Thought versus emotion

Here is an experiment in the telepatch. I am attempting to write liner notes for my almost-complete album (tentatively titled "Thought versus emotion"). I can't think of anything I'm interested in writing that others would care to read. So, I just started writing, with the result below. Reactions?

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In Al Gore's book "The Assault on Reason" he starts by asking, "Why do reason, logic and truth seem to play a sharply diminished role in the way America now makes important decisions?" In our historic 2008 election, Barack Obama said, ".. children can't achieve unless we raise their expectations and turn off the television sets and eradicate the slander that says a black youth with a book is acting white." The truth is, a white youth with a book also stands accused, or at least they did when I was in school. I was called "four-eyes" because I had glasses, and "professor" because I was smart. How many people have you heard say, "I was never any good at math" to the smallest demand on their numeracy, and everyone smiles and laughs! My personal favorite is having someone hand me the check at a restaurant, saying, "You were a math major" .. as if math were years of study of how to figure 20%. (It's not.) I am saying we don't think, and our society says it's okay to not think, by now encourages us not to think. What we do is feel.

Feeling is cool, feeling is gangsta, feeling is great. Movies make you feel, music makes you feel, advertisements, and definitely politicians make you feel. Liberal politicos simply "raise awareness" of issues, as if being aware of soul-killing tragedy #837 is as good as doing something about it. Conservatives like Rush Limbaugh or the mercifully banished Sarah Palin do the same (though they don't call it that), inciting their followers to rants and bigotry through feeling. I am claiming, then, that reason is good and under attack, while feeling is used for ill but widely admired.

However, it's easy to tell the opposite. How many good ideas died quietly because something should be studied more carefully? Many talk of "death by committee", but there is also "analysis paralysis" at the individual level. (I know something about that.) Feeling bursts through barriers. It focuses our attention, makes us respond "without
thinking" as they say. Feeling is a call to action. You don't think alive, you feel alive.

So where does music lie in this spectrum? The media and common wisdom describe it easily as feeling. Great artists are always quoted in emotional terms, and often judged that way as well. However, anyone who has actually studied music or performed it should recognize the power of thought. Technique is often gained through rigorous repetition, but also through painstaking, compulsive analysis of physicality. Even deeper, the reason that music evokes feeling is often a combination of intuitive understanding of what universally makes people respond, and a knowledge or mastery of the underlying vocabulary of a particular musical discipline. Jazz sounds like jazz, punk sounds like punk, because the performers have picked up the right accent for that music.

And what of the ultimate challenge, to create your own vocabulary, or at least your own dialect, of a musical language, one that makes logical sense and inspires great feeling? Well, wouldn't that be something.

The bright side of the credit crisis?

When I bought my house five years ago, for various reasons, I got an adjustable rate mortgage. I am easily a prime borrower, and was able to make a substantial down payment, so I didn't get one of the crazy negative-amortization-ninja-ARMs you heard so much about last summer, but it's an ARM nonetheless. Last year I started thinking about refinancing into a fixed rate mortgage. I'd eye interest rates from time to time, but never pulled the trigger.

As a result, I was happy to see a piece of mail from my lender the other day. I gleefully tore it open to find that my mortgage payment has gone down $130/month. My mortgage is tied to the 1-year t-bill, which due to the credit crisis is at historically low levels. When my mortgage reset, the interest rate actually went down, lowering my payment.

Next year at this time I may not be so happy about my situation. I'm still looking to refinance, but 30-year rates aren't great right now, at least compared to where they were last summer, so I'm holding off. The are many scenarios where long-term rates will rise significantly higher, so my position remains somewhat precarious.

That said, for now I'm happy to report that the credit crunch isn't all doom and gloom.

Improv Everywhere and the power of collaboration

I've recently been working a proposal for an innovation program at work. Today, I met with one of my peers to discuss it and he suggested adding an element of competition to the program as a means to drive quality and interest.

I recoiled at the suggestion. My reaction was something like "Competition is such a cheap way to drive people, the value created through collaboration is much more interesting." I was thinking of the work of Improv Everywhere, a group I first heard about on This American Life. Their original No Pants stunt is now an annual event in New York City.

When I got home, I set about reviewing the work they've posted on their site, and I ran across a couple of "missions" that made me so happy I wanted to cry. First, "Rob!" in which they turn a significant part of a baseball stadium into willing collaborators. And second, "Best Game Ever," in which the participants in little league baseball game are gifted with what may well recall as one of the best days of their lives.

More collaboration, less competition. Truly a goal worth striving for.

Tomatoes and canning

M and I recently read "Animal, Vegetable, Miracle" by Barbara Kingsolver for a book club, and we were inspired to try the canned tomato sauce recipe therein.

We started out by canning a ha'bushel of tomatoes into 7 quarts of Kingsolver tomato sauce. "Canning" for historical reasons means putting something into glass jars in a sterile way, and boiling them so that you don't die of botulism. Kingsolver emphasizes that it's important to preserve the acidity of the recipe, so you're not supposed to mess with it. This turned out to be about 7 hours all told given our equipment, i.e. 1 hour per quart of sauce, i.e. a pain in the ass.

However, the farmer's market tempted us into more tomatoes, so we canned another bushel of tomatoes into 17 quarts of ..well, canned tomatoes, using a Fannie Farmer recipe which was basically tomatoes and salt.

