Dan on October 11th, 2014

Not that we need another reason to distrust our secret government agencies, but here is a great example of why we shouldn’t have unchecked power in the NSA.


According to this article, the former head of the NSA held investments in small hi tech companies that specialized in cloud and surveillance technology.  This action doesn’t even come close to being ethical – and that Obama himself signed a waiver  to try to hide this under the guise of ‘National Security’ should lead any citizen to wonder why we have this shadow instutition with no oversight.

Ars Technica has a great addendum to this  article , noting that this former head has now founded his own company which offers cyber security protection.  In the article a great quote from Representative Alan Grayson of Florida:

Disclosing or misusing classified information for profit is, as Mr. Alexander well knows, a felony. I question how Mr. Alexander can provide any of the services he is offering unless he discloses or misuses classified information, including extremely sensitive sources and methods. Without the classified information that he acquired in his former position, he literally would have nothing to offer to you

Well put.  How many other examples of misuse of unchecked power exists in the US Governments intelligence organization?

Dan on October 9th, 2014

The new version of windows is out, and surprisingly Microsoft skipped a number and instead of naming it Windows 9 its Windows 10.

The reason?  As per this ars technica article

Terry Myerson, executive vice president for the Operating System Group, said that the new release represented such a shift in Microsoft’s approach to delivering Windows and in what Windows will be—able to span everything from an Internet-of-Things gizmo to a phone to a tablet to a PC to a server—that calling it Windows 9 wouldn’t be big enough to capture the differences.

Hmm.   Windows 10 looks a lot like Windows 7 to me – maybe they are just trying to distance themselves further from Windows 8.  But I think the real reason was more technical than marketing.   This article exposes the real answer based on a dev post on reddit.   Apparently Microsoft is aware that Microsoft and lots of third party code have compatibility checks that check which version you are running, and Windows 9 would cause huge problems.   The example snippet:


I think Microsoft did the right thing here – I have no doubt there is a bunch of code in use with this logic – and this would have wreaked havoc on people upgrading old applications to Windows 9.  I think they really dodged a disaster – kudos to the technical guys who convinced Microsoft to skip Windows 9.  I only think Microsoft should of been more forthcoming and spared us the BS.

I must admit however, that I would of enjoyed if the marketing department settled on Windows X instead – following the Apple roman numeral convention. Because they probably would of then run into likely compatibility checks for Windows XP…


Dan on October 4th, 2014

The rise in college costs over the last few decades have been significant. Tuition here in Washington used to be in the low $200 range in the 1970′s, now in tens of thousands of dollars.  Many theories exist out there regarding the cause  of all that – but it looks from this animated chart that it is simply supply and demand.






For the full animated gif see http://imgur.com/5b8cOXJ

I wasn’t aware how many more people have 4 year college degrees now than in 1970.  But why the great increase in demand?  d av Perhaps its increased globalization of the workforce, perhaps the increase in technology, or something else.

I assumed the ease of getting student loans factored into this, but if you figure that there was much less demand in the middle of the 20th century, when the cost was low, that doesn’t seem to make economic sense.   Unless the rise of student loan money has led to schools lowering their admissions requirements, to soak up all that student loan money.

Many articles have been written about the impact of this debt on the economy of the future impact of this debt on the economy, one has to wonder if loading all these young adults with a huge debt load is the best use of our economic capital.  And is there a huge economic benefit to cranking out these 4 year degrees?  Maybe so.   It will be interesting to see the long term impact of this demographic shift.

Dan on September 26th, 2014

In this age of proxy wars and alliances, India appears to be gaining attention from both the east and west. This article quoting the Chinese media appears to indicate that China is wooing India, and the west is hoping that India will join the US Japan partnership leaning against China.

Meanwhile, India has a new prime minister, Narendra Modi, who recently visited Japan and this week is visiting the US.  The US seems to be rolling out the red carpet for him, starting with a CEO packed breakfast and a sold out Madison Square Garden appearance.

