Sunday, September 21, 2014

Quote of the day

Anthony Bourdain:

There’s a guy inside me who wants to lay in bed and smoke weed all day and watch cartoons and old movies. I could easily do that. My whole life is a series of stratagems to avoid and outwit that guy.

Saturday, September 20, 2014

MBA, Innovation, & Selection Bias

Nathan Furr makes the case over at Slate that many notable innovators have qualms about hiring MBAs because, he thinks, the MBA curriculum teaches skills used in large, industrial corporations where there is more certainty, at least in comparison to innovative, start-up-ish companies.

FLG, who has an MBA, largely agrees, but thinks Furr misses something more fundamental -- selection bias.  People who chose to get MBAs, particularly name brand MBAs, are those who, pretty much by definition, are choosing the safe, well-worn path.  The stereotypical Harvard and Stanford MBA is somebody who did an Ivy League undergrad, then worked for McKinsey or Goldman for a couple of years, before heading to Palo Alto or Boston to punch their ticket one more time.   Basically, somebody who is extremely good at working within the established system, not the against the grain type that is needed to innovate.   The content of the coursework only further intensifies this, but the root is there at the selection bias.

Also, FLG realizes this reality flies in the face of the elite B-School marketing that emphasizes the social anthropology grad who did a tour in the peace corps and then successfully launches a company that produces cheap, solar powered toilets that produce potable water for the developing world, but that is just too bad. 


This is fantastic:

Quick Round-Up

As The Ancient hinted in the comments, September 19th was International Talk-Like-a-Pirate Day.   FLG knew, but didn't get around to posting.  He thinks this might be the second year in a row, which is makes FLG sad.

On an completely unrelated note, apparently, the gray matter volume of a region in the right posterior parietal cortex is positively correlated with risk seeking.  FLG was then curious whether males this varies by sex, as this could explain why women are more risk averse than men.  Upon googling sex variations in the right posterior parietal cortex, he found this article, which reads like a bunch of gobbledygook and FLG isn't even sure he understands because he lacks sufficient knowledge of brain biology and isn't interested enough to learn it, but the last paragraph says:
in an MRI study of cortical volumes Kennedy et al. found normal sex differences in the parietal lobe, but although left and right hemispheric measurements were obtained, the authors did not specifically examine sex-by-hemisphere interactions (Kennedy et al., 1998). As sex-based asymmetries in the IPL have not previously been examined, we thus made the following hypotheses: (i) males have greater total IPL volumes compared to women, (ii) males have larger left versus right IPL volumes and (iii) males have larger left IPL volumes compared to women.

This is contrary to what FLG would have assumed.  If more gray matter in the right posterior parietal cortex is correlated with risk seeking, then presumably smaller volumes would be associated with risk aversion.  Yet, males, who are more risk seeking, have larger left relatively to right hemispheres.   Then again, the other article was just comparing gray matter volume of a particular region in the right posterior parietal cortex with the volumes across subjects in some absolute sense, not relative to the right.  So, the risk seeking behavior could be explained by the greater total volumes men have compared to women.   OR these studies could be talking about completely different parts of the brain entirely.  FLG, quite frankly, isn't very clear.

Wednesday, September 17, 2014

Quote of the day

Matt Levine:
If you can find the people who generate alpha, and convince them to give you some of it, then that's great. If not, probably stick to indexing.

Sunday, September 14, 2014

FLG is currently listening to

Quote of the Day

it appears that technical abilities are highly valued among recent graduates, which explains why a student who graduates from an engineering program at California Institute of Technology will likely be better compensated, at least up front, than a Harvard graduate with an English degree. It also seems that those specialized skills offer a comparative salary edge for only a handful of years before that advantage begins to dissipate--and the salary benefits of a holistic, liberal arts education begin to catch up.

Ties in well with what FLG has been writing about STEM education for years.

Saturday, September 13, 2014

Is That Really Your Job Title?

FLG noticed that somebody had their job title listed as Principle on LinkedIn.   FLG made note to never do business with a company whose Principal  doesn't know the difference between Principal and Principle.

Tuesday, September 9, 2014

FLG Goes Back To Tocqueville

There are a few passages from Tocqueville of which FLG is particularly fond of posting and reposting.   This article about how a hodgepodge of online courses will never replace a proper degree makes FLG want to post one of them again.

Enter the “nano-degree.” If you can’t “disrupt” education through innovation, the thinking goes, just downsize it so much that it becomes training for just one task that a particular company wants at one particular moment.
We’ve seen this many times before in American history. As I recently pointed out in Beyond the University: Why Liberal Education Matters, Booker T. Washington wanted to help ex-slaves acquire practical skills so they could become self-sufficient after the Civil War. And around the time of World War I, chambers of commerce and labor federations united to back legislation for a dual secondary educational system. According to that plan, some young people would be trained for specific jobs, while others would get a broad education allowing them to continue their studies in college. The movement led to the Smith-Hughes Act of 1917 to finance vocational instruction.
Those who opposed this vocational turn certainly realized that people needed skills to get jobs. But they also realized that this kind of tracking would only exacerbate social and economic inequality. As John Dewey wrote, some of us “are managers and others are subordinates. But the great thing for one as for the other is that each shall have had the education which enables him to see within his daily work all there is in it of large and human significance.”
Education should aim to enhance our capacities, Dewey argued, so that we are not reduced to being somebody else’s tool. “The kind of vocational education in which I am interested is not one which will ‘adapt’ workers to the existing industrial regime; I am not sufficiently in love with the regime for that.”
This is what Udacity is missing in its willingness to tailor its program to the existing industrial regime’s immediate needs. “You'll learn skills that match industry demands,” the company promises on its website. “With the credentials to prove it.” Fiona M. Hollands of Teachers College Columbia University voiced cautious approval, telling the Times: “We still need rounded people, which you can’t get through mini-certificate courses. But we also have an economy to run here.” Those who make the most lasting contribution to the economy, however, will be the “rounded people.”

FLG, who is deeply skeptical of all things John Dewey, thinks we ought to heed this passage from Alexis de Tocqueville:

It is important that this point should be clearly understood. A particular study may be useful to the literature of a people without being appropriate to its social and political wants. If men were to persist in teaching nothing but the literature of the dead languages in a community where everyone is habitually led to make vehement exertions to augment or to maintain his fortune, the result would be a very polished, but a very dangerous set of citizens. For as their social and political condition would give them every day a sense of wants, which their education would never teach them to supply, they would perturb the state, in the name of the Greeks and Romans, instead of enriching it by their productive industry. It is evident that in democratic communities the interest of individuals as well as the security of the commonwealth demands that the education of the greater number should be scientific, commercial, and industrial rather than literary. Greek and Latin should not be taught in all the schools; but it is important that those who, by their natural disposition or their fortune, are destined to cultivate letters or prepared to relish them should find schools where a complete knowledge of ancient literature may be acquired and where the true scholar may be formed. A few excellent universities would do more towards the attainment of this object than a multitude of bad grammar-schools, where superfluous matters, badly learned, stand in the way of sound instruction in necessary studies.

Monday, September 8, 2014


Did anybody else know that schools are banning dodgeball?   FLG was just informed when asking what Miss FLG Maior was doing in gym class.   What the fuck is wrong with the world?   FLG will tell you what, a bunch of yellow-bellied sissies mollycoddling the fucking kids.

Tuesday, September 2, 2014

Social Interaction

FLG found this article about politeness interesting.  It's different than the article about male charm FLG was so found of.  Politeness and charm are somewhat overlapping, but ultimately different things.  In fact, some of the most charming people occasionally breach certain norms of politeness.  Or perhaps in a Picasso-esque way, the charming know the rules, so they can break them.   In any case, a few things stuck out.

This passage, considering FLG's focus on time horizons:
She was surprised to see the stubborn power of politeness over time. Over time. That’s the thing. Mostly we talk about politeness in the moment. Please, thank you, no go ahead, I like your hat, cool shoes, you look nice today, please take my seat, sir, ma’am, etc. All good, but fleeting.