More temptation pulled us into another ha'bushel, but this time we decided to make S's uncle's sauce. Since we didn't know if it is canning-safe, we've been eating some and freezing some. It is awesome. We've made two 4-quart recipes. A lot of water boils off, and it turns into 3 quarts or so. It's so good!

All told, we've probably cooked more than 100 pounds of tomatoes in the past 4-6 weeks. (A ha'bushel is ~25 pounds.) If you're not, you should really be buying farmer's market tomatoes, you lazy Seattle alcoholics. (j/k?)

Embarassed of my Minnesota heritage

JR and I proudly wear the badge of our former Minnesota citizenship out here in Seattle. Or rather we did, until Michele Bachmann started spouting off.

It's pretty tough to convince our West Coast friends that Minnesota isn't a bunch of poorly-educated, ill-informed hicks when Michele keeps spouting her verbal diarrhea. Can you remaining Minnesotans please get this neanderthal out of office?

Tax evader appears to have no grip on reality

Did I mention following this tax evader's story? He seems not in touch with reality.

DF

rlwrap, a geek's friend

Have you ever used a UNIX command-line utility that doesn't have filename completion? Painful, isn't it? Someone clever produced a wrapper to add filename completion. Here's the example for gnuplot:

$ rlwrap -c -a gnuplot
...
gnuplot> plot "

now hitting tab at that spot (the double-quote) gives you file options. Yay!

DF

Internet Memes

Jenny hadn't seen the Weezer Pork and Beans video, and watching it sent us on an internet meme-fest, reviewing all the referenced videos. I was surprised/saddened that the Back Dorm Boys weren't represented. After Gary Brolsma, they might be my favorite YouTube sensation.

Feymann

Feymann has so many incredible stories.

Surely You're Joking, Mr. Feymann is a classic, but here is a web post. He lived many lives. The only problem with his writings is he set the bar so high for the rest of us.

DF

Five Daily Show segments

The Daily Show makes M and me laugh.

5. Conan fight, the culmination of a week of trash talking on the
daily show, the colbert report, and conan o'brien during the writer's
strike, when they are desperately trying to fill airtime.

4. John Oliver.

3. Kristen Schaal, that made us laugh most recently.

2. Aasif Mandvi in his breakout role (according to us).

And of course,

1. the master of ceremonies.

Lightning and rightness

I found it amusing that it is lightning awareness week because I actually know someone who would care. A quote from the National Weather Service:

In 2007, 45 people were struck and killed by lighting in the U.S.; hundreds of others were injured. Of the victims who were killed by lightning:

• 98% were outside
• 89% were male

M has always decided to get away from lightning by remaining indoors. I have sometimes claimed it's not such a big deal. It turns out my chance of dying is higher.

The best news is, M gets to be right, which most people enjoy greatly.

Luddite alert

I wish to claim my first-class luddite status in the telepatch.

I just ordered DTV converter box coupons from the U.S. gub'ment. They claim it's going to be mailed (!) July 11, and take 2-9 days to arrive. Whoa, speed demons.

The coupon is to hook up my "new" (analog) TV from 1994 (discarded by Riedl). Actually, it's going to hook up the VCR from 1994 (which we bought!), that hooks up to the TV from 1994. We just got rid of JJ's 1983 basement special this past year.

I wonder if DTV will allow me to get channel 2 (public television).

M claims Scott probably had a digital t.v. years ago.

Dan

Underhanded contest

Saw a link on slashdot today to The Underhanded C Contest, which I'd missed in its earlier versions. Kind of an amusing premise, likely more so for someone like myself whose first big projects were in C and who's enjoyed the Obfuscated C Code Contest in the past. I even picked up on the core of the 2007 winner's trick (the bogus prototype for a system call: hello, stack clobbering!), but was too lazy to work through its implications.

I know I'm just forwarding a link already in another blog, but I do like the droll style of the fellow who set up the contest. From its FAQ:

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Won't this contest have a bad influence on our youth?

I don't see why: all I'm doing is inviting people to write malicious software in exchange for money.

Besides, it's not even money. It's a gift certificate for a store that lets you buy innocent things like caffeine pills, knives, butane torches and lasers.

Nice article on Lawrence Lessig in the Nation

I'm excited by Lessig's new project, Change Congress, but will admit to some skepticism about its prospects for bringing about the ambitious reform it aims for. That said, I was struck by the following quote from Mr. Lessig in a recent article in the Nation:

We have an opportunity--and it won't last long--to take advantage of the uncertainty that Congress has about how the Net actually works. They don't get it right now. And while they've learned how to ignore 1,000 e-mails, they haven't quite figured out what to do about fifty blogs talking about various legislation or meet-up events. So there's an opportunity to leverage the technology and the irrational insecurity of members of Congress, who look at any objectively insignificant resistance as something to be dealt with immediately.

I think he's exactly right, in the way the Lessig so often is. We are in the middle of an epochal shift in the way the information and opinion is created and disseminated. The clumsy on-line presence of most politicians (e.g. both McCain and Clinton), provides ample evidence that they do not grok the net in any meaningful way. Not yet.

So perhaps we do have a window of opportunity to change the fabric of our politics for the better. It is a narrow window to be sure, so we'd best press our advantage while we have it.

