivore's Dilemma. But in the grand scheme of things, I don't believe it provides any more of a solution than its predecessor.

Why reinvestments mess up your taxes

A couple of folks have asked me questions about my earlier post this week about dividends screwing up your taxes when you sell. Reinvesting your dividends accounts for 20 to 60 percent of the return on investments in the stock market, so one would think that you would want to turn it on, right?

It turns out that this is only true for tax-sheltered accounts such as a 401(k) or IRA. In taxable accounts, first of all, you are liable for taxes on the dividends --- so if you turn on dividend reinvestment, the taxes to pay those dividends have to come from somewhere. Even worse, however, is that dividends appear at quarterly or annual intervals not under your control! So when it comes time to sell the stock or fund, you'll end up digging through your records to see when all the reinvestments happen, how much you paid per share, and whether it's a long or short term capital gains tax. If you do this over a long enough period of time (such as 10 years), your brokerage might not have kept track of the reinvestments over that period, and now you're really stuck.

In fact, a friend of mine (a well known economist who occasionally writes for a national newspaper) once admitted that it was so complicated for him that rather than do the computation, he decided to just donate the stock to charity and wash his hands of the whole mess. If only we were all so wealthy that we could give away our capital gains like that!

Furthermore, what you really want to do with dividends is to stash them in some safe security, and use them to help re-balance your portfolio by buying more of the assets that are down. If you're in retirement, you probably want to spend your dividends first (or use some of them to pay taxes!), before selling any equity. So think twice before turning on reinvestment plans for your taxable accounts!

Review: Turbo Tax Premier Federal + State 2007

Before anyone else jumps in with the comment, let me say that I know that Turbo Tax Premier is not necessary if all you have is simple stock sales and so forth. So you can save a few bucks there by buying Turbo Tax Deluxe instead.

I do taxes for myself, my mom, and Lisa. This year, my mom ended up running a home business, and that was too much pain for me to deal with, so I outsourced that to my aunt and Turbo Tax Business.

At this point, I'm quite a bit of a Turbo Tax power user. I no longer use step by step interviews, but for each form, simply jump directly to the section of turbo tax, fill out the form, and get it done. Unlike previous years, this year's turbo tax actually has useful download features --- downloading the W2 has always been painful, but 1099-DIVs and 1099-INTs were always fraught with danger. This year, the 1099-DIVs and 1099-INTs downloaded without a hitch (I checked them manually). 1099-Bs, however are still broken --- too often, the long names get truncated, and you're stuck scratching your head wondering what the heck it is that supposedly got bought and sold.

This year, I decided to try the TaxResources Inc. professional review. I've always bought tax audit protection, mostly so I could sleep easy knowing that I had someone to back me up with regards with IRS dealings. Having had exceptionally good experience with TaxResources through that service, I decided to try their professional review. Note that this review only reviews the resulting 1040 et al, but since I had 2210 filing this year, I decided to have them take a look as well. Note that this review will not catch any of the following:

• Transcription errors (it does not solve the garbage-in, garbage-out problem)
  
• Errors of omission (if you leave out an entire 1099, for instance, they're not going to tell you you forgot it)
  
• State taxes. They only do federal taxes.
  

I submitted my tax forms for a review on Sunday night, and got the review back on Monday afternoon. The review is simply a PDF document, telling you what they've assessed as to your problems are. One thing they caught was that I had taken a short cut while inputting the cost basis for one of my mutual funds, and had forgotten to go back and correct it --- that saved me about $100 in both state and federal taxes, so from that point of view, the professional review paid for itself. (I probably would have caught it anyway eventually, but the reminder was good) In any case, I learned once again that reinvesting dividends is an extremely bad idea, and the increased complexity in accounting and hunting down every reinvestment outweighs any benefits you might gain from keeping your money invested all the time.

Beyond that, it gave me a list of things to watch out for (like a paid off house has property taxes, but no mortgage interest --- that's apparently a flag for auditors, since apparently Americans never pay off their homes). The review reminded me of several things, such as potentially trying to take advantage of the rollover IRA rule in 2010, and so forth. All stuff I knew, but useful if you don't spend as much time dealing with taxes as I do. For $40, it's certainly not going to break the bank, but then again, I got my copy of Turbo Tax through an Intuit employee, so you might feel different if you've already paid full price for your copy of Turbo Tax. What annoys me is that if you want another review after you've made your corrections, you have to pay $40 again. One would think that since the review looks like a generated form, they'd at least give you one revision's worth of checking.

The big bug I found this year so far in Turbo Tax is in the state portion for California, where 1099-B sales were incorrectly imported from the federal return. For some reason one of my 1099-Bs got duplicated, and I had to fix that by hand. This is unusually bad, but fortunately, I have plenty of time to run more updates before I file. This is actually one of the reasons to wait a bit before filing, especially if you owe. Fortunately, I caught this bug, but I wonder how many others are lurking.