But then there's this statement:
One way to be polite is by not touching people unless they specifically invite it. 
And perhaps this is where the politeness versus charm divide is so striking.  FLG thought of the passage from Primary Colors about the handshake:
The handshake is the threshold act, the beginning of politics. I’ve seen him do it two million times now, but I couldn’t tell you how he does it, the right-handed part of it—the strength, quality, duration of it, the rudiments of pressing the flesh. I can, however, tell you a whole lot about what he does with his other hand. He is a genius with it. He might put it on your elbow, or up by your biceps: these are basic, reflexive moves. He is interested in you. He is honored to meet you. If he gets any higher up your shoulder— if he, say, drapes his left arm over your back, it is somehow less intimate, more casual. He’ll share a laugh or a secret then—a light secret, not a real one—flattering you with the illusion of conspiracy.
If politicians are anything, they're charming.  And then there's the Pick-up Artist community, which while not concerned with charm in the traditional sense or for its own sake, is on the other side of the not touching people divide:
Short for kinesthetics, "kino" is PUA language for light touching in order to get a lady in the mood.  

Even after all that, FLG isn't exactly sure of the relationship between politeness and charm, but if he had to be called one, then he'd prefer charming.

Monday, September 1, 2014

Grammar & Status

The person with the higher status uses the word "I" less.

We use "I" more when we talk to someone with power because we're more self-conscious. We are focused on ourselves — how we're coming across — and our language reflects that.
FLG found this fascinating because, just the other day, one of his newer coworkers was drafting an email to a very senior financial executive and asked FLG to review before sending.  FLG's comment was to drop as many "I"s as possible.  Sounded too submissive.

Sunday, August 31, 2014

Thursday, August 28, 2014

Quote of the day

Matt Levine:
Here is some market intelligence for you: Don't insider trade in short-dated out-of-the-money call options! Come on. 

The Euro

FLG has long said that the euro is fundamentally a political, not an economic or financial issue. Megan McArdle:

It’s hard to see how anyone gets out of the euro without at least a deep local crisis, and quite possibly another round of global crises, as the chain reaction melts down markets around the world.


That doesn’t mean that it won’t eventually happen; I still think this remains a real risk. But if it does, public officials will probably be denying the possibility right up to the bitter, unpleasant end.
What makes McArdle's post interesting is that even though the creation, continuation, and dissolution of the euro is fundamentally political issue, it doesn't mean there won't be economic and financial pressures on and consequences of those political decisions.  FLG brings this up because it's easy to be confused, and many people are, that the euro is an economic issue because of this interaction.

Monday, August 18, 2014

Getting Older

FLG saw a picture of one of his high school classmates who is now a dead ringer for Truman Capote.  It freaked FLG out.


A couple of weeks ago, FLG was sitting in his backyard, smoking a cigar, watching a swarm of bees around a tree.   It reminded him that when he was elementary school he was deathly afraid of killer bees.  FLG's memory is verbatim this explanation -- a dystopian killer bee future where everybody would be afraid to go outside.

That never came to pass, but then FLG was on the shuttle flight up to New York last week, reading the Wall Street Journal, when he saw this article.  So, there was something to the fears.

Sunday, August 17, 2014

FLG's Dream Pocket Square

FLG has a few of the very cool pocket squares from Kent Wang.  This is his personal favorite.  Some others are inspired by tapestries.  If Kent Wang ever offered a pocket square of this tapestry depicting the Battle of Gaugamela, it would be awesome and FLG would be the first to buy the damn thing.  

Time Horizons: Annie Edition

FLG hasn't seen Annie in decades, but it was on TV yesterday.

Assistant:  President Roosevelt called three times. He said it was urgent.

Daddy Warbucks: Everything's urgent to a Democrat.

Monday, August 11, 2014

FLG Didn't Know

Strategy Page:
Like Israel, Singapore can mobilize a force that can defeat any of its neighbors.

Friday, August 8, 2014

Time Horizons: Immigration

President Obama is impatient. Congress won’t act on immigration, he says, and therefore he will. 