A number of talks have been posted on blip at: http://change-congress.blip.tv. If you haven't heard one of his Change Congress lectures, you should check them out. I personally find Lessig to be the most effective speaker I've ever heard when it comes complex abstract subjects like this one.

Swing 'Em Home

This one's for you Scott.

"Up your ass Saddam."

Well that took a little longer than I expected

Sent to the patch via email Feb 20, 2007:

Subject: President Obama?

I ran across this anti Iraq war speech by Obama in 2002, when he was a state senator in Illinois:

http://en.wikisource.org/wiki/Barack_Obama's_Iraq_Speech

Two things occur:

1) It would be so nice to have a president that was an eloquent public speaker.

2) If even a fraction of the frankness exhibited in that speech can survive a run for the US senate and presidential campaign, it would quite refreshing compared to the triangulation and maneuvering that seems to have become the norm in current national politics.

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Sent on Jan 8, 2008, the morning of the New Hampshire Primary:

Subject: It's Obama's to lose...

Barring some kind of major shakeup [touch wood], I think Obama's gonna take the whole enchilada. ...

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Sent in the evening of Jan 8, 2008:

Subject: Re: It's Obama's to lose...

Obama lost NH narrowly. Grumble. I guess I'll have to wait until
Feb. 5 to celebrate getting to vote for a presidential candidate I
actually like.

---

And here we are on June 3rd... I guess I was a little optimistic.

You've Been Left Behind

If you receive e-mail from a friend who's been recently raptured, this might be why. Perhaps the site creator is on the level. Perhaps it's an attempt to collect bank info from trusting Christians.

Seen on Bruce Schneier's blog here. Bruce and blog visitors seem as nonplussed as I am.

The Daily Glean

For those of you desiring short, snarky, high-quality summaries of the politics of Minnesota (perhaps a small group), check out the daily glean at MinnPost. A bunch of it appears to be written by David Brauer, former editor of the Southwest Journal, a neighborhood paper that did some pretty high-quality reporting during his tenure.

You learn something new...

While writing this post, I stumbled upon the rather pleasing etymology of the phrase "red letter day."

NYTimes Eulogizes Florent

About a year ago I started a weekly ritual. On Wednesday, I buy a copy of the New York Times and read the Dining and Wine section over lunch. On other days, my normal routine is to eat hastily acquired take-out at my desk, but this one day a week I make it a point to get out of the office and eat a leisurely lunch.

Given my reading material, you might guess that I choose high-end restaurants, but that isn't the case. Sometimes I head to Boat Street Cafe, but lately I've been going to a Yummy Teriyaki in lower QA, hardly an upscale joint. There is a lot more to a good restaurant than white linens and doting service.

Which brings me to Florent. Opened by Florent Morellet over two decades ago, this fixture of the New York scene will be closing next month. The eulogy presented in The Times paints a fascinating history of a period neatly matching my adult life. Viewed through the lens of Mr. Morellet's humble restaurant the article tells the story of a neighborhood and the cultural movements that helped shape it, from the end of disco, through the early days of the the HIV-epidemic to gentrification and New Money. It's a great article, I suggest reading it over a formica counter lightly tacky from years of accumulated grease.

Bill O'Reilly Freak Out Remixes

Of course you're seen the original, and maybe you're seen the (crappy) dance remix. But have you seen the remix intercut with snarky commentary from a fictional producer, or the split screen version showing what bill saw on the teleprompter?

I need to know who I'm gonna vote against

Marc Andreessen points out this commentary on the ongoing Democratic nomination process. Fair warning: don't watch while eating or drinking.

Incredibly Soothing Game

I find this game to be incredibly soothing (you should select that you want the music on). I wish there was a new one of these every day. It totally helped me make the transition from work to home today.

Its predecessor is slightly less soothing due to lack of mellow music.

Sleepless in Seattle

Oh, I'm ever so clever with my blog titles.

Here's the deal, I almost never sleep soundly through the night. I can't remember when my sleeplessness began. I almost always go to bed at about 10:30 pm and get out of bed in the morning at 6:00 am (in the summer) or 7:00 am (in the winter). The problem is that most nights I wake up at least once (usually 2 or 3 am) or twice (1 and 4 am). When I do wake up I really wake up and can't usually get back to sleep easily. Often I resort to browsing the web for an hour or so until I can get tired enough to go back to sleep.

This all seems pretty bad to me. I have a good bed (I think). My room is dark and my neighborhood is generally quiet.

I wish I didn't keep waking up. I've searched the web for suggestions and so far nothing has really changed this trend.

Suggestions
More Suggestions
Even More Suggestions

I'm not willing to take any drugs to facilitate sleep. Humans were able to sleep for thousands of years without pills and I'm not going to break that trend.

Embarassing music purchases

I thought the music lovers might enjoy this post:

http://www.mnspeak.com/mnspeak/archive/post-5423.cfm

A small sampling:

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"I was once dared into buying TV Terror: Felching a Dead Horse. (sfw, except for the name)

I don't even know how to describe it."

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"My first single was Carl Douglas's "Kung Fu Fighting," a song that to this day I consider sublime."

===============

My own embarassing musical purchases? Let me see, I have a whole shelf of stuff I've been meaning to get to Cheapo's for over 10 years...

- Nirvana "Incesticide". More terrible than the name suggests.