Interesting, Modi spent time in the US in the late 1990′s to spread his Hindu-Nationalist message.  And Modi is still a member of the RSS, which, according to Wikipedia, is a right wing, Hindu nationalist, para-military organization with a history of anti-Muslim violence.

So I would think India would be leaning towards the US, especially given the US Governments latest war on Muslim terrorists.  If this happens, I would think China would have a reaction, so this is definitely something worth watching.

Dan on September 20th, 2014

Doug Short at Advisor Persectives has an interesting look at historical inflation here:


The one chart that caught my eye was this one on inflation since 1872:



Inflation since 1972


What caught my eye was how prevalent inflation was prior to 1940.  Also curious to notice that during the roaring 20′s there was no inflation.  During the 30′s there was a large bout of deflation, but it is arguable that deflation was a result of the great depression, not the cause.

I am not arguing that America should abandon the effort to foil deflation – unfortunately the biggest losers to deflation are those that carry debt.  Deflation magnifies debt – and given the state of public and private debt deflation could result in disaster.  So lets be clear – the rarely stated reason goverments  around the world are so aggressively fighting deflation is because of the huge public and private debt in our economies.  And the only realistic path to reducing that debt must be inflation.

Dan on September 6th, 2014

Recently I stumbled upon an artcle discussing the most popular programming languages  based on a ranking at http://www.sitepoint.com/best-programming-language-learn-2014/

Below is the best chart from this article

(Click on image to open in separate window)

It’s interesting to see the fragmentation of programming languages.   Granted a number of these languages listed are niche languages, but I wonder if this portends a more rapid turnover of languages.  My guess is in the 80′s COBOL would of been near the top of the list, and now it doesn’t even appear (which I think is an aberration due to the methodology of this chart.  My guess is COBOL developers don’t use  the internet to ask questions much, and don’t post projects on GitHub).  In the 90′s I would of guessed Visual Basic would of spiked, and its already on the downward slide.

A few other observations:

  1.  SmallTalk, which was the darling object oriented ‘niche language’ of the 90′s, is now overshadowed by others.
  2.  Why is XML included as a language, whereas HTML, XAML and JSON are missing?  Arguably they are all on the edge of a programming language vs a formatting language.
  3. Arduino shows up in the top half of language representing the robotics programmers.  My guess is a big player like Google or Microsoft will have a standardized robotics language  that will win out for robotics and the Internet of Things.
  4. If I had the time and energy, a few of the languages I would be curious to dabble in would be Go, Erlang, and Typescript, as these languages have some interesting approaches to doing things.  I have also heard interesting things about Ruby.   The problem is, the older I get the harder it is to bend my mind around the new ways of thinking some of these languages require.
  5. If I was young and thinking of a programming career (which there are surprisingly few people doing) – I would start dabbling in Python and JavaScript.   These would be good gateway languages to the enterprise languages such as C# and Java.  Short term there is a lot of money to be made writing phone apps in objective C, but personally I think a different language will be the language of choice in the future for mobile devices.

The old adage in programming is you can’t learn everything, so you have to pick your areas of expertise and hope your right.  As  this chart shows, in the 21st century these choices get harder and harder.


Dan on August 30th, 2014

Robert Shiller, who has a pretty accurate gauge of stock market valuation (The CAPE model), came out recently reiterating how the market appears overvalued.

In this New York Times article, he details how the market is at its highest level, matching levels not seen since 1929, 2000 and 2007.

The problem is, predicting the stock high is trying to determine how high is up.  Yes the market may be overvalued, but until it turns you never know how close  the top is.  So it could run alot higher.  Notice from the CAPE chart below that we appear to be way below the irrational exuberant highs of 2000:


The current CAPE is around 25 – it was at this level in 1996 and 2005,  so indeed we could have a few more years before valuation reverts to the norm.  But this is like a game of musical chairs, whereas when the music stops and people rush to get out, you wont want to be left standing alone.   And given the Fed is still making asset purchases as part of the economic recover from the last big market correction in 2008, if the fall happens anytime soon, it could be a bad one.