Prime example of differing time horizons at work.  

Obama:  There is injustice happening now.  Something must be done about it now.  Potential future and second order consequences are not as important as the current and tangible problem.

The Right (and in this case the Right stretches, as Krauthammer points out, pretty far into moderately left leaning folks):  Potential future and second order effects of this type of action are far more important than the current and tangible problem.

This also highlights one of the aspects of the time horizons theory that FLG took a while to understand -- policymakers of both parties in a democracy are inherently more short time horizon oriented. 

FLG Objects

...on general principle to any list of best college campuses that doesn't include the University of Colorado at Boulder.

Saturday, August 2, 2014

Quote of the day

We’re at the crest of a swelling wave of nostalgia for vast corporate bureaucracies, which are easier for vast government bureaucracies to heavily regulate without driving them out of business entirely.

God help us. 

Tuesday, July 29, 2014

Nest Egg Choices

Until recently, retirees with defined contribution plans (401ks for those here in the States) had to buy an annuity, which provided a guaranteed stream of payments for life, when entering retirement.   Given the low interest rates over the last few years, it doesn't surprise FLG that this has come into question.   If you happen to retire when rates are low, then you are pretty much screwed with low payments for life. 

Buttonwood mentions that independent advisers are now going to be helping retirees.  He's skeptical of all the conflicts of interest, but this really struck a cord with FLG:
When the government abolished the need to annuitise, it was hailed as a great populist move. I worried at the time that this was a mistake; annuity rates are low because bond yields are low and people live longer. If people think that they can beat what is, in essence, the risk-free rate, they will have to take risk. And who will they blame when the risk goes wrong and they run out of money in their late 70s, as will inevitably be the case for some people? Not the independent advice centre, one suspects
Assuming a retiree does some comparison, then the annuity rate should be the risk free rate.   Therefore, anything above that is by definition risky.

FLG's Personal Wealth Management professor suggested pouring enough money into TIPS so as to guarantee bare minimum nest egg at retirement and subsequent lifetime stream of payments.  Anything above that, which necessarily entails risk, would be gravy.   When you run the numbers in a extremely low interest rate environment like today with the a multi-decade retirement, the prospect of saving even a subsistence level nest egg is downright daunting.  But that doesn't change that doing anything else pretty much necessitates taking on risk.  And with risk, somebody is going to lose out.

Saturday, July 12, 2014

FLG's Currently Listening To

Celebrity Sighting

FLG saw Ezra Klein at Pop's Old Fashioned Ice Cream in Old Town Alexandria.

Now, some of you may be saying, Ezra Klein isn't a celebrity.  Okay, but FLG perused his list and Ezra's probably more famous than some of the others on it.  So, updating the list.

Patton's Speech to the Third Army

Patton was on the other day and FLG simply cannot resist watching the first five minutes.  

What struck FLG, however, is that most people probably think that is the actual speech verbatim.  It's not.  Or at least it's not the exact speech of that attendees recall.  Wikipedia has that version.  It's a much better speech.  The movie version would have been dramatically improved with these included:

All through your army career you men have bitched about what you call 'this chicken-shit drilling.' That is all for a purpose—to ensure instant obedience to orders and to create constant alertness. This must be bred into every soldier. I don't give a fuck for a man who is not always on his toes.
I don't want any messages saying 'I'm holding my position.' We're not holding a goddamned thing. We're advancing constantly and we're not interested in holding anything except the enemy's balls. We're going to hold him by his balls and we're going to kick him in the ass; twist his balls and kick the living shit out of him all the time. Our plan of operation is to advance and keep on advancing. We're going to go through the enemy like shit through a tinhorn.

Yes, yes.  I know that second part is in there without the foul language.  But if foul language isn't appropriate when you are about to invade Normandy to fight the Nazis and fight for fucking freedom, then I don't know when it is.