- The Capitol Steps "76 Bad Loans". A fun show, not much fun to put on the CD player.

- Howard Jones "One to One". Finely crafted pop single from my youth ('no one is to blame') along with 10 tracks of electronic poopery

Care to name?

Where I was 40 years ago today

May 15th is an anniversary of note for my family. I've likely bored some of you before with my tornado stories, but here's a link including a picture of the one that rolled up my street that day. If you dig into the Charles City photos there, our house was about halfway between McKinley school and the corner of 8th and Hildreth.

We all survived huddled down in the basement, but the family house lost its roof, was twisted on its foundation about a foot, and the only thing left of the garage was a lawn mower (soon looted) sitting on the empty concrete slab.

A memorable day, even for a six-year-old.

Embarassed

Two of the three guys I work with are Canadian. That means I take more than my fair share of abuse for the stupidity of my country's president / policies / electoral system. Why does Bush have to make it so damn easy for my coworkers to harass me?

Aykroyd vs. Hartman

Nerve has a rundown of the 50 Greatest Commercial Parodies of All Time. In my opinion it boils down to a battle between the over-the-top enthusiasm of Dan Aykroyd vs. the perfectly smarmy Phil Hartman (Belushi makes a good showing too). Change Bank or Bass-o-Matic? You be the judge.

Tastes Like Chicken

JMR and I were very big fans of the Chipolte chicken burrito when we lived back in Minneapolis. They don't seem to have as many Chipolte restaurants out here in Seattle. Turns out that may be a good thing.

Dangers of helium leaks

Going the low-brow route, but I must admit that my inner 12 year old found this funny:

http://www.youtube.com/watch?v=6bQpgU67Puo

A Miss South Carolina analogue that actually matters

Various patch-mates have reported enjoying the video in which Miss Teen South Carolina melts down under intense questioning. I personally find the Miss SC video so painful as to be unwatchable. However, the video of Lurita Doan's testimony before the house, where she is shown to have been in clear violation of the Hatch Act, and where the best she can muster is a stuttering "I don't recall" defense (elevated to an art form by another distinguished Bush appointee), is at once painful and pleasing. It's ten minutes instead of fifty seconds, but worth watching.

Taking the GoF to the Woodshed

In this rant (discovered via reddit), Christer Ericson takes the "Gang of Four", otherwise known as the authors of "Design Patterns," to task. My standard line regarding Design Patterns is that it's the worst travesty ever visited on the software engineering profession.

Yes, yes, a couple of the construction patterns are truly useful, but by and large, otherwise smart engineers that have been badly infected with the design patterns meme are worse than useless, they are actively harmful: they end up writing a thousand lines of code to accomplish what could have been done in fifty, nothing can be accomplished in their behemoth frameworks with fewer than five virtual function calls, and they're shocked to discover that the cost of those calls really adds up when they're made smack in the middle of the hottest loop of the application.

My feeling is that the pendulum reached its extreme on this issue a few years ago, but I'm always pleased to see another partisan on my side of the fight.

Joel on Architecture Astronauts

Joel Spolsky, of Joel on Software fame, has penned a vicious indictment of my new employer's latest software offering. Because he's trashing my tribe, I feel more than a little bad calling attention to it, but there's a passage in his essay that is so perfect that I feel compelled to point it out.

At it's core, the post goes after what Joel calls architecture astronauts, high-end engineers who are so convinced of their greatness that they build what they want, without a care for what will actually move their company forward. Once he's defined terms and developed a full head of steam, he busts out the following:

What is it going to take for you to get the message that customers don't want the things that architecture astronauts just love to build. The people? They love twitter. And flickr and delicious and picasa and tripit and ebay and a million other fun things, which they do want, and this so called synchronization problem is just not an actual problem, it's a fun programming exercise that you're doing because it's just hard enough to be interesting but not so hard that you can't figure it out.

Anyone who's been face to reddened face with an architecture astronaut should, at this point, be out of their chair shouting "Amen Brother!" I certainly was.

Chaser's War

An Australian tipped me to the Australian show "Chaser's War." He describes it as "somewhere between The Daily Show and Jackass." Some of it makes me laugh.

- Their spoof of "The Secret"

- Airport security

However, a lot of it is pretty uncomfortable stuff, mostly in service of satire and taking the piss out of .. well, everybody.

- Americans who can't remember when 9/11 happened

- The "mufti muzzler"

Fathoming the Depths of JJ's Psyche

Recently it seems that I'm spending more time than I'd like lying awake in bed from 2am to 4am. Most nights I just lie there wishing I was asleep, listening to the BBC on NPR, or thinking about how tired I will be at work the next day. However, the other night I decided to get up and grab the laptop from the other room.

I decided to catch up on my Boing Boing reading. However, for some reason Firefox had lost its ability to render Flash content which means every video link stopped working. At this point, unbeknownst to me at the time, an interesting psychological experiment began -- what link would finally get me to reinstall Flash on my laptop? Here's the list of video links I passed by and the final link that got me to reinstall Flash. I'll leave it to the reader to determine what this says about me.

