What I'm reading: "Expert Political Judgement" by Tetlock and "The Predictioneer's Game" by de Mesquita

Again, two books at a time. "The Predictioneer's Game" will end up as the travel book, much more focused on "story telling" than methodology at this point. "EPJ" is a "Fox and Hedgehog" on academic steroids so far.

What I've read: "Black Swan" and "The Future of Everything"

For whatever reason I've developed the habit of reading two books at a time: one at home and one on my way to work. I just finished both "The Black Swan" (in paperback) and "The Future of Everything." Both are about forecasting and why it's so hard. Will put up a summary of both.

I have to say that about half way thru The Black Swan Taleb's arrogant personality does seem to fade into the background, so if you can get there it's worth the effort.

And while "The Future of Everything" is a bit of a tome, the going is very easy and he does draw some good conclusions between weather, finance, and health-related forecasting.

Self-denial as IQ predictor

Well, not quite exactly, but this New Yorker article is pretty interesting none the less.

Not quite sure if this is an evolutionary trait or a learned behavior, but then again the PhD's studying this aren't either.

Thoughts on Social Mobility

I'm not entirely convinced that there is too much social mobility in the US, however much that we are told that there is. This little graphic from the NY Times has some interesting data on the topic.

Clearly there is mobility within class/economic structure, however the way I interpret what people think about "class mobility" within the US is that anyone can get from the bottom of the economic ladder to the top. Unfortunately, only 2.5% of the bottom quintile made it into the top quintile over a 10 year peroid, while 52.5% of the top quintile stayed there.

I appreciate that the folks in the top quintile aren't exactly rushing out to give up their spot (I'm certainly not), but I think the average American thinks its much easier than 2.5%. The graphic has a tab with "A Nationwide Poll" with some data that shows Americans think its alot easier to get to the top than it actually is.

The Evolution of Risk

Just for the record, I'm going to write a book called "The Evolution of Risk" about how our brains are poorly wired to deal with today's financial products' risk/return information. I've been reading quite a bit about both the brain and the history of risk/finance and it's clear there one drives the other. My hypothesis is that our essentially caveman brains, which are designed for short term rewards, don't do a great job processing information regarding long term finances and their associated risks.

There is clearly some nature/nurture argument going one here, as I would imagine that if you're brought up in a "financially savvy" environment (whatever that is) you have a better understanding of the landscape. Needs a little research.

Forecasting is hard..

Just need to track this...ECRI says no way to double dip recession here. For the record, I'm betting on a double dip recession: bad back to school sales followed by bad Christmas sales. But I also said we'd get to 10.5% unemployment, and we're not there yet.

Beating the system

One thing I dislike is paying for hardback books when I know that if I just wait 6 months it'll be in paperback and much cheaper. My options are either suck it up and spend the $25 or wait, right? Well, when you're on the road internationally you realize that they release a significant number of books in paperback overseas much sooner than they do in the states. For example, Nassim Taleb's "The Black Swan." In the US, still in hardback at ~$25, overseas it's available in paperback for much less.

Of course, the best part of this is that I had a few Swedish Kronors left in my pocket in the airport, and I happened to see it on the shelf. PLUS - while I'm not sure about the total economics of the book publishing industry, I have a good sense that Mr. Taleb isn't getting 100% of the profits that he is off of the US version, and I think that somehow the insignificant profit he's losing on my sale will convince him to release his future books in the US in paperback much sooner. I do have to give him credit in that when he finally did release "Fooled by Randomness" in paperback in the US, there was an additional chapter or two.

Managers

One piece of advice for new managers - don't lie to your staff about things they can easily verify. If I ask you if its raining and you say "Yes" and I look out the window and the sun is out, you just look like a moron. Perhaps you don't understand what I mean by "rain", or you're just an idiot.

The Island of Misfit Toys, pt 1

The last consulting firm I worked for, which will remain nameless, was a quite an odd place. It is/was populated by some very intelligent people, many of whom should never ever be put in front of an actual client. Many of whom had never been in front of a client for that matter. I just want to record a few memories about the place.

My favorite memory is when I was asked to create a training guide for an application I knew nothing about and had never used. As a consultant, this isn't really a roadblock. So I wrote a 50 page guide, and printed it out double sided for review from my boss. He and I sat down at a desk, and he put his hand on the document and flicked thru the document like it was a deck of cards. Then he said,"This isn't what I had in mind." Of course, he didn't tell me what he had in mind, he just said to create the training guide.

Fortunately I had some experience working with clients, unlike my boss. So instead of working the whole night, I simply printed the exact same document, only this time single sided. I handed it to him the next day, and he said,"Perfect!" That document went up the chain of command as the final document.

Now, I'd heard jokes about professors grading papers via the stairs - throw all the documents down the stairs and the one that goes the farthest gets an A+, and work backwards up the stairs. When commercial organizations do this, it's a sign that the end isn't far away. That company's stock has lost 85% since this incident. This person is still working for that organization as far as I know.

And I also don't want to imply that I hand in shoddy work - however with poor requirements comes poor deliverables. And generally speaking I cannot read other peoples' minds, so if you don't tell me what you want and say,"I don't know, figure it out..." and I make some assumptions, don't act surprised.

UPDATE: Turns out, perhaps my old boss was just under the sway of a psychological bias about how weight changes our perception of things. I also recently saw a post about how some external hard drive makers put lead weights into their gizmos to make them feel heavier.

