jplewicke
Joined 17 years ago
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Member since
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Recent submissions
Comment · 8 years ago
Someone actually tried to follow this advice starting in September 2007: https://www.bogleheads.org/forum/viewtopic.php?t=5934 . Needless to say, it did not work out well for them and they almost went bankrupt due to spiraling margin debt.
The difference between a mortgage and margin debt is that mortgages aren't constantly marked to market, and you can continue to own the house even if you're temporarily underwater on the mortgage. Whereas with margin, you can be forced to sell if the value of the assets you've bought underperforms.
Comment · 9 years ago
It's actually completely normal for a small group of stocks to account for most of the index gains -- see https://www.aqr.com/cliffs-perspective/still-not-crazy-after... .
Comment · 10 years ago
I think that there's a common thread that underlies the development of intelligence in both humans and Portia spiders. We both evolved in an environment where we were at a sensory and physical disadvantage to our prey. We both relied more on understanding the behavior of our prey in order to hunt. In the case of early humans, we adopted a style of hunting known as persistence hunting.
Persistence hunting ( https://en.wikipedia.org/wiki/Persistence_hunting )is a general hunting strategy in which a hunter chases their prey over a very long distance(15-30 miles). Eventually the prey becomes weak and succumbs to exhaustion. On its own, that's not very special -- both dogs and hyenas adopt a very similar hunting strategy. The key difference is that humans lack the extremely sensitive sensory abilities that are used by other persistence hunters.
In the absence of such senses, early hominids had to predict where prey would go and accurately pursue them over very long distances based on very small amounts of visual evidence. In short, early hominids hunted by simulating the minds of their prey. If you look at https://www.youtube.com/watch?v=826HMLoiE_o (a documentary on persistence hunting), you can watch some Kudu tribesmen literally simulating where an antelope will go.
It certainly seems to me like lucking into an evolutionary niche where you get caloric benefits that are directly linked to how well you can simulate the fairly-complicated minds of your prey is pretty much a recipe for extreme selective pressure in favor of general intelligence. The story is a little different in the case of Portia, given that they are apparently at a visual advantage to their prey. However, I think the examples mentioned in the article make a strong case that Portia's comparative hunting advantage is in planning the best attack method based on the behavior of a given type of prey.
Comment · 11 years ago
One of the better proposals to fix whatever market structure issues we have is to move to "frequent batch auctions", in which a micro-auction would occur every 30 seconds or minute, which would amount to a similar thing. I'm not aware of any research that discusses whether such a system would be workable in the presence of the existing continuous trading market.
Comment · 11 years ago
That chart understates the cumulative return of McDonalds by 20%, since it is just a graph of price appreciation and does not include the effect of reinvesting dividends. The proper cumulative return for McDonalds over that time period is actually 64.7%, assuming reinvestment of dividends.
Comment · 12 years ago
I found this book helpful: The HIPAA Roadmap for Business Associates ( http://www.amazon.com/gp/product/1484067010/ref=oh_aui_searc... ). It goes through some of the basics of HIPAA, what kinds of policies you need to have and why, and includes some example policy templates similar to the ones being graciously provided in this article.
Comment · 12 years ago
Saying that we're due for another pandemic is quite simply the gambler's fallacy: http://en.wikipedia.org/wiki/Gambler's_fallacy . The odds of a pandemic may well be higher than recent experience would indicate, but pandemics still occur randomly.
Comment · 12 years ago
They don't -- they are re-emitted in random directions that are statistically related to the original direction: http://en.wikipedia.org/wiki/Scattering .
Comment · 12 years ago
The article doesn't get much better, but there may be a kernel of truth to the rug store angle. There's a profile of the rug store owner/prolific angel investor at http://www.forbes.com/sites/victoriabarret/2012/03/21/silico... .
Comment · 12 years ago
On the other hand, there's a very good reason why HFT liquidity has evaporated in previous crashes (such as the 2010 Flash Crash) -- the exchanges broke trades in an unpredictable fashion, so that any attempt at market-making would have opened the market maker to considerable risk.
Let's say you step in during a major market crash and buy AAPL when it's trading at $200/share. Let say it then rises some more to $300/share and you sell, only to see the price recover to $500/share. What happens if the exchange breaks your original buy at $200? Then you end up being short on the way from $300 up to $500, even though you were right about the direction of trading and contributed liquidity during market distress.
They've theoretically instituted a fix for this ( http://en.wikipedia.org/wiki/2010_Flash_Crash#Trading_curb ) which will make it clear in advance what trades will be broken, so we'll have to see how HFT and market making responds in the next crash. Bid-ask spreads tend to widen significantly during market distress, which should actually increase the profitability of being a market maker during a crash.
Comment · 12 years ago
Luckily, it looks like Mr. Money Mustache is already in touch with Ken from Popehat: http://www.mrmoneymustache.com/2014/03/11/mmm-receives-legal... .
Comment · 13 years ago
I don't have a dog in this fight, but Ripple Labs did set things up so they would start off with all the network currency, and still own the majority of it: http://en.wikipedia.org/wiki/Ripple_(payment_protocol)#XRP .
Comment · 13 years ago
Ripple is actually a generalized network flow problem, in which the flow through an edge can be multiplied by an exchange rate when converting between currencies. As a result, regular network flow algorithms don't apply. There's also another issue with using a minimum cost criterion, since the costs are in different currencies and it's not clear how to put them on the same footing.
Comment · 13 years ago
It's still necessary to consider the total number of shares. Let's say you've been issued 500,000 options with a $0.10 strike price, and the company is currently valued at $4 million. The approximate pretax value of exercising your options immediately would be:
~ $2,000,000 if they've only issued 500,000 shares ~ $100,000 if they've issued 13,000,000 shares ~ $2,000 if they've issued 40,000,000 shares.
And your returns would be negative for any greater number of shares.
The real problem is that you don't know the price per share from the current valuation.
Comment · 13 years ago
On the face of it, this is quite clearly illegal discrimination on the basis of the prospective employee's country of origin: http://www.justice.gov/crt/legalinfo/natorigin.htm
If you're from Brazil and have work authorization to work in the US, any employment lawyer would be very excited to hear from you. The company responsible is quite likely liable for substantial fines, not to mention the principle of the matter.
Trying hard not to become obsolete.
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