Videos that didn't make the cut.
Subterranean Japanese bike-parking robot
Creepy/catchy "It's not a compound" polygamists remix
Re-creation of "Who's On First routine"
Experiment: 96% of passers-by ignore famous artist's street painting
NYPD cop: videoing me breaking the law is a terrorist act
BBtv: Krach der Roboter, the circuit bending noise-bot

The video that finally caused me to reinstall Flash.
Inflatable tube man dances to Cream's "Glad"

Behind The Scenes At Telepatch

Earlier today, JJ wrote me an email complaining that he didn't understand this sentence in my Deep Purple post: "I can't tell if they're taking the piss, or if..."

The following IM conversation ensued:

me: http://en.wikipedia.org/wiki/Take_the_mickey Does that help?

Jon: Ah, didn't know you were British. I think you should assume most people will not know what the fuck you are talking about.

me: It's a bit of slang I learned from Jay, from when he was performing at the Millenium Dome.

me: I considered that problem, I even thought about linking the wikipedia article, or rewriting to avoid the obscure slang. But the thing is, that phrase means exactly what I want to say.

Jon: You should rewrite it. If you link to wikipedia people will just think you are being a snob / douche.

me: To rewrite would be wordier or less precise.

Jon: Eskimos have 14 words for snow but it turns out that we call it snow.

me: I tell you what: when you catch up to me in posts, I'll rewrite it.

Jon: Don't know if I want my posts associated with Douchy McDouche.

me: As you wish.

me: How about I post this converstaion? That would be amusing.

Jon: Do what you want.

Jon: You can say that I think your use of language makes you a wanker (here's a wikipedia link) http://en.wikipedia.org/wiki/Wanker :-)

Jon: I am, of course, using wanker in the metaphorical way that is common in Australia.

me: Ha

me: I'll post this later tonight. I'll send you the edited transcript before posting.

Jon: Don't edit out my cussing is all I ask.

me: Will do.

Boing Boing vs. Ford Motor Company

Earlier today Boing Boing (my favorite blog on the net) ran a story claiming that the web site for Bob Turner's Ford was the one of the worst designed sites on the Interweb. Strangely, the Bob Turner's Ford site has now reverted to some bogus boilerplate Ford type web site and the story on Boing Boing is totally gone. Google still has a cached version of the train wreck that was Bob Turner's Ford site (sadly without the Flash that really put it over the top).

Given that we know Ford has been a thug in the past when it comes to dealing with Internet savvy folks. One can only wonder what may have happened to the Boing Boing post.

SJN, you own a Ford right? How about leveraging your extensive power with the company :-)

Graham analysis of GOOG

Note: slightly edited from first post.

To try to remember some principles of The Intelligent Investor by Benjamin Graham, I thought I would apply some of the analyses to Google. I own some Google stock (GOOG) because I used to work there. When Graham says "the defensive investor" he is talking about someone who is not willing to spend the equivalent of a full-time job (whether professional or amateur) tracking stocks.

Page 159: "For the defensive investor we suggested an upper limit of purchase price at 25 times average earnings of the past seven years." Google has only been public since 2004, so it does not have seven years of history.

Page 259: Simplified formula for valuation of growth stocks:

value = (current (normal) earnings) * (8.5% + (2 * (expected growth rate)))

or

P = E * (8.5 + 2*G)

or

P/E = 8.5 + 2*G

On the flip side, given the price/earnings ratio, one can calculate what the market is predicting for the expected growth rate by solving backwards:

G = (P/E - 8.5)/2

GOOG has a P/E of 38.25, which corresponds to an annual growth rate of ~14.9% or 401% in ten years. Wow!

Page 290:

Factors affecting capitalization:

1. General long-term prospects.

GOOG does not seem to be taking huge special charges or borrowing lots of money, and it has lots of different customers, although only one real source of revenue (ads make up 99%). The company has a very strong brand, and somewhat of a "moat" (people won't switch search engines quickly, especially if they are tied to other apps). The company has a famously long-term focus, and spends 10% of money on 'crazy' R&D.

2. Management.

I think the management team has been executing pretty well, through boom and bust times for the market.

3. Financial strength and capital structure.

Strong. No debt, few liabilities, a building up of cash.

4. Dividend record. "Continuous dividend payments for the last 20 years or more."

It's never paid a dividend.

5. Current dividend rate.

Again, no dividend. Note in chapter 19 (page 506), they make strong claims that often companies building up cash don't actually know how to make lots of money from it. They cite studies showing earnings growth is actually higher when dividends were higher, and companies that "..raise their dividend not only have better stock returns but that 'dividend increases are associated with [higher] future profitability for at least four years after the dividend change."

Most of the information is in Jason Zweig's commentary in the latest edition of Graham's book.
Jason claims a company keeping cash helps management of a company weather downturns, but not the stockholders because it relieves pressure on management to seek highest-yield returns. Moreover, Jason claims big cash allows management to make dumb bets like the AOL/Time Warner merger. Finally, Jason also claims stock buybacks (as an alternative to dividends) just inflate executive compensation (through options for example).

Page 348: Stock screening criteria.

1. Adequate size. Updated commentary (2003) says total market value of >= $2 billion. GOOG has $171B. Check.

2. Strong financial condition. Current assets at least twice current liabilities. GOOG has $27.6B in assets and $3.3B in liabilities (2008 Q1). Check.

3. Earnings stability. Some earnings for common stock in each of past 10 years. FAIL. GOOG common stock is only 4 years old. It's not obvious where to look to see if GOOG has had earnings each year without digging through all the annual reports. I suspect it has.