Friday, July 11, 2014

Birth Control Fervor

FLG is completely astonished by these types of statements:
“The women of America . . . are saying it: It is not our boss’s business, it is our business what kind of health care we need"

FLG always tries to see the logic on the other side of any argument, but this strikes FLG as almost self-evidently ridiculous.  It's not that anybody's boss is saying their employees can't go buy birth control.   The actual fact is that there are a few very religious bosses who are saying they don't want to buy certain types birth control for their employees.  That seems like a perfectly reasonable stance.  Employer doesn't buy it.  Employee can.  Problem solved.

The other side, which seems to be, I have a right to health care...The health care choices I make are between my doctor and me...That anybody would interfere in any way is a violation of my rights...misses that having a right to health care necessitates that somebody else pay for that health care.  Once that happens, isn't it just common sense that the somebody else doing the paying (your uncle, your employer, the government) then does have an interest in the health care choices you make?

Heck, let's set aside employers and instead go to the government paying for the service.  Remember when conservatives were concerned about death panels coming out of Obamacare?   There the interest is cost, not religious objection, but the point still stands.   Once somebody else starts paying for your health care, they have an interest in what they are paying for.   For the government, the controversial bits will be related to expensive end-of-life care. (In fact, at that time, FLG remembers liberal commentators saying that if individuals were unhappy with the amount of care provided by the government, then nothing would prevent individuals from buying additional care on their own.  He'll have to find the old posts.) For closely-held, religious companies, it's certain types of birth control.  FLG has a hard time seeing how this is some gross violation of individual rights.

Although, to be completely clear, FLG would be more sympathetic if this were about extremely costly procedures or medicines, but it's not.   He has a hard time believing that the aggrieved, who are in jobs with pretty good health care coverage to even worry about this issue in the first place, would be bankrupted by paying for this out of pocket.

Friday, July 4, 2014

Wednesday, July 2, 2014

Quote of the Day

12) What if my employer says it has a sincere religious belief in human sacrifice -- can he kill me?
Yes. If your employer has a deeply held religious belief in human sacrifice, they can strap you in a cage, reach into your chest with their bare hands to pull out your still-beating heart, then drop the cage into a fiery pit. It’s a tough break, but from time to time, the Tree of Liberty must be watered with the blood of patriots. Sorry about that.

Tuesday, July 1, 2014

Dark Pools & Charts

Matt Levine:
The naive reading of that chart is: "We have a lot of institutional investors and very limited predatory trading in our dark pool." But the correct reading of the chart is: "We have software that allows us to produce this chart." The chart is a perfectly self-referential object, demonstrating only that the chart exists. The chart is a chart of how much chart there is.

Monday, June 30, 2014

FLG is currently listening to

FLG has never really paid attention to the video before, but he noticed just now that the bar patio they are sitting on is the Wynkoop Brewery in Denver, which brews his favorite beer -- Rail Yard Ale.

Given this low rating, FLG must assume it doesn't taste as good out of the can as it does out of a tap.  Sawtooth from the Lefthand Brewery does pretty damn well though and FLG's favorite beer he can actually buy in the DC area.

Thursday, June 26, 2014

Texting and Grammar

Overall, we found no evidence that the use of grammatical violations in text messages is consistently related to poorer grammatical or spelling skills in school students.

FLG is skeptical. 

Sunday, June 22, 2014

Too Much Emphasis On The Little Guy

FLG agrees wholeheartedly with this:
This is the sort of thing that drives me nuts. Of course "smaller investors are being penalized." They're being penalized all the time, in everything that they do. They get worse research, worse service, worse allocations, worse customer perks, worse everything. There are volume discounts on bonds, as there are on most things in life. Is this unfair? I really don't care.

Later on...
 The SEC's job is to regulate the financial markets. One way to approach that job would be to put a priority on optimizing market efficiency and stability. Another way to approach it would be to put a priority on protecting retail investors and preventing two-bit frauds. Obviously both are good but one is more important. If you think about bond market structure in terms of protecting the little guy, you will make one set of choices; if you think about it in terms of providing a stable liquid platform for massive flows of capital, you will make a second, probably somewhat different, set of choices. The second set of choices is probably right.

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