All in all, I'm glad I'm not doing this by hand, but I'm disappointed by the bugs I've found so far this year. As for the professional review, I feel that it didn't add anything I didn't already know, but the fact that they caught something that saved me more than the $40 I paid does indicate that it's a useful service. Recommended, but watch out for the bugs, and update your copy or Turbo Tax frequently!

Retire Early on DFA Advisors

The excellent Retire Early Home Page has a great analysis of various DFA advisors, their minimums, and their effect on your portfolio outcome. There's also a link on that page to a paper by Duke University Professor Ed Tower on the issue of DFA versus Vanguard. I came across that paper last year by asking Prof. Tower for it, and it was the primary study that convinced me that DFA funds had certain advantages that Vanguard did not have. (I did not post the paper at that time because it was in draft stage, but now it has apparently been published)

When it came to implementation, however, it turned out to be hard to get access to relatively cheap DFA advisers, despite William Bernstein's statement that I could do it if I asked around. When I started doing my research last year, I talked to one of them, Epiphany Investment. The result was as awful as you might imagine --- they constantly tried to up sell me to their percentage-based business, tried to tell me that I didn't know what I was doing, and came across as being so sleazy that I wanted to go take a shower after talking to them. I almost gave up on getting cheap access to DFA funds after that.

Then someone at work told me that he too, was fed up with his existing DFA advisor, Evanson Asset Management, and had switched to Cardiff Park Advisors and was happy. I shot them an e-mail explaining my needs and by the end of the year in 2007 I had an account, and now own substantial DFA funds. (I am mainly using them for access assets that Vanguard does not provide) I'm not, however using any of Cardiff Park's advise (I'm cheap profits to them, I guess), since I am mostly using DFA just to get a value tilt to my portfolio. People often ask me about financial advisers, but I find it tedious and boring to interview people for that job (especially given the number of sleaze balls in the industry), and so far no one has offered to compensate me for that task. I still firmly believe that by the time you learn enough to interview a financial adviser, you won't need one.

In any case, my research into DFA funds has yielded something I am relatively pleased with, and I intend to continue putting assets into them.

Review: Inside Intuit

I know it's hard to believe, but before the era of widespread internet use (which I peg at around 1995 or so, though 1993 first saw widespread web pages at university), there was the era of the desktop software revolution. Prior to that, most software was custom written for big corporations to fulfill their needs, and standard software was priced beyond the reach of a mere consumer.

The desktop revolution was amazing. First, you could buy Turbo Pascal for $50, an IDE that ran circles around the professional compilers. Spreadsheets became the killer app that businesses would buy PCs for. And then there was Intuit.

I ignored Quicken from the moment of its inception until 1992, when I first bounced a check. That one experience taught me that I couldn't just trust myself to manage my money just based on my memory alone --- I needed help. Quicken is a funny piece of software. Even at the time this book was written, it only has 15 million users. In a country with a population of 300 million people that's 5% market penetration. Then you realize that the top 10% of the population controls about 50% of the country's assets, and you realize that Quicken probably has a fairly sizable share of those.

This book covers most of the history of Quicken, from its origins as an idea, to a partnership between Stanford Engineer Tom Proulx and Scott Cook to found th company. The partnership between businessman and engineer is typical --- it didn't take too long for the businessman to try to screw the engineer. But of course, Proulx quit and retired from Intuit, so the authors only tell Cook's side of the story. And what a story it is. Quicken is not a very engineering intensive product --- while getting the UI and the user model right was correctly identified by Cook as the challenge, I bet that Quicken could be effectively assigned as an undergraduate homework assignment today, and modern tools would render most of its functionality easy to implement.

Cook and company forged the customer-orientation into a competitive weapon, working hard to make sure even the most non-technical of users could use every feature of the product. As the company grew, though, you could see the lack of engineering process or vision showing through --- the company did not successfully build a portability layer for its software. (Not a surprise, given that Quicken was UI heavy and there's not much you can do there for portability if you want the app to look native) Even today, Quicken for the Mac and Quicken for Windows aren't compatible, and Intuit is about to throw out the Mac version of Quicken and rewrite it. It's quite clear that engineering at Intuit was never taken as seriously as the marketing or customer service.

Yet the company thrived, and did something few other software companies did --- which was to beat Microsoft at the shrink-wrap software game. First, it priced the product correctly, so Microsoft couldn't immediately enter the market at a much lower price point. Secondly, it acquired TurboTax, which with its annual schedule of required updates, never fit in with Microsoft's culture of massive projects and massive integrations. But most impressively, by listening very closely to their customers, QuickBooks (the extremely profitable small business accounting application) ran circles around Microsoft's Great Plains acquisition. This relentless approach served Intuit well until the dawn of the age of the internet.