4. Dividend record. Uninterrupted payments for at least the past 20 years. FAIL. GOOG common stock is only 4 years old and has never paid a dividend.

5. Earnings growth. A minimum increase of at least one-third in per-share earnings in the past ten years using three-year averages at the beginning and end. FAIL. Again, GOOG too new.

6. Moderate price/earnings ratio. Current price <= 15 times average earnings of the past three years. FAIL. GOOG price is $540/share, earnings/share (EPS) is $13.52, $9.94, $5.02 over the last three years (see here), or $9.40 average earnings, so P/avgE is 540/9.40 = 57.4. Note Graham does not believe in forward-looking price/earnings ratio (F P/E) at all.

7. Moderate ratio of price to assets. Current price <= 1.5 times book value last reported or (p/e) * (price/book) <= 22.5. FAIL. Book value is total assets minus intangible assets and liabilities such as debt. Total assets $27.6B, intangible assets $1.2B, goodwill assets $4.7B (not sure if I should subtract that but I will), debt 0, total liabilities $2.4B. So, book is $19.3B and 313.7M shares outstanding would lead to book value/share of $61.5. Current price is 8.8 times book. Am I doing this calculation correctly??

Looking at all the above, I believe Graham would never have bought the stock, and clearly would never hold it.

For fun, here is a link to a Google stock screener that embodies as many of the above criteria as I could find: #1, #5, modified #6, #7. There are only 5 companies on it, and I've never heard of any of them.

Japanese arrangement of Deep Purple's Smoke On The Water

This video made me happy.

The measured pace at which elements are added makes it especially delicious. By the time they were going full bore, I was nearly out of my chair with laughter.

I can't tell if they're taking the piss, or if this is somehow representative of what a traditionally trained Japanese musician perceives when they hear Deep Purple.

Via reddit. Further reading, and viewing.

Some finance reading

For our amusement, here's a post on finance. Many in the patch have well-developed financial thoughts, so I hope patch comments teach me a thing or two.

Here's a few books I've read over the years that have influenced my thoughts, some of their claims, and random musings interspersed. Claims are not facts, since everything in economics is debatable. Still, many of them I believe (not all).

- A Random Walk Down Wall Street. Filled with wonderful stories and fascinating analyses, its major theme is the now oft-repeated truism:

Claim #1: most active money managers perform worse than passively managed index funds, especially after trading costs.

The author Burton Malkiel is a professor of economics at Princeton, a strong proponent of the "efficient market hypothesis" (that a stock price rapidly reflects all known information about the stock), and closely affiliated with the Vanguard Group that offers index funds in line with Malkiel's philosophy. Other themes:

Claim #2: over the last hundred years, stocks have produced higher long-term returns than any other investment vehicle (bonds, gold, art, etc.)

Claim #3: there are two basic ways to value stocks: "firm foundation" (try to determine the true value of the underlying company) and "castles in the air" (try to determine whether someone else will pay more for the stock in the future).

These two basic ways are both present in the market, an essential dualism we will never fully resolve.

He also reviews many past trends in the markets, and updates every decade, so I should buy the new edition.

- One Up on Wall Street. The author is Peter Lynch, manager of the Fidelity Magellen Fund for decades. "If you had invested $10,000 in the Fidelity Magellan Fund when Lynch became manager, ten years later you would have $190,000."

Claim #4: It is possible to beat the market over the long term, but really damn unusual.

I only can remember two people who have beat the market consistently for decades on a large scale, and they are financial superstars. One is Lynch, and the other Warren Buffett, press-dubbed "the sage of Omaha" who manages the fantastically successful Berkshire-Hathaway conglomerate.

A fun parable about after-the-fact observations: mail 512 people that the stock market is going up next week and 512 it is going down. Whichever direction it goes, you correctly predicted the future to 512 people. Divide your remaining trusting audience in two, and repeat. After 10 weeks there is one schmuck who may very well be convinced you are the seer of wall street. Now .. well, if you're a finance guy, you fleece him. To restate generally, out of a large population following random variation may emerge a few exceptional events. Similarly, Lynch and Buffett may simply have been lucky guessers out of a huge pack of fund managers. However, it's hard not to pay attention anyway, especially when they write well.

Claim #5: Don't pick stocks unless you're willing to spend a lot of time doing it right and monitoring the market for when conditions change.

Actually every finance book I've read said the above, but it is a precursor to Lynch's

Claim #6: Buy what you know, especially if your knowledge is uncommon.

If you use a product and like it a lot, if you see a company in your area doing well, chances are you know something more than Wall Street. Research it carefully (claim #5) and buy. This claim can't really be proven or disproven, but it is one of Lynch's big claims. Note it opposes directly the "efficient market hypothesis" claimed above.

- The Intelligent Investor. Warren Buffet (aforementioned star) says "By far the best book on investing ever written." It was written by his mentor, Benjamin Graham.

Claim #7: Successful investment requires a margin of safety.