How to be a consultant, Part 2

So there are a few things they don't teach you in business school but should, including:

1. How to fix a copier: I guarantee that at some point in your career, you will be late to a meeting and in need of a few photocopies of your final deliverable, and the printer will be jammed. What you do next says a lot about you as a human being:
A. Cry
B. Yell at someone who isn't involved and not responsible (like the secretaries)
C. Fix the printer
The correct answer is C - Fix the printer. In today's day and age, all these copiers have diagnostics that say "open door C and move lever F to fix the jam". If you can't do this, please go back to being a liberal arts major at Starbucks.

2. How to properly use/fix a projector: Note to non-engineers, when you hear the projector go "pop!", it's because you unplugged it after a 4 hour meeting without letting the fan cool the bulb completely. Please pay $250 for the new bulb, and go work for a mechanic for a week.

3. How to fix a laptop: Often when laptops die, it's not the hard drive. When in doubt, pull the hard drive out of the dead machine and put it in a similar computer. Does the machine start? If so, it wasn't the hard drive. Stick the hard drive from the good laptop in the bad machine. Does it start? If so, it's probably the hard drive. Backup often.

I once worked for a "brand name" consulting firm (a different brand name than my current brand name firm) and submitted a tuition receipt for a week's class in photocopy repair because the one copier on the floor was constantly broken, and I was constantly fixing it. I didn't get to take the class, and the powers-that-be didn't find it funny. In hindsight, I imagine the copier repairman made more money from that company than me and had a higher quality of life.

How to be a consultant, Part 1 (of many)

So you're a consultant, and you're on a conference call with your client and about 30 other people. Do you:
a) Put your cell phone next to the speaker phone (ever wonder what the beeping sound is?)
b) talk to your neighbor about sports during the conference call (know what full duplex is?)
c) mute your phone

The correct answer is C - mute your g*d d*mn phone moron. If this is a difficult choice, you must charge much higher rates than me.

Fool me once...

Let me just say that Divine Mint Dark Chocolate from Whole Foods isn't worth the money. $2.50 for some really bad chocolate. I would have been better served getting a Snicker's bar. Now, perhaps my taste buds have been warped by eating too much American junk food, but this bar just tasted bad. No dark chocolate taste and the "mint" really smelled like a chemical.

Of course, I did eat the whole thing but that's just because I didn't want it to go to waste. And I didn't have any other chocolate in the house. I can quit anytime, no really...

Planes, Trains, and Automobiles

Just back from a trip to Stockholm and Dresden. When I was in Italy, I asked myself where my career when wrong because I didn't own a villa on a lake in the mountains. Now I ask myself where I went wrong by not moving to Stockholm when I was 18. Stockholm is the land of the midnight sun and the natural blonde. Plus - not a single obese person in sight. I was the fattest person around and I'm basically 15 lbs overweight at 6'4" (and therefore not spherical like lots of americans).

In Stockholm we stayed at the Hotel Rival (www.rival.se). I cannot recommend this place highly enough. The room was great, the location was great (near a T-banna), the staff spoke perfect english and had great recommendations for dinner. Plus - the Swedish premier of "Bruno" happened in the hotel's cinema while we were there.

Dresden was much more recovered than I thought, the "Old Town" seems to be relatively up to speed, however there was clearly a few more buildings being built up.

More on this later. Right now I need to figure out exactly what happened to US Airways flight 972 from PHI to ARL.

The Economics of Deceased Cats

My cat died the other day. Instead of dealing with my grief, let's look at the economics of putting your pet down at home. Considering I spent roughly $800 on tests to figure out what was wrong with my animal, this seems like a bargain:

Home visit: $95
After hours charge: $20
Injections: $90
Transport: $30
Private cremation: $150
Total: $385

When I spoke to the doctor, she was very clear about all the costs, which was good. However, I would have paid her $500 to come and put my animal out of its misery and not blinked an eye. The doctor was very professional for what I imagine to be an emotionally wrentching job. I cannot imagine trying to retain my professional demeanor when a 6' 4" 250 lbs. man is crying like a school girl over an 8 lb. cat.

The really odd was picking up the ashes at the crematorium. They give you a bag to bring your pet home in with the name of the service on it. What am I supposed to do with this bag after I bring my cat's ashes home? Is anyone going to bring their lunch to work in a bag that says "XYZ Pet Cremation Services" on it?

CFA Level 1, June 2009

I sat for the CFA Level 1 for the second time a few weeks ago. While I was significantly more prepared for it this time than last time, it was still difficult. And, frankly, if I don't pass this time, I wasn't meant to pass. I'm unwilling to invest another 400+ hours studying for this test when in the long run it's not going to change my life. If I was 25, it'd be a different story, but I'm not.

That said, the real question is if I pass Level 1, do I sit for Level 2? Its another 400+ hours of stuyding, followed by another 300+ hours of studying for Level 3. If I could just find a school where I can apply my MBA and MA in Econ for credit towards a PhD, I'd do that.

Finally, anyone who can pass this has certainly mastered the material. Not that that means they are experienced and intellectually well rounded, but they did put in a herculean effort to pass the tests.

Let's get going!

Since the wifey is going to start blogging, I guess I should start posting things as well. Let's see what happens.