The authors write a lot about how Intuit survived the age of the internet through innovation, but I don't see it. Certainly, downloaded updates have made Intuit's job easier by allowing frequent patches to the software. But true migration of the tools of financial planning that Intuit's products manage requires serious engineering, and startups like Mint.com or even Financial Engines. Intuit's lack of emphasis on engineering and computer science has hurt them here, and will continue to hurt them. Already, users have a hard time staying on the Quicken upgrade treadmill, for instance, and the lack of trust between banks and Intuit will not enable them to get at the data they really need to be able to provide their customers with real help.

Ultimately, the authors fall under Scott Cook's spell, and refrain from criticizing the company, even on such moves as their successful effort to lobby against the IRS for its proposed program to send out pre-filled 1040EZs to eligible taxpayers. For me, anyway, that was the moment Intuit lost my trust, but Taylor and Schroeder were so enamored of the company by that point they could not bring themselves to criticize the company whose leaders they had fallen in love with.

All in all, I don't think the time I spent reading this book was wasted, but it is important to read this book with a critical eye. Otherwise, you'll be hoodwinked into thinking that Intuit is some kind of technology company. It's not, and from the moment of its conception, it never was.

Cycle Touring and the Spriit of Adventure

Over and over again, whenever I tour by bicycle, I run into people who tell me, "You're supposed to have a SAG wagon follow you so you don't have to carry your own luggage." In fact, there was a time in Colorado when touring by ourselves when we ran into cyclists who couldn't get their heads around the fact that we weren't touring with a car! This is my attempt to explain what we do and why.

Fully loaded touring	Credit card tour

The two have very little to do with each other, even if you call it all "loaded touring." One is not harder than the other (in fact, the credit card tours are frequently much tougher, because having a reduced load lets you do unpaved roads, hiking trails and carry your bike over electrified fences because you can:

I think the biggest difference isn't with how you carry your luggage, but with the spirit that accompanies the trip. When Lisa & I announced that we were going to do a tour of the South Africa, my friends responded with: "Cool! Wish I could go with you." Her friends responded with: "You're going to be eaten by lions and tigers!" The difference between the two attitudes is key --- folks who express the latter sentiment will be extremely unhappy on one of our trips, and folks who express the former sentiment will be frustrated at being given a schedule and told what to do, because we remember that from being in school and didn't enjoy it. We weren't carrying camping gear on that trip, and stayed mostly on paved roads. At one point, however, to avoid a known nasty section of road, we rode into the middle of town to hire and hitch a ride on a so-called "black taxi." When we were dropped off at the destination, it was 5pm on a Sunday and we rode a block towards the tourist information center before we got a flat. While I fixed the flat, an old gentlement wearing a "Viagra Test Subject" T-shirt came up to us and asked us where we were going. We were wary at first, but he proved to be friendly and helpful, showing us a local B&B since the local tourist information was closed. It was a wonderful experience and Lisa enjoyed every moment of it, including the wonderment of our hosts when we told them we had arrived via a "black taxi", which they wouldn't have dared to take.

That trip clinched Lisa's attitude towards cycle touring --- we would ride into a farm where we were staying, and dogs, the hostess, her sons would dash out to greet us, having never seen a tandem before. We would stop at a gas station to buy ice cream, and the local kids would run up to the back of our bike, count the gears, and run away, screaming: "9! 9!" They had never seen a 9-speed before. At no point were we in danger of being eaten by lions and tigers, and at every point our choices were entirely ours to make --- to stay at this lovely place a second day, or to push forward to the next delight. Sure, there were a few hard days, but no worse than what we found on any other tours.

A few years later, we did our first fully-SAGed tour, the Bicycle Tour of Colorado. It's a very well-organized tour and the route was enjoyable, going over Trail Ridge road and visiting several high passes. The support was great --- in Colorado, there are lots of places where you have 50 miles or so between water, and we brought along our four-person luxury tent for the two of us. But a couple of incidences highlighted that the SAG was not without cost. First, there was a day when I woke up with a stiff neck from sleeping wrong the night before. On a self-supported tour, we would have either elected to wait out the stiff neck, or do only a short ride that day. Being a fully scheduled tour, the BTC had scheduled that day for 100 miles of riding. So I ended up riding 100 miles without the ability to really turn my head. (The alternative was to ride the SAG, which wouldn't have been as pretty) Then, there was a day when we climbed trail ridge road without proper acclimation, because with 2000 people on the tour or so, there were only certain days available for riding the road. By ourselves, we would have been able to ride the road whenever we wanted to.

At the end of the BTC, it was with relief, not with a sense of burden, when we put panniers on our bike and headed off for another week of touring around Colorado. Lisa was much happier with this trip, because now we were setting our own schedule, choosing where to stay, and while our tent was comfy, staying at hotels didn't cost any more than the BTC was costing us, but gave us plenty of choices as to where to go.