Graham is a firm "value investor", i.e. look for stocks representing companies that have a proven record of solid earnings and with a price under-representing the "true value." Then in the long term you can't lose. He goes into great detail about many ways to judge solid earnings (e.g., a low price-to-earnings ratio averaged over a number of years, no forward-looking statistics, read the proxy carefully for crazy "nonrecurring charges" which are actually recurring, "pro forma" accounting which means to report earnings as if accounting rules weren't important, avoid odd constructions like preferred stock, warrants to purchase stock, convertible issues) and under-representing true value (e.g., sufficiently low price-to-book value, low debt). This is a 500 page book that reads mostly like an accounting manual, and I wish someone would extract his rules into a concise form.

Claim #8: Successful investing requires emotional discipline.

Graham says several times (and the between-chapter commentary reinforces) that the market sometimes is paying too much, sometimes too little. If you really want to make money, you have to discount what the market is telling you. This turns out to be rare. In fact, I believe Buffett claims that some people can do this right away, but most will never be able to learn it.

- Berkshire Hathaway's shareholder letters. You've heard Warren Buffett is smart and rich. What you may or may not have heard is that he's a great writer. He talks about economics, business, and people in a precise, readable, lively way. He describes a large reinsurance deal in his 2006 letter "Our tale begins around 1688, when Edward Lloyd opened a small coffee house in London." In his 2007 letter: "Former Senator Alan Simpson famously said: 'Those who travel the high road in Washington need not fear heavy traffic.' If he had sought truly deserted streets, however, the Senator should have looked to Corporate America's accounting." Especially you should read his Fortune article describing why for the first time in decades he started betting against the U.S. dollar, taking us to the two-island world of Squanderville and Thriftville.

Fun with google trends part 3

Here's a fun game to play with google trends: find word pairs whose trends move in opposition. I stumbled upon this pair almost by accident. Finding more wasn't as easy as I thought it would be.

Wills and The Great Stork Derby

After many years of procrastination, Pam and I met with a lawyer recently to start the process of getting a proper will prepared. Having no kids has made this long delay somewhat less irresponsible than it sounds: we're joint tenants of our main assets, each other's primary beneficiary, etc., so one of us dying is "easy" in that all the assets shoot directly to the spouse. But it would be a waste of some perfectly good life insurance proceeds if we check out at the same time while intestate.

The task list is pretty basic from Mr. Lawyer: think through who we want assets to go to, chose secondaries, decide who we'd want to have power to pull a plug if needed. A bit bleak, but not unexpected. As with any homework assignment, I came home and consulted the interwebs for help, to see if I could find some examples similar to the sorts of scenarios we might choose. After a bit of somewhat useful research (e.g., notions like per stirpes, which we may use), my good intentions derailed into random link chasing, landing eventually on one Charles Vance Millar, whose whimsical will led to a decade of legal entertainment back in the Great Depression. A good summary is on Snopes, but you have to like any will that opens with:

This Will is necessarily uncommon and capricious because I have no dependents or near relations and no duty rests upon me to leave any property at my death and what I do leave is proof of my folly in gathering and retaining more than I required in my lifetime.

The clause that led to all the fun:

All the rest and residue of my property wheresoever situate I give, devise and bequeath unto my Executors and Trustees named below in Trust to convert into money as they deem advisable and invest all the money until the expiration of nine years from my death and then call in and convert it all into money and at the expiration of ten years from my death to give it and its accumulations to the Mother who has since my death given birth in Toronto to the greatest number of children as shown by the Registrations under the Vital Statistics Act. If one of more mothers have equal highest number of registrations under the said Act to divide the said moneys and accumulations equally between them.

The winning count of births? Nine.
The number of women who so inherited? Four.

It all amused me, anyway...

Nutjob high achiever

Nutjobs are nothing new. However, this guy really keeps the bar high. Jesus Christ is telling him to "take out" (!) a judge involved in his trial about not paying taxes on $5.6 million in income. He joins his own made-up court and starts issuing subpoenas .. well, frankly I can't sort it all out.

Hey, does anyone know what happened to Wesley Snipes in his tax evasion case?

DF

Update: Actual quote:

"Are you trying to force me to present myself as a U.S. person against my will? Well that is a capital crime," Beale said. "Is the defendant a fictional corporation?"

Uh .. this guy can make $5.6 million? There are mysteries I cannot unravel.

A little context

If you've stumbled upon telepatch at random and are wondering who we are and what we're up to, you can get some context over here.

Why being the latency monkey makes you want to shoot yourself

Dan brought to my attention this nice post summarizing some research on the effect of gratefulness on mood. Three groups were asked to write down a list of 5 events and to fill out a survey on their mood and health at regular intervals. One group wrote down things they were grateful for, another group wrote down things they found irritating, and the control group wrote down events of any nature.

As you might expect, the grateful group had a more positive outlook than the irritating group. Beyond that, the grateful group was healthier, they got more exercise, they slept better, and so on.

"Ok fine," you say, "why is there a monkey over there?" For a while at Amazon, I was the Manager of Website Performance and Availability. Very fancy sounding title, but I liked to refer to myself as the latency monkey, because a major part of my job was to make sure the site was running fast (i.e. with low latency). Whenever something went wrong, and some chunk of the site got slow, I tracked down why and got people to fix it. Each week I wrote a report summarizing everything that went wrong in excruciating detail, and presented it to a room of directors and VPs in a weekly metrics meeting. It was as sisyphean a task as any you can possibly imagine. In a software system as large, complex and constantly changing as amazon.com, something is always going wrong; documenting failures is an endless task.

