Sunday, March 29, 2015

Quote of the day

Asness and Brown:
You can believe the models if you like, or you can look at the data and assume the most likely future is an extrapolation of the past. What you cannot do is both.

Friday, March 27, 2015

Washed Too Many Times?

When FLG saw this jacket, he thought, hey, pretty nice.  Linen and cotton.   Unlined.  Looks pretty unstructured.   Nice neutral color.   Not too pricey for a nice tailored jacket.   Then he saw the pictures of it on the model.

It looks all shrunken and doesn't come close to covering his ass.   Look, who the fuck does FLG have to draft a memo to get this taken care of permanently?  (Probably Thom Browne.) A men's tailored jacket needs to cover the ass.   This isn't negotiable.  The rule isn't some irrational, arbitrary thing perpetrated by pedantic old fogies.   It's the product of many years of figuring out what looks best, and a shrunken jacket that doesn't cover the ass is not it.   People wearing them look infantile.

Fuckitty-fuck fuck.

Thursday, March 26, 2015

Quote of the day

Every time Facebook spend a billion dollars on some startup with three employees, or whenever a venture capitalist makes an investment that values some company you never heard of at tens of billions of dollars, it would be great if people simply would say:
“I don’t understand that!”

Hallelujah and Amen! 

Monday, March 23, 2015

FLG Learned Something About Statistics In College

A few days ago, Frank Bruni wrote a piece, to hype his book, arguing that where you go to college doesn't matter.  FLG is somewhat sympathetic.  If a smart kid, who could otherwise gain entrance to an elite school, decides, for financial reasons, to attend their flagship state school, they'll be fine.  In fact, if they then go on to an elite graduate school, they probably saved a bunch of money and end up in the same spot.

Regardless, FLG saw a major flaw with some of the data Bruni used to support his position:
among the American-born chief executives of the top 100 companies in the Fortune 500, just about 30 went to an Ivy League school or equally selective college.

Okay, so only around 30% of the Fortune 100 CEOs went to a selective school, but here's the issue:
elite college and universities, however, they enroll fewer than 6 percent of U.S. college students 
So, elite school graduates are roughly 5x over-represented from what one would expect from a random draw, which sorta makes it harder to argue that there isn't that much value in attending those schools.   FLG made a note to look at more of the data, but he knew he'd never get around to it.

Luckily, somebody else did.  

Sunday, March 22, 2015

FLG Doesn't Get It

Every once and while, FLG feels compelled to write another post about some of the products Mr. Porter sells, the ones he doesn't get.  To be clear, this isn't to rail against the bourgeois capitalist conspicuous consumer.  As regular readers know, FLG loves himself some Charvet ties.  (He recently got this one and loves it.) It's more a question of taste.

$1,400 for these sneakers?  You couldn't pay FLG $725 to wear these.  What's wrong with a $50 pair of Chucks?  Oh, that's right.  Nothing.

FLG thinks the Loro Piana stuff is almost always way pricier than he'd be willing to pay, but at least he gets the appeal.  For example, these sneakers are pretty cool.    Not $825 cool, more like $100 cool, but still cool.  FLG gets it.  In fact, FLG would buy most everything Mr Porter has from Loro Piana, if he won the lottery, but he would never pay $1,400 for sweatpants.

He does find himself torn on driving shoes.   Driving shoes, since they can't be repaired and the little rubber nubs rub down so fast, seem like a massive waste of money.  However, he really wants to get a pair of blue suede ones.  Not these $450 ones, mind you.  Maybe these Allen-Edmonds ones, which are on clearance.   Or maybe these for $95.  (Although, these purple ones for 295 euros FLG thought about for maybe 5 seconds.)

Wednesday, March 18, 2015

Robo-Advisers

FLG found this post about Robo-Advisers interesting.  He did have an issue with this part:

[Robo-advisers] basically combine simple asset allocation formulas with slick user interfaces on the Web to encourage people to put in their money and leave it there. The algorithms are mostly so simple that a finance doctoral student could implement one in less than a day of coding. That, after all, is the key to passive management. 
 FLG, who is not a finance doctoral student, could probably implement a Robo-Adviser in less than a day.   Well, maybe two days.  He hasn't coded in a while.

FLG does agree with this though:
The real value proposition of robo-advisers is behavioral. Investors are subject to an array of biases, including the temptation to chase returns and to try to time the market. Robo-advisers, with their fancy user interfaces and user experiences, hope to be able to cancel out these biases.
If you think about it, this must be the value-add of robo-advisers. After all, just buying a few ETFs and index funds on ScottTrade, and then forgetting about them for 20 years, will generally give you just as good a return as what the robo-advisers are offering, for slightly lower fees. Index funds basically are robo-advisers without the front-end. Robo-advisers add value if -- and only if -- investors find it much easier to give their money to a robo-adviser than to do the procedure I just described. That’s why robo-advisers are, fundamentally, applied behavioral finance technologies. 
FLG used to be very interested in optimizing his portfolio.  Or perhaps not optimizing, but rather understanding how to optimize it for when he started really looking into his portfolio.    Then one day he realized there are rapidly diminishing returns to getting to optimal.   So, now his portfolio consists of a Total Market Fund, an Ex-US Total Market Fund, and a US bond fund with super low expense ratios.

(He wishes he could find a good Ex-US bond fund, but the fees are always too high.  FLG always assumed the high fees were related to tax treatment of interest income, but has no idea why.)

(Oh, and FLG has a little bit of money in the TSP G-Fund, which he treats as if it were the risk free asset.   His finance professor argued for treating TIPS held to maturity as if they were the risk free asset, which makes sense, but the convenience of treating the G-fund as the risk free asset instead of dealing with actual individual TIPS is too appealing.)





Sunday, March 15, 2015

Speaking Of...

Julius Caesar.  FLG just realized it is the Ides of March.  Beware.
















That is all.  

Friday, March 13, 2015

Does Nobody Know Shakespeare Anymore?

The other day, in response to a situation too complicated and too specific to detail here, FLG said, "Ambition should be made of sterner stuff."   Nobody, not one person, got the reference.   And we are talking about a half a dozen people most of whom have multiple degrees from Ivy League schools.

It's not like FLG was pulling quotes from Timon of Athens (not that he could).  It's one of the most famous soliloquies (well, technically FLG guesses it's a monologue, since Antony is addressing a crowd not talking to himself but still) not just in Shakespeare, but the entire English language, and arguably in any language.   It's not far behind Juliet's or Hamlet's.  The world is going to fucking shit.

Thursday, March 12, 2015

FLG Is Disappointed With Himself

He only got 15 out of 18 right!

http://www.buzzfeed.com/robinedds/the-hardest-name-that-country-quiz-youll-take-today

Wednesday, March 4, 2015

Hillary & Email

FLG had the same reaction as Megan McArdle to the news that Hillary never had a State Department email, but instead used a private email account -- What can [she] have been thinking?

He hasn't been able to get up the energy to write about it because, well, people's views on Hillary are pretty much set.    People who think she is dirty --- think she is dirty.   People who think she is a victim of some massive right-wing conspiracy or, frankly, don't care if she is dirty as long as she is championing the causes they care about -- don't care.   In fact, you could probably release information tomorrow that she was eating Ibocaine at a Berlusconi Bunga Bunga party hosted at a house she rented out with funds from the Iranians using the Clinton Foundation as a pass-thru and her poll numbers wouldn't budge.


Monday, March 2, 2015

Party like it's 1696

It's pretty cool that the Bank of England released a spreadsheet with its balance sheet going back to 1696.
 
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