One more example: in 2005, Mike and I rode over Col D'Izoard into a tiny village called Le Rauffes. There, we found the most delightful country Gite you could imagine. At 5:30pm, I asked the owner, Thierry, when dinner was served. He said: "I closed the restaurant 6 months ago. You'd have to go down to Embrun to eat." Embrun was down the mountain, 1000' down, and the prospect of climbing after dinner didn't appeal to me, so I asked him if there were other places to eat. Thierry looked at me, and said, "Oh, you arrive by bicycles. I make something for you." And he proceeded to make us the best meal of the trip (and I have high standards for food). If we had showed up as part of a supported/SAG'd group, he'd have told us to go down the mountain. There are lots of other examples like this throughout my trip reports, and in Gary Erickson's book.

Yes, there is a cost: you must carry your own stuff (but it doesn't have to be very much stuff --- less is more, and Gary Erickson's book tells you how). You can't be cocooned and speak only English --- but the point of traveling is to meet new people and be part of the local culture. You might have to backtrack a town on occasion to find a place to sleep. But the rewards are amazing --- folks like Jobst Brandt (who's over 70) have done it for over 40 years and go back over and over --- and believe me, having stayed at the hotels he's stayed at, and eaten at some of the restaurants he's recommended --- it's not "roughing it" in any way, shape or form, despite the extremely low cost, compared to the fully supported tours. Galen Rowell wrote a column in Outdoor Photographer called The Hello Factor. In which, he explained how you knew you were on an adventure: if people you ran into who were doing the same thing said "hello," you were having an adventure. In that respect, every self-supported cycle tour is an adventure.

Review: Creative DECT Skype Phone

In anticipation of our move to Munich, we are switching over to Skype as our land-line provider. Buying Skype service for a year (including Skype Pro and SkypeIn) costs about $60. Yes, I know that Skype is fairly evil as far as taking over your machine while it is running (one way Skype reduces costs is to turn each of its clients' hosts into a router), but the prevalence of hardware support is quite important.

My cousin, Tom, told me that Fry's on-line had the Creative Cordless phone for a paltry $17.99 + tax and shipping. This made it a screaming deal, so I bought it despite already having purchased a Philips USB Skype handset, which will get relegated to travel service.

The Creative phone comes with a single piece of paper for a manual, a disk, a USB dongle that serves as the base station for the phone, a handset, a charger, and 2 NiMH 750mAH AAA batteries. Since we already had 2 NiMH batteries fully charged at home, I just popped those in and avoided the 14 hour wait and put the batteries into our fast charger. This use of standard components is a plus, since it means that if you lose the charger or the batteries wear out, you can just get more NiMH batteries and pop them in.

The software installed just fine on both my Mac Mini and my EEE PC, both of which were running Windows XP Professional. Plugging in the dongle and getting it to recognize it was easy in both cases, and the sound quality to my ear was quite good.

The user interface on the handset leaves much to be desired, however --- I actually had to read the manual to learn how to dial out: you have to push the call button, dial 00 + country code + phone #. (US phone numbers meant: 001 + area code + phone #) Fortunately, this is mitigated by the fact that you can use the Skype contacts list on your PC. Incoming calls ring the phone just fine (you have a choice of four different ring tones), and there's a button on the dongle that you can push so you can find the handset if you were to misplace it. The handset also allows you to set up a conference call (with 3 way calling, etc), but good luck remembering how to use it --- you are probably better off doing sophisticated duties like that from your computer.

For the price ($25 shipped in California), this is a great deal and comes highly recommended. Lisa's been using this every day, and she's satisfied with both the sound quality and the service. We will cut off our land-line at our next bill. As everyone knows, you can't rely on Skype or other internet phones in an emergency, and in the case of an earthquake, cell towers might also be down, so only do this if you're willing to bear the risks involved.

Review: Fatal Revenant

Warning: Spoilers Below

The Runes of the Earth ended with Thomas Covenant and Linden Avery's adapted son, Jeremiah coming back from the dead and in corporeal form. Fatal Revenant can be divided into two parts, first, Avery's translation back in time to the time of Berek Halfhand with Covenant and Jeremiah, and secondly, her quest to reach Andelain, to achieve her purpose.

The first half of the book is interesting, filled with continuity adjustments that Donaldson puts in. A lot of the history of the Land is covered in first hand which has always been put away in mist, including the introduction to the words of power that were used frequently in the first and second chronicles. (Though one of the words is also used as the name of a place, which I think is unfortunate --- that would be sort of like naming your sailboat Mayday and then trying to hail it)

Donaldson does not fall into the George Lucas trap of trying to explain everything, thereby removing the mystery behind the power and magic of the land, but in many ways, by giving Linden Avery power and magic, he eliminates a lot of the mood of despair that pervades prior novels and replaces it with a sense of frustration with the protagonist. In the second half of the book that frustration is at least dissipated as he provides challenges for Avery's newfound power, and also reintroduces some former races to the land.