In short, my job was to make a list of irritating things each week, and I was widely regarded as having done it as well as anyone ever had. Given the present research, it's no wonder that I found this job to be the most soul-crushing work I've ever done. I totally burned out in a year, as did the person who held the job before me.

I tell you this story as a cautionary tale. Try to find work that allows you to focus on positive things. Avoid like the plague any work that focuses on negative things.

The authors of the study speculate that simply enumerating things you are grateful for might be a treatment for mild forms of depression. I suggest the opposite: enumerating things that you find irritating might cause a mild form of depression.

50 Greatest Comdey Sketches of All Time

What's that? You want to lose the next hour of your life? Glad I could help.

50 Greatest Comedy Sketches

It's super annoying how you hop from one site to the other when you page through the results, but I can't help that.

Although Dave Chappelle makes the list in a couple spots I couldn't believe that his Internet sketch didn't make it.

Dave Chappelle Internet Sketch

Our Childhood Writings

Here are two of my favorite links from MORTIFIED (a comedy show featuring people reading their childhood writing). Undoubtedly the first link will make Dan a bit uncomfortable, but there's a chance that he will find it to be funny. I, of course, can always lose myself in the inherent humor in pain.

I Hate Drake

Stairway to Winnipeg

Oops, that was a lawyer we just stepped on...

On slashdot, so maybe already by seen by everyone, but I was amused. Monster Cable sent a C&D letter to a competitor not realizing the target's president was a lawyer. The guy's response:

Blue Jeans Cable Strikes Back - Response to Monster Cable

It's long, but the entertaining part is the last three or so large paragraphs. I especially liked, "Not only am I unintimidated by litigation; I sometimes rather miss it."

Liveblogging the World Curling Championships

I get the CBC here in Seattle, and they often carry curling on the weekends. Today it's the final of the men's world championship with Canada's Kevin Martin facing Scotland's David Murdoch.

12:24: 1st end was a blank, Canada stole one in the 2nd. The third end just finished with Scotland scoring 1 and giving up the hammer. Score is tied at one all.

12:31: 4th end is looking to be a blank. For the uninitiated, when you have "the hammer" it means that you get to throw the last rock, which is an advantage. Generally you want to score two or more when you have the hammer. If it looks like you'll only score one, you generally prefer to score none to keep last rock advantage.

12:34: 4th end is a blank. Canada keeps the hammer. Score is still one all.

12:40: Canada setting up to score in the fifth.

12:43: Scotland picks their own stone, Canada lying two.

12:48: Scotland, faced with a tough double peel on their second to last stone, chooses the easier hit and roll, but leaves their shot stone exposed.

12:53: Scotland plays a great hit and roll to lie shot. Martin barely makes a tap, clearing Scotland's stone to score two. His hit was a lot thinner than he was hoping for, and I thought he'd only get one, but he stuck it for two. Score is 3-1 after 5 ends. Scotland has the hammer.

12:58: 6th end underway. The announcer says that since 2000, Martin is 28-0 when up 2 without the hammer after 5.

1:08: The 6th is a blank. 3-1 Canada, Scotland keeps the hammer.

1:15: Great sweeping from team Canada!

1:22: Martin misses his double, Scotland has a shot at two.

1:25: Murdoch's first stone is good, to the top of the four foot. Martin will try to hit and roll to the button to lie buried.

1:26: Martin's hit and roll looks perfect! Canada may steal?

1:28: Murdoch tries a very difficult in-off for two, but misses it thick. Canada steals one! Canada now up 4-1 after 7. Correction: it was an angle raise, not an in-off.

1:41: Martin plays a heavy peel with his last rock, rolling across the rings and behind one of Scotland's rocks to lie shot.

1:45: Murdoch clears Canada's rock to score their deuce. 4-3 after 8, Canada has the hammer.

1:56: Murdoch's first stone in the 9th wrecks on his guard. Canada lying shot, though exposed. Good chance to Canada to score two.

2:01: Martin's first stone is heavy, leaving an out for Murdoch. Murdoch throws a freeze, and lies shot. Martin has a shot for three, will likely get two.

2:02: Canada scores one for sure, but the officials will have to measure the second...

2:04: Canada gets their deuce! 6-3 Canada going into the 10th.

2:13: Martin with an easy out-turn hit for the championship... and he makes it! Canada wins!

What was the #1 song on the day you were born?

Via reddit: http://www.joshhosler.biz/NumberOneInHistory/SelectMonth.htm

It seems inauspicious that for me it's "Mama Told Me (Not to Come)."

Red vs. blue on the web

A blog post graphing blue vs. red of several popular web sites, as
measured by Nielsen.

http://gawker.com/5005006/the-most-liberal-sites-in-america

DF

Why records sound the same

Ok, I'll try a post.

I spent some of my weekend gathering scattered mp3 files from a couple machines, so bumping into this article seemed an odd coincidence:

Why records DO all sound the same

Find out about playlist generation for Hot Adult Contemporary stations and other exciting music biz trivia.

- Scott

More fun with google trends

This chart has something interesting to say, though I'm not quite sure what.

Walking a pack of dogs

A blog of a guy who walks lots of dogs for a business, just interviewed in the Southwest Journal. Some pictures included.

http://citizenkanine.wordpress.com/

DF

Google trends == Art?

I found this chart to be aesthetically pleasing.