Wednesday, June 27, 2007

Fund Creator

The New Yorker reports that hedge funds charge more in fees than the value they add :
“It is possible to design mechanical futures-trading strategies which generate returns with the same, and often better, risk-return properties as hedge funds,” [Kat] said. “This means investors can have hedge-fund returns but without the massive fees and all the other drawbacks that come with the real thing.”
What you need to replicate this : a highly trained British trader-turned-academic and a graduate student in finance trained in computer programming. And Voila! You can create or replicate as many hedge funds as you wish, with no fees to boot.
"If you are really convinced that you can find those super managers, then don’t waste your time with our stuff. Go look for them. But if you are a bit more realistic, if you know that eighty per cent of hedge-fund managers aren’t worth the fees they charge, then the rational thing to do is to give up trying to find a super manager, and just go for a good, efficient diversifier instead."

Monday, June 25, 2007

Does watching TV make us happy?

... individuals with incomplete control over, and foresight into, their own behavior watch more TV than they consider optimal for themselves and their well-being is lower than what could be achieved.
-- Recent paper from the Journal of Economic Psychology, Vol 28, Issue 3, June 2007

Saturday, June 23, 2007

Remembering and forgetting

At least under clinical conditions,
sometimes we're more likely to remember words that we were instructed to forget, while being more likely to forget words that we were instructed to remember. How can this be?
Thus begins the interesting Remembering can lead to forgetting, recent research reported by the British Psychological Society from the Quarterly Journal of Experimental Psychology.

Convergence and Divergence.

Excerpt from an post predicting the imminent failure of the iPhone:
In the high-tech world, divergence devices have been spectacular successes. But convergence devices, for the most part, have been spectacular failures.

The first MP3 players (the Diamond Rio, for example) were flash-memory units capable of holding only 20 or 30 songs. The first iPod, on the other hand, had a hard drive and could hold thousands of songs. Now there were two types of MP3 players, a classic example of divergence at work.

The first computer was a mainframe computer, followed by the minicomputer, the desktop computer, the laptop computer, the handheld computer, the server and other specialty computers. The computer didn't converge with another device. It diverged.

When the cellphone was first introduced, it was called a "car phone" because it was too big and heavy to lug around. You might have thought it would eventually converge with the automobile. It did not. Instead it diverged and today we have many types of cellphones.

... a host of other divergence devices that have been enormously successful: the digital camera, the plasma TV, the wireless e-mail device, the personal video recorder, the GPS navigation device.

And an entertaining defense of the Apple Phone:
As comedian Ricky Gervais recently put it in one of his stand-up routines, we don't need to be able to take a piss in the washing machine because we've already got toilets. Yet, every time I pack my iPod, phone, BlackBerry and laptop into my travel bag, along with all their various chargers, I find myself wishing I had one mobile device. Call me irrational, but I'm willing to believe the iPhone might be the one.

Monday, June 18, 2007

The best vs. Doing your Best

Question from the author of The Dip:
"if you accomplish that, will you be seen by your audience as the best in the world, or will you be seen as doing your best?"

If you're doing your best, only your AYSO soccer coach cares. If you're the best in the world, the market cares. The secret, if you have limited resources (don't we all) is to make 'world' small enough that you can actually accomplish that.

Wednesday, June 13, 2007

Soldier's low pay

Insightful excerpts from a recent blog post:
The compensating wage for bearing risk varies, obviously, with the risk, and the risk in turn depends on efforts that are and will be made to minimize the risk, including body armor, rescue, medical treatment, and so forth. Knowing that one's fellow soldiers do not just abandon one when the cost of rescue would be disproportionate to any tactical value of the rescue reduces the wage that a volunteer army has to pay to attract soldiers of the quality it wants. ...

Persons who join the military to obtain or exercise technical skills have civilian alternatives, so the military has to compete with civilian employers for the services of such persons. But if you want to be a combat soldier, there is only one possible employer (if you are an American) and that is the U.S. government. So the government can pay a low wage to persons desiring that employment--in fact it seems that it can pay a lower wage than it does to its military technicians (adjusting for the value of the technical training that the latter receive) even though the latter are less exposed to combat risks.

Tuesday, June 05, 2007

Big Brother -- real time monitoring of gunshots

Excerpts from a funding report:
When a gun goes off, wireless sensors spread throughout a neighborhood register the instant the sound wave reaches them, using GPS to pinpoint the moment to within 20 nanoseconds. The sensors then transmit the timing data to a server within the police department’s control. This server makes the calculations necessary to triangulate the source of the sound and, within 5-10 seconds of the shot being fired, specially-equipped police cars on patrol get both the precise origin of the shot and a playback of its audio signature, allowing the officers to determine how many shots were fired and make a tactical decision from there.

The technology ... is deployed in neighborhoods throughout 15 American cities, including Chicago, Los Angeles, Oakland, and DC.