Donaldson's writing style is still unfortunately repetitive, and if I never see the words puissance and theurgy on the printed page again it would be fine with me. The ending is a genuine surprise and I did enjoy it, but that is not (yet) enough to redeem the book in my eyes. Since there are two more books to come, I will reserve judgment until they are all over. One would think that after having to wait years for George R. R. Martin's series to end would teach me a lesson about starting series that are not over...

Review: SKS Race Blades

I've always used full fenders, because my bike had plenty of tire clearance. But the Ti bike, because of a geometry that was designed to maximize handling feel rather than fender clearance or toe clip overlap, could not take a full fender without interference with the downtube, so I ordered a set of Race Blades XLs from BikeTiresDirect, which ironically doesn't actually sell tires I like.

Since my rear could handle a full fender, I only tried the front. The mounting scheme is very easy, with rubber grommets that wrap around your fork. The fenders stays are designed to be bent, and the instructions say to bend them gently, but it turns out that you can't bend them gently and expect them to stay --- you have to bend them pretty hard! When I was finished, I had just a little bit of clearance for my down tube mounted pump, and quite a bit of a gap between the fender and the fork. This made me quite skeptical of how effective they would be, since I use a rain cape, and spray thrown up from the wheels would be like spraying water from under a tent.

These work surprisingly well, however --- I commuted in the rain all this week, and while my feet got wet (easily solved by a mud flap), my knees stayed dry, indicating that the gap is not an issue at all. I did notice quite a bit of dirt and other gunk sprayed onto the crown and fork below headset, so one of the big benefits of a fender (protecting the bearings from the elements) isn't a feature, but on the other hand, that's why I run Chris King stuff (and to be honest, in all my years of touring, I've never had a headset failure --- they're one of those perpetually working items on the bike, like caliper brakes).

Since I usually tour without fenders anyway (fenders are no good if you do even a little bit of off-roading, and I've had a number of fender failures over the years just from commuting), these are a good compromise, and the easy-on/easy-off nature makes them quite practical as my primary ride. Recommended with the above caveats.

My first carbon failure

I've heard of a lot of carbon fork failures, mostly because the people to whom it happens end up in a hospital, so when my Fuji approached its third year, I ended up with a custom Ti frame and a custom Ti fork.

However, unknown to me, I had already broken a carbon component, which was the seat post that came with the Fuji. Note that as Pardo mentions in his entry, this seat post lived as pampered a life as I could make it, no loaded touring, no rough man-handling, and throughout its life I was a svelte 145 pounds. I'm replacing it with a Thomson aluminum post, which I love and would want to rave about one of these days.

In any case, people occasionally ask why I wanted to go Ti, and for me anyway, all it takes is one bad carbon failure in the fork or frame and I might never be able to ride again. I don't treat my bikes kindly, and I don't see myself being any nicer to my bikes in the near future.

Review: Declare

I reported that I was disappointed with Tim Power's latest book, Three Days to Never, but when Charlie Stross recommended Declare at the back of The Atrocity Archives, I had to place a hold at the library.

Once again, Tim Powers chooses to base a novel on a historical figure, this time super-spy and Russian mole, Kim Philby. The approach, however, is more indirect than most of his other novels, perhaps in deference to traditional approaches towards Spy Fiction, such as John le Carre's. We start off with a description of Andrew Hale, a former British intelligence agent who had been groomed since the age of 7 to participate in project Declare.

Before we even meet Kim Philby (though there are plenty of references to Kipling's Kim, which apparently Philby was named after, we get an exploration of Hale's motivations, his past, his experience during World War II infiltrating the Russian spy network in Paris, and the great love of his life, a spy named Elena who swore allegiance to communism. We then get introduced to the conflicts between Philby and Hale, as well as the grand story behind the novel: the supernatural and occult reasons behind Russia's success. Rest assured there is plenty here to satisfy the fantasist, yet when reading up on Philby after finishing the novel, I found that the historical details were exceedingly accurate --- clearly, Tim Powers did his homework here.

The plot is well put together, and Powers succeeds to a large extent in impersonating le Carre. Even the most supernatural action sequences that could have been dressed up were written in a quiet, under-stated fashion. I did find the ending a little predictable, but perhaps the protagonist does deserve a little happiness after his years of service.

This novel is dense, and took me many more days to read than the usual stories. It is recommended for an intriguing view of World War II and its aftermath, an intelligent speculation, excellent characters and characterization, great writing, and for me at least, an excellent re-entry into the genre of spy fiction. Yet you need not be familiar with Kim Philby's life to be able to read it. It is not a page turner in the traditional means, but some novels deserve to be savored, with each chapter contemplated and with the reader putting together pieces of the puzzle as it is revealed to him, and this is one novel deserving of such treatment. I would not be surprised if at the end of this year, I would nominate this the best fiction I've read this year.

First impressions: Strong Frame

Today was the first long ride on the custom bike, so I can write an extensive first impressions review.