Dan on August 20th, 2014

While poking around the internet trying to make sense of what is going on in Ukraine and why Russia is so interested in it, I now have something that at least makes sense.  An interesting place to start is this South Stream pipeline that Russia is building in partnership with several western European countries (and apparently no US companies).


Reading thru this article,  I came across this graphic:

(Click to enlarge)

The terminus where the pipeline leaves Russia is at Beregovaya, but upstream from that the only access is via eastern Ukraine.  If an unfriendly Ukraine shut down that portion of the pipeline, there is no backup route.  So that seems like a decent motive for Russia to maintain a presence in eastern Ukraine.

Of late the pro-Russian separatists have reportedly been losing ground, though the pipeline area still seems to be in the area of pro-Russian control.  The pipeline isnt set to be operational til 2015,  so maybe this battle for control will be going on for awhile.

Dan on August 15th, 2014

A friend asked me the other day my opinion on the Amazon vs Hachette controversy, and I responded that  I hadn’t given it much thought.  However, that spurred me to do a little thinking on the topic, and it let me to a conclusion that I think both sides are wrong.

Apparently the argument between Amazon and Hachette is that Amazon wants to fix the price of e-books at $9.99, and Hachette is resisting.  I think Amazon is wrong in getting involved in any pricing of vendor products –  but its interesting to think about their motivation.  Hachette is clearly worried about e-books being significantly cheaper than print books – because one has to wonder – is there a purpose for a middleman publisher in the e-book space?  What value does Hachette bring to the author for an e-book?  It seems to me Hachette needs to keep print books a significant market share in order to attract authors to use print publishers.  Therefor, they have incentive to sacrifice e-book sales by keeping the price higher to push people to print books.

So is Amazon seeing thru this by saying – OK fine – you can’t sell any books through our channel – making it harder to sell print books and thus making authors less interested in partnering with a publisher.

Even if Amazon loses this and relents, I think the publishers will lose in the long run.  Lets say the de-facto standard for a Hachette e-book is $16.99,  Amazon takes their 30% cut, and Hachette takes their 30%(?)  cut, that leaves the author with $7 a sale.  Wouldn’t an established author just not renew his contract with Hachette, and sell the e-book for $16.99, and pocket $11 a sale.  And then for people that want printed copies of the book the author can use Print on Demand.   (Amazon has already set up a company to do this – https://www.createspace.com/).

So to sum it up – I think this argument is flawed on two sides – Amazon thinking that Hachette raising the price of e-books will slow the growth of e-books, and Hachette thinking demanding a premium for e-books will keep established authors in their camp.

Dan on August 13th, 2014

Every once in a while luck turns out to be better than wisdom in investing.  My most recent example of dumb luck in investing was Canadian Pacific Railway, an stock position  It took back in June 2011.   My decision to buy the stock primarily based on the thesis that oil prices would be ramping up as the Chinese and other emerging markets started demanding more oil.   The assumption was that as energy prices go up, more goods would be shipped by train than by truck.

My thesis turned out to be wrong, there was no oil shock, and the discovery of additional oil fields and fracking let to an increase in domestic oil production.   As luck would have it, the domestic oil production increase was in North Dakota – in Canadian Pacific’s backyard, leading to a large increase in oil by rail for Canadian Pacific.  The other piece of luck was an activist investor group tried to grab control of the company, leading to a big proxy fight and led to a runup in the stock (Interestingly, that also led to the only time I have ever been called at home asking for my vote in a proxy vote for a stock – I don’t even know how they got my phone number).

To be fair to myself, the other reason I bought Canadian Pacific was the yield was over 2% at the time, and the dividend appeared safe, so it was a conservative bet.

Last month I sold out of my position because I didn’t really know why I still owned it, except for the reason was it keeps going up.  The valuation wasn’t great, and the dividend yield is now down under 1%.    So I decided it was time to get out.  I could be wrong, but I can’t depend only on luck when investing in the stock market.