If you own a Samsung 4G/LTE MiFi, you may, like me, be fed up with resetting the device because your Macbook or PC loses it’s ability to communicate with it. I think I’ve solved that problem.
To solve it, I do two things:
Since I’ve done this, the device no longer times out while I’m writing a long email and forces me to reset it manually.
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This is the first draft of text that I need to write for both a technical (academic PhD) audience and lay people. The two versions will substantially diverge, but I’m going to use this draft to get feedback from both sides. If you’re reading it, it’s probably because I’ve solicited feedback from you.
What is Nassim Taleb talking about in his books, especially Fooled by Randomness?
Nassim was one of the first people to write about and internalize into a stock-picking regime that returns from stock and bond picking follow a random process. The title of Nassim’s first book is indicative of the format — it contains stories and reflections about people (academics, professionals, etc.) that are fooled into believing that they are doing something better than returns that would be generated by a random process.
Daniel Kahnamen’s new book, Thinking Fast and Slow, also discusses this topic in detail. Kahnamen’s Nobel Prize and early books, such as this, discuss ways that we fool ourselves into believing that we have a system or approach that is better than a random process would produce over time.
You’re Not Alone in Being Fooled
This concept is so difficult to grasp that graduate students, faculty at Ivy academic institutions, and even Nobel Prize winners, such as Milton Friedman (insert link to the 1948 example) routinely make big embarrassing mistakes about this. One of the reasons that you study as a graduate student is to train yourself to stop making these mistakes (it is still difficult, especially if your faculty don’t know and understand the problem).
Why do we believe that stock returns follow a process that approximates a random process?
If you examine 1500 stock pickers and examine their returns against indexed benchmarks, the returns generated by the pickers follow a normal distribution. This does not imply that all stock pickers have equal performance. It implies that some pickers will do better than others some times. Much better. We will expect to see cases where a stock picker beats the benchmark for 25 years in a row. Every random process has some probability that someone will do the equivalent of flipping heads 25 times in a row. And, when you get enough people doing something, you are bound to have this event occur.
What is the implication for my investing (especially retail investing)?
First, it is extremely unlikely that your performance will exceed the mean over time unless you are engaged in arbitrage and you don’t realize it. One type of arbitrage (that is also illegal) is insider-trading. In this type of arbitrage, the two markets are the current market and the future market. You know the future market price (because of inside information) and you profit from capitalizing upon the known imbalance between the current market price and the future market price.
Second, high frequency traders and market makers are engaged in arbitrage, and they are always fighting against you. These systems know the future price because they are both examining data across a broader range of activities faster than you are and they are dedicated to this activity day in and day out such that they develop statistical histories that represent successful strategies. These two implications together imply that if you are not engaged in arbitrage, it is extremely difficult to beat random performance. (Remember, beating random performance does not imply that you won’t be able to beat the market average once, or twice, or even 20 times in a row! It implies that real returns will probably be distributed normally, at best. Before costs and fees. I can play slots for 5 minutes and win $20. If I don’t walk away, I have to expect that the house will eventually take the money back. Plus more.)
Third, if you are developing an arbitrage scheme, i.e. a plan for picking stocks or bonds better than a random process, I hope you have a risk management plan for handling what happens when the market assumptions that enable your arbitrage process disappear. This is what professional investors are supposed to be doing. They find an arbitrage process that works for some period of time (such as an irrational pricing of Italian bonds that allows profits), they make money from it, and then they need to be ready to move on when that opportunity disappears. When they are not ready, you get massive losses like we’ve seen with Long Term Capital Management, the housing crisis, etc.
If you’re sitting in a house in Ithaca, NY with no furniture or cooking supplies and you’re thinking: “I would really like to cook some Piggery Pork perfectly, but I don’t have the supplies to do it.” This post is for you.
I have a WeatherDirect.com weather station and sensors in my house. This system cost me about $50 and it measures the outside temperature of the house, the inside temperature, plus the temperature from a single waterproof probe. It displays these temperatures on the weather station and it uploads them to weatherdirect.com so that I can analyze them. People use these systems to track the temperature of their house, their refrigerator, their pool, their hot tub, etc. when they are out of town.
Now, if I want to cook a pork chop, I know that all I need is a Ziploc bag and a cooking vessel that can store water (hopefully without a large change in temperature). Since I took my fancy kitchen thermometers with me to Bellevue, I can use the WeatherDirect’s waterproof probe to approximate my more sophisticated gear to produce great meals that look like this.
The process is basically the same. Keep the pork at about 135 degrees for about an hour. The Weatherdirect probe will tell you the temperature of the water. You just need to keep it around 135 degrees for about an hour. Plus or minus 5 degrees doesn’t really matter.
Cheers!
CMU Study Shows Nothing, Press Comments on It -
This article caught my eye because it talked about the power of defaults, which I believe in. It didn’t wander into the weeds until it talked about research at CMU which had researchers measuring whether users could protect their browsing privacy. Except the measurement method is invalid. The researchers created a definition to stop online behavioral tracking that isn’t effective and then measured whether users could implement their crazy definition.