During the week, I had the bike configured as a commuter. I had my light wheels on the back, but my Brooks saddle, generator wheel, and lights mounted. In that configuration the bike handles very nicely, though it isn't fast by any means, especially with a load in the saddlebag. One problem I found was that I couldn't mount a full fender in front, because it would interfere with the cable runs on the down-tube. That's unfortunate, but I ordered a set of SKS Race Blades and hopefully those will work out.

This morning, I mounted my Thomson seat post, my Flite saddle, and my lightweight front wheel, and got a slightly lighter bike, but not by a whole lot. The front fork is scheduled to be replaced this week with the Ti fork, so the bike will get lighter but not a whole lot lighter --- the Ti bike is definitely a heavier than the Fuji, and my guess is it will end up being about 19 pounds in light bike configuration and 22 pounds in touring configuration, which is still miles lighter than my Heron Touring bike.

The handling remains the same on the flats and even on climbs. At low speeds, the low trail bike wobbles a bit more than the Fuji did, but I attribute that to the fit not being exactly dialed in yet. I expect that to go away once I get out a tape measure and actually try to replicate my touring position. I was, however, completely unprepared for the bike's handling on descents: this bike descends as though it was on rails, much more stably than the Heron or the Fuji. This behavior surprised me until I reflected on the bike's geometry. I had specified longer chainstays than the Fuji (43cm), which increased the stability, and a lower bottom bracket, which lowered the center of gravity. The two combined together gave me increased confidence on descents, to the point where my cornering speed is determined solely by my willingness to go fast with respect to prevailing traffic. The combination does affect climbing, however --- the bike does not appear to respond as quickly to standing hard on the pedals as the Fuji does, though it isn't anywhere as sluggish (or slow) as the Heron is.

The next thing to do, obviously, is to put a saddlebag and load it up and then descend a major hill to watch for obvious problems such as a high speed shimmy. My thinking is that a high speed shimmy is unlikely with this bike given how stable it is, but one never knows. For now, however, this ride is incredible!

Lumotec Light Problems and Diagnosis

I've been using the Lumotec N and Lumotec Schmidt Switch headlights for the last 3 years, but have had really poor reliability with them (so did my brother). In the cases of most of the failure, it seemed as though all that was needed to destroy the lights was a sharp knock. Late last year, my 18-month new Lumotec N failed again. But a sharp jiggle to the wire brought it back, so I thought nothing of it. But when I moved the light over to the new bike, the light once again failed.

So this morning, I rode over to Pardo's house and we took the light apart and tried to fix it. The first observation Pardo made was that there was no strain relief at all on any of the wires. This made the prime suspect a broken wire. We fiddled about, but the light appeared to work once the casing was off. So we decided to call it a day and reinstalled the light. I then took the bulb out to clean it before riding off and it immediately failed. On examination, the bulb is held against a negative contact spring by the holder, and the positive contact is a spring. The positive contact is fine, but the negative contact had become corroded. A cleaning, however, did not solve the problem, so I suggested using tweezers to pull the contact out towards the bulb. That solved the problem, and the light is now reliable.

My conclusion is that the Lumotecs are not very well-engineered. According to Pardo, adding strain relief (which is routinely done, for instance, for objects such as cell phone chargers) adds a few cents at most. The contact spring should be stronger so that a year of jiggling and rain riding does not destroy it or cause intermittent failure. But my guess is the majority of these lights outlast the year warranty, so the manufacturers have no incentive to fix these problems.

Review: Halting State

I seem to have become a bit of a Charlie Stross junkie lately, but I think I've finally caught up to his latest output.

Halting State takes an interesting look at the MMORPG and the upcoming link to reality TV shows. What if a massively multi-player role-playing game intruded into your reality? Better yet, what if the usual alphabet soup of government agencies decided to use a massively multi-player role playing game as a recruiting tool for its purposes? What are its implications, and what might one look like?

The plot revolves around two main characters, Jack and Elaine. Jack is a game programmer who was recently laid off, and Elaine is a forensic account with an insurance firm. When a group of Orcs decide to perform a cyberheist involving the central bank of a company hosting such a gaming service, Elaine is asked to lead the investigation, and she asks for a programmer/consultant to guide her through the audit. Both Jack and Elaine are avid consumers of role playing games, historic re-enactment societies and the such, and their combination of skills enable them to dig into the investigation in a way that quickly becomes a matter of life and death for them.

The plot is entertaining, and very plausible. I enjoyed the description of the graphical role playing games and it is quite clear that Stross did his homework. References to griefing and non-PvP zones are made throughout without explanation, and the reader is never talked-down to. The characters themselves, however, are not that interesting, and perhaps behave a little bit too much like wooden stick figures made to fit the plot. Nevertheless, it works.

Perhaps the weakest part of the novel is that it is written entirely in the second person. The use of the second person is something entirely germane to the role playing game genre, of course, starting from the Choose Your Own Adventure books. But in this particular context, it feels wooden and contrived. Perhaps because as a PC, you would never so stupid as to fall into the kind of traps or emotional pitfalls that the characters would. As an artifice, this usage cheapens what is otherwise a very entertaining book.

