Jan

31

Big Dams

January 31, 2022 | Leave a Comment

Big Dams and Other Dreams: The Six Companies Story tells the story of the 6 companies that banded together to build the Hoover Dam, Golden Gate Bridge, Bay Bridge, Bonneville Dam and other icons of the west. the Hoover Dam was completed for $30 million in 1934. the six companies were Morrison Knudsen, Shea Company, Pacific Bridge, Kaiser, and Bechtel. compare this to the union costs today espoused by Psaki in describing why Tesla wasn't in press conference on electric cars.

estimated cost of Hoover Dam today is 10 billion. perks and carve outs add to costs. Frank Crowe was a hero.

Vic's twitter feed

Jan

31

Given the recent music discussions on the list, I thought I would share a few things. First, I spent much of last year (as a pianist) digging into Bach. Over the past few months, I've been playing a lot of Chopin, and reading contemporary accounts of his teaching and playing–always trying to understand this music more like the composer himself might have.

I recently recorded this famous Nocturne. It's not a difficult piece by any means, but is a gorgeous aria for piano. (There's a little bit of sparkle at the end that often captures amateur performances off guard!) My performance of this piece isn't flawless, but I hope you enjoy it!

This piece also has some famous tie-ins with yesterday's Holocaust Remembrance Day which you can read about in the wiki.

Also, I'll be doing 100 days of composition, and sharing some of the progress daily. This is primarily a tool for myself to create some accountability, as I've been inexcusably lazy on the creative front over the past year. I invite you to follow along here. I'll update that post and probably share some snippets of work as I produce them. I've never done a project like this publicly, so I don't quite know what to expect–it may be a complete flop, but let's see what happens.

Vic replies:

very good and relevant post thank you

James Lackey responds:

Yea man awesome. So what’s the musical that beats describes this week? We had more dipsy than doodle weak close big up open ground hog days. My deal if trading I’d be so exhausted I’d be flat by lunch and not look at those screens again til Sunday night. I can only imagine how costly that was to Mr Vic and my bank balances years ago.

Stefan Jovanovich offers:

Sviatoslav Richter - Chopin - Etudes

Adam Grimes responds:

I absolutely love Richter's playing. His Bach was one of the biggest reasons I became a musician…as a kid, I was transfixed by some of his Bach recordings.

Jan

30

tom was able to enjoy life while he could and that is how I would like to live my life, taking it as it comes and enjoying it while i can, not worrying about the bad outcomes which might follow. that is one of the more important themes in this book, to live and make life the best as possible while you can and it will sooner or later pay off. I think that throughout the book, when Mark Twain mad Tom's childhood sound like so much fun it inspired me to grow and have as much fun in my childhood as Tom did in his. so i guess when I say that I most admire Tom Sawyer, you could also say that I admire Mark Twain and most of all, my father. (tom's father read the book to him since he was five. his father had a special way of reading it to tom that made the book so much better. he would use different voices for every character, change all the hard words to easy words so that they would fit in to the flow of the book, and he would elaborate on each scene to tell him the time when each particular incident happened to him.)

the only timeless advice Bernard Baruch got rite — in talking to Wiswell in 1929 he said, "Even in times of great unemployment people will need inexpensive forms of recreation and entertainment." Baruch was called the central park philosopher because he sat on a bench in CP. Based in part on that advice Wiswell and Grover opened two chess and checker clubs on eighth avenue and sixth avenue. Wiswell quit his job as a clerk at Chemical Bank and opened the clubs. (From the unpublished book Maxims, Mysteries and Memories.)

These reminiscences of Tom were inspired by the brilliant article in the Atlantic on Marion Tinsley.

Vic's twitter feed

Jan

30

Penny Lane on Loving and Loathing Kenny G

Love it or hate it, but you've definitely heard it: the so-called "smooth jazz" of saxophonist Kenny G. Filmmaker Penny Lane talks about her documentary, Listening to Kenny G, with EconTalk host Russ Roberts. They discuss the pursuit of perfection, the power of vulnerability in art, and why Kenny G is loved by the people and reviled by the critics.

Here is the trailer for the documentary.

Jeff Watson comments:

If I was forced to listen to Kenny G, I would welcome an increase in the rate of my deafness, in fact deafness would be my safe space.

Zubin Al Genubi writes:

In contrast to Kenny G I've really been into John Coltrane. Took a number of years to truly appreciate his music.

Adam Grimes adds:

I absolutely loathe smooth jazz and New Age music (Einaudi, et. al.). I'm not completely sure why, but I've always had a very strong visceral reaction to music like this. And I DO embrace a lot of simplicity and minimalism… so it's not that… Perhaps it's music that is obviously intended to be trivial.

James Lackey writes:

Well joy! Who loves listening to the same key trillion not low tech music? Kenny G blah blah blah. Charlie Parker on a 50s Miles album. If the ever frustrates me is because I can’t play it. Branford Marcellus probably the best ripper sax ever but whatever. Some may think taking pop tunes re sketch them into EDM is silly or lazy. It’s not hard but it’s hard to do and who wants women to dance anyways.

The point was Kenny G hit a note and held it then. Did not hit a note a rest then hit a note on same scale coming from and angle and your eyebrows raised. Damn!

And guys the emotional response to music rests rhythmic beats to each his own. Like the markets please remember the scientific evidence. Down 20% is always going to be emotional. The first 10, I’m not sure if any of us should lift a brow.

Jