Archive for July, 2010

An “easy” way to reduce your mortgage

Monday, July 26th, 2010

I found this “easy” way to reduce your mortgage on the Sound Mind Investing blog (subscription required).

(click for the video if you don’t see it)

Bear Market Killing Level of Fear

Friday, July 16th, 2010

That title is hard to parse.  He means a Bear-Market-Killing level of fear.  The amount of fear needed to kill a bear market.  As a rather contrary individual, I find it delightful that mass consensus of doom and gloom is a strong indication that the mass consensus is dead wrong.

The following excerpt is from my favorite investing blog (membership required, but lots of information is also available for free).  The added emphasis is mine.

SMI Weblog: Bear alert? Bah humbug.
The Hays methodology is to closely monitor three main market components — Psychology, Monetary, and Valuation. The “health” of these three components, measured by numerous indicators for each, is boiled down to a score of 1-6, with 1 being the best and 6 the worst. The interplay of these three scores gives them an idea of how attractive the market is at any given time, and by extension, how committed their clients’ assets should be to the stock market.

On Friday, Dodson wrote that their psychology composite had hit P1 last week, which is their most bullish reading. Here’s his comment:

“P1s are extremely rare. A P1 is bear market killing level of fear. Looking at our monthly tabulations of sentiment, a P1 has only occurred a couple of times since 1990: in October 2002 and October-December 2008. Both are on the who’s who list of market bottoms. For October 2002, it marked the ultimate low. In October 2008, it marked the market’s internal low and good entry point, but you really had to sweat it out until the ultimate market low in March 2009. That we have been able to hit P1 after a correction of 16% is astonishing. Investors sit on pins and needles.”

So, a “bear market killing level of fear” is a good thing!

Interestingness Filter

Friday, July 16th, 2010

Tim Harford is an economist in England.  He writes serious (and interesting) essays on economics, and a rather tongue-in-cheek advice column called Dear Economist.

This article, When it comes to research, we live in interesting times, make some really interesting points about popular science sources, and about more serious systematic reviews.  It’s a short article and worth clicking through.

The bottom line is that, for most of us, the information we have access to has already been filtered multiple times, with biases for availability, popularity, political correctness, and most of all, interestingness.

Quite apart from the fact that nobody wants to read all the evidence, there is a deep problem with the way evidence is selected throughout academia. Even a studiously impartial literature review will be biased towards published results. Many findings are never published because they just aren’t very intriguing. Alas, boring or disappointing evidence is still evidence. It is dangerous to discard it, but let’s not blame Malcolm Gladwell just because he doesn’t stick it on page one.

There’s a hierarchy of evidence here. The systemic review tries to track down unpublished research as well as what makes it into the journals. A less careful review will often be biased towards results that are interesting. A peer-reviewed article presents a single result, while a popular social-science book will highlight a series of results that tell a tale. The final selection mechanism is the reader, who will half-remember some findings and forget the rest.

Those of us who tell ourselves we are curious about the world are actually swimming in “evidence” that has been filtered again and again in favour of interestingness. It’s a heady and perhaps toxic brew, but we shouldn’t blame popularisers alone for our choice to dive in.

Flowchart Helps You Decide What Cereal to Eat

Thursday, July 15th, 2010

I found this while reading up on how to achieve lifelong happiness.

Flowchart Helps You Decide What Cereal to Eat(I got Grape Nuts – what did you get?)

What kind of cereal should I eat?

How to Achieve Lifelong Happiness

Thursday, July 15th, 2010

It’s easy.  See:

flowchart to lifelong happiness


Says Who?

Friday, July 9th, 2010

Seth Godin talks about how easy it is to manipulate “Top” lists in Payola.

The New York Times bestseller list is even more easily manipulated than Billboard ever was. It doesn’t cost much to scam it and it’s pretty straightforward to buy your way onto the list (I know authors who have done this and consultants who sell this service.) You can hire a bunch of old ladies who will go into the ‘right’ stores and buy books on the right day. As a result of this distortion, the books on the list get more promoted, and thus sell more copies. It’s not pretty but it’s true. The Times is well aware that this is going on, that the list isn’t accurate, but they persist in publishing lists that are demonstrably wrong. (I still find this amazing, but it’s true).

There are firms dedicated to manipulating social networks and a whole industry dedicated to manipulating search engine results (Search Engine Optimization, or SEO.)

While the increasing torrent of information today makes “Best Of” and “Top N” sources more important than ever, they are all subject to manipulation to some degree.  Be skeptical.

Not too long ago, I was reading news at Yahoo.  The default view shows headlines grouped under “most recommeneded” and “most emailed”as well as several other categories of “Top”.  At one point, the actual number of recommendations or emails comprising “most” was available.  I was shocked to see that my viewing choices were seeded by three people.


And they probably all knew each other.

Best 4th of July Ever

Monday, July 5th, 2010

Late yesterday evening, July 4, a summer squall moved over town and dropped the biggest, loudest, most dramatic load of hail I have ever seen.  We dropped what we were doing and just watched with much running about, shouting, and laughter — mostly when I attempted to retrieve the first huge hailstone and was rewarded with an impressive welt on the shoulder. (like, what did I expect, anyway – certainly not sympathy!)  We left the car in the driveway, and I felt compelled to cover the hood with a blanket.   This time I had a jacket over my head, but I guess it slipped and I got beaned on my bald head.  Hail goes “DIIIIIIING”, if you ever wondered.

Levi summed it up best; “This was the best Fourth of July EVER!”

Here are a couple of pictures for scale:


And here are a couple for scope:


I’m amazed at these little guys.  We were still marveling about the  storm when the hummingbirds returned.  This little guy drank like he was starving. He probably was – I’m sure they all had to hide out with no food for at least 10 minutes.



I just read on NOAA that they broke out the snowplows to clear the road.  In July!

Severe thunderstorms dumped quarter size hail in Woodland Park (20 miles northwest of Colorado Springs). There were reports of marble-size hail 4 inches deep just north of Woodland Park. Several vehicles slid off the roadway due to the hail and sustained minor damage. Snow plows were used to remove the hail from the road. Lightning struck a transformer in Woodland Park, causing a brief power outage.