The book starts off slowly, and it jars a bit as it switches viewpoints between the primary and secondary characters. After the first third, however, it steps into high gear and becomes an obsessive page turner, making this an ideal airplane novel, though it comes nowhere close to matching Stross' best work. Nevertheless, not a waste of time at all, especially if you're a gamer.

The Ti bike is ready

It was a massive ordeal, but I finally have a bike I can ride without worrying about broken this and that. I actually received the frame 2 Fridays ago, but an early build showed that the brake bridge was at 52mm, rather than 57mm, so I sent the frame back to Carl Strong. He graciously agreed to redo the entire thing and shipped it back to me next day air, so I got it back again on Friday. All day yesterday, Pardo, Mike Samuel and I moved the parts over from the Fuji. The Ti fork is still in transit, but Mike fortunately had an IRD steel fork that he could lend me. The IRD by the way has lawyer's lips and is only really about 52mm reach as well, so if you're looking for a fork that will clear 32mm tires this is not it.

Notes from the build: first of all, the spoke holder doesn't quite work. The holes aren't big enough for me to thread spokes through properly, and looking at it now, I don't see how it can be convenient to use on the road. It only holds two spokes anyway, while I normally need four on tour. My guess is, I'll go back to electrical tape and carry it the way I normally do: taped to the seat tube. 57mm reach is a bit too much for the brakes. Pardo had to file down the brake slots to get the brake shoots to hit the brake track squarely. Not a major problem, but my guess is 55mm is really the limit of the tolerance, if you don't want to have to do what we did.

I haven't taken it for a long ride yet, but as far as short first impression rides go --- it rides like my beloved Bridgestone RB-1 or my Fuji, which is what I wanted all along, so that part of the bike is straight on! It's been a long wait, and our work is not quite done. I'll need the new fork, which I hope wasn't built to 52mm, and also a new seat post so I can transfer the Fuji's seat over for weekend riding. I've ordered a new handlebar so I can put on my favored carbon brake levers and bar-end shifters for touring. And of course, lights and fenders need to be tested (and mounting systems deviced as necessary). I need to consider a triple. But as of right now, the Fuji is sitting in my brother's garage, and that Heron already has a buyer. I will soon be down to one "do-everything" bike, a condition that I haven't been in since 1992. And just in time for the Munich move!

Review: The Runes of the Earth

I first read The Chronicles of Thomas Covenant way back in high school, right after The Lord of the Rings. The two trilogies are of course very different. First of all, I think Stephen R. Donaldson burnt out his thesaurus a long time ago. He is verbose, prone to using words and colors that you can guess at but would really need a dictionary handy to look up, and overly dramatic.

But this first set of books caught my attention because of its characters. The lead character is as anti-hero as they come (he rapes a girl in an early section of Lord Foul's Bane, which alienates many women readers I know --- and since women read more than men, that's not something that you really want to do if you want to achieve bestseller status). Abusive and rough, Thomas Covenant runs rough-shot over a vibrant fantasy world in such a way that you can't quite believe that he is supposed to be the savior. Yet the internal narrative of Covenant is such that at least, for a teenager going through the tumult of alienation, loneliness and despair, was very appealing. In fact, at the end of the first trilogy, his redemption and healing was very moving, and something I took quite to heart.

The second chronicles weren't as compelling for me, introducing a character, Linden Avery, who was abused in her own way as a child, but ultimately was too passive for me to want to pay a lot of attention to her. In fact, I was very surprised that I remembered almost none of the plot summarized in the leading section of The Runes of the Earth.

Has 20 years improved Donaldson's writing style? In many ways, it has. First of all, he seems much less dependent on a thesaurus this time, and his style seems much more stripped down, less extravagant and flowery, but more conducive to story telling. His character, Linden Avery, is still not as interesting a character to me as Thomas Covenant, but this time I'm much more interested in her (perhaps that reflects the changes in me, rather than the changes in Donaldson's approach). She's now the director of a hospital specializing in mentally injured patients, and has adopted a son who is autistic. One of her patients is Joan Covenant, Thomas Covenant's wife, who was difficult to manage, but when Covenant's son shows up to claim her and is denied, things start moving quickly, and quite soon, Avery is translated back to the Land, along with her son Jeremiah and Joan, and Avery starts a quest to rescue her son and redeem the land in the process.

Avery as a character is insecure, but much less in denial of her reality. As a result, she's much more willing to wield the power of the ring (there's much less of the impotence theme her in this book), and willing to take on more risks. She encounters many of the previous cultures in prior novels such as the Haruchai, the Ranhyn, and Ur-viles. Continuity and previously known facts are conveniently side-stepped through the common science fiction device known as time travel. If you suspend your disbelief, all this works, but perhaps one thing that escapes me at this point is why? I guess I should suspend judgment until I've read the remaining pieces of the series, but for now, if the first chronicles is about redemption and the second chronicles is about healing, perhaps the third chronicles is about taking risks. I will keep reading to figure it out, but cannot provide a recommendation until the story is complete.