There is no current technology effective at stopping online behavioral tracking. Measuring whether users can tweak settings in a browser to stop online behavioral tracking is like measuring whether consumers can stop foreclosure fraud by fully reading their mortgage note before signing it. The action and reaction have little, if anything, to do with each other.
One of the questions that smart people ask me when they learn that I won a 2008 Forbes investing contest with only a few trades is: “How did you know that oil prices would decline in July 2008?” The answer is that I did not know, but the fundamental data seemed to indicate an improbable growth in productivity, and I bet against the veracity of the data.
I’ve been wearing Wrightsock Double Layer Coolmesh socks for at least 10 years, and I had a great customer service experience with them, so I thought I would relay it.
Recently, the company changed from Coolmesh to Coolmesh II, which has a different mix of fibers. The original Coolmesh were prone to developing holes in the external layer of the sock due to wear. While the holes didn’t substantially change the sock’s performance, they were unsightly. The new Coolmesh II is less prone to developing holes in the external layer — I know this because I’ve been wearing them for 5 months and not a single sock has developed a hole (compared to a higher loss rate for Coolmesh).
However, the Coolmesh II’s new mix of fibers have a different problem — they shrink more when dried at medium heat in the dryer. The shrinkage causes irritation on my ankle because, in my recommended size, the socks shrink just enough that they ride lower on my ankle and allow my trail running shoes to cause abrasions on the skin.
Now, when I looked into this problem, I found out that I wasn’t supposed to be drying any of the socks in a dryer. I missed that on the care label. But, even if I had seen it, I’m not certain I would have paid any attention to it.
Given the problem, I wrote to Wrightsock and they told me to stop drying the socks. However, they were nice enough to send me new Coolmesh II socks to replace the ones that I had shrunk. I thought that was really nice of them, and that’s the reason they’re getting this great review. But, since I’m also a scientist and I have a large enough collection of socks to form a good sample, I took the socks and immediately began experimenting.
I separated the new socks into two experimental groups. Group 1 is washed but not dried in the dryer. Group 2 is washed identically but dried in the dryer. I then measured the distance from the floor to the top of the sock after I had pulled it on. I happened to be doing laundry and I wash cycled the socks a total of 5 times. The mean shrinkage on the dried socks is approximately 4 mm after 5 cycles. The mean shrinkage on the undried socks is a little more than a 1 mm but this may be measurement error.
Cheers.
Octave is a useful, free resource and can sometimes beat Matlab for prototyping machine learning solutions to estimate their effectiveness. It’s good to see Andrew Ng pushing it for his open Stanford machine learning course.
The official documentation is here. Some useful tutorials on Octave include 1 and 2.
On Saturday, I received mail from Bank of America notifying me that I was overdrawn on a checking account and if I failed to take immediate action they would destroy my credit rating and make it impossible for me to open a bank account at another financial institution for five years. Since I always enjoy my interactions with Bank of America, I visited my new home bank in Kirkland, WA this morning.
Basically, I learned the following:
I don’t think I really have much else to say. I have on-going relationships with many banks and BofA is by far the worst at everything. I keep my relationship with them because they have branches in cities that I do business, including Ithaca. First Tech Federal Credit Union is by far the most personal. But PNC is by far the most competent.
My mail / news reader produced a collection and summary of 40 different articles about Netflix’s imminent implosion. I don’t care about whether Netflix will Blockbuster itself sooner rather than later. But I do care about the customer experience.
When are people going to learn? -
Web tracking is pervasive and technically more sophisticated than cookies. “Research” in the scientific community is only 13 years behind previously published industry knowledge.
A link for programmers that has some relation to my work ... -
I need a resting place for this link.
I’m in the market for a climate monitoring system. Rather than leave all of these tabs open in my browser, I’ll copy the URLs here.
http://avtech.com/Products/Temperature_Monitors/TemPageR_3E.htm
http://www.ambientweather.com/latx60uset.html
http://www.protectedhome.com/documents/TX60UIT%20Manual.pdf
http://www.controlproductsonline.com/internet-temp-alarm-temperature-humidity-sensor-p-145-l-en.html
http://www.temperaturealert.com/Remote-Temperature/Temperature-Alert-WiFi-Sensor.aspx
Facebook doesn’t care about the Like buttons you don’t click. They care about receiving an HTTP GET request at their server for every web page you view so that they can collect the IP address (and potentially the Facebook cookie info) so that they can build a profile of each user’s browsing habits and resell that data to industry or build products around it.
“If it hadn’t occurred to you yet that Facebook cares far more about the “Like” buttons that you don’t click than about the ones that you do — there you go.”
Social Security is a life annuity or regular-payment annuity in the United States. It is an earned benefit from years of substantial contributions. Your estimated return on your payments to Social Security is just under the initial payment value, adjusted for inflation (using inflation estimated by the CPI).
As a life annuity, Social Security performs comparably with many annuity products offered by private life insurance companies. It performs better than some products and worse than others.