Review: The Atrocity Archives

The Atrocity Archives was Charles Stross' first novel, and the book that Jennifer Morgue follows.

When I read that it was Stross' first published novel, I set my expectations a little lower, but I shouldn't have. The novel blows me away. Rather than being a James Bond pastiche, this novel deals with the Bob Howard character in his native capacity as a technomancer, to use a hybrid term. As a bored system administrator in the Laundry, he asks for an attempt into Active status so he can do field work. The worst happens when he is finally given a chance --- it turns out that he has a knack for keeping cool when all hell literally breaks loose, and he is good at his job.

So when he is given another easy follow-up assignment and the damsel in distress is kidnapped, he follows his instinct and gets into deep trouble. The Laundry then tries to use his new-found love interest, Mo as a bait, and discover that things are not as simple as even the Laundry thinks it is.

I am blown away at how much better this novel is, even compared to Jennifer Morgue. Bob Howard isn't kept entirely in the dark the whole time and is in control, so you are not left wondering why he's a protagonist at all. The inter-departmental rivalry is fun, and as always, all the references to geek culture.

The Golden Gryphon press edition of this novel includes a second Bob Howard short story, The Concrete Jungle about an internal affairs investigation (also incredibly well written and interestingly put together), and an after word by Stross, an analysis of Spy fiction and Horror from his perspective (I think that his perspective is warped, but since I love his fiction, I'm glad it is warped in this particular way).

Some people do world building by drawing maps, putting together new cultures and languages, and then showing them to you. Stross does it one step better: he synthesizes a world out of everything we already know, putting together a gestalt from shared culture, and then providing a narrative thread that not only shows it to you but also grants a rollicking good time.

If I were to bring The Atrocity Archives onto a 12 hour flight, it would have been no problem. Sure, I'd read through it once in 3 hours, but then I'd probably spend the next 9 hours poring through it, looking for references I missed and stringing it all together one more time. Needless to say, this novel is highly recommended.

Moving to Munich

It's official: I'm moving to Munich for six months to a year on a work assignment. I don't talk about work on this blog, so I won't say what it's about, but I'm excited. First of all, I've wanted to live in Europe for a while. The combination of bike-friendly cities, bike-friendly drivers, amazing roads for cycling, and beautiful scenery combine to make Europe Bikelandia. Even though I've lived car-free in the Bay Area, it is much easier to live car-free in Europe.

Why Munich? Well, Lisa loves Munich. I've only been there once, back in 2003, but I didn't spend much time in the city itself (just a day or two). But the easy access to the alps, the trains, and the beauty of the surroundings speak for themselves. Plus, one of my friends Stefan works in Zurich and visits Munich often, so we can ride together.

Of course, I'm not immune to trepidation. I've lived in the Bay Area for so long --- more than half my life --- I know where everything is, I can ride the roads without a map --- there are places I haven't explored still, and I am by no means out of love with this place. I love the good ethnic food, the diversity, and I enjoy the amazing weather. Leaving all this behind will be tough, even if it's temporary. The offer of an adventure like this, however, especially with the resources of Google behind me, is just too much to refuse. So here I come! And yes, I will document this adventure sporadically on this blog.

Review: Three Days to Never

I'm beginning to see patterns in Tim Power's books. Take a few historical characters that are well known, involve them in some secret occult organizations or happenings, stir rapidly, and serve. What I consider his best novel, The Stress of Her Regard involved the romantic poets (Byron, Shelley), gargoyles, vampires, and other such beings, locked into a struggle.

Three Days to Never involves Albert Einstein, Charlie Chaplin, time travel, and the wiping out of entire lifetimes. Rather than narrate directly about these illustrious men, who have enough biographies that even a casual reader might detect falsehoods, Powers works at a second remove, narrating the story of Frank and Daphne Marrity, a father-daughter pair who stumble over the truth when Frank's mother dies --- first, that they are descendants of Albert Einstein, and second, that Einstein left a more terrible secret than the famous equation, E = mc^2. He left a time travel machine that would allow a user to potentially wipe out entire lifetimes, erasing beings as if they had never been.

Two factions, the Israeli Mossad, and a secretive occult organization that's bent on retrieving the time machine for their nefarious purposes. Complicating matters is a wild card, a version of Frank Marrity from the future, who wants his old life back.

Does all this sound confusing? It is. While the central narrative is easy enough to follow along, untangling these threads and motivations made the book unusually slow going for me. Further, I've read enough about Einstein's character to find the depiction of Einstein less than believable, which made the story less than real to me.

The novel rolls along fast enough, and while the ending is reasonable, left me less than satisfied. Too complex to be an airplane novel, but not quite there as a literary fantasy, I cannot recommend this except to Tim Powers fans. The payoff might not quite be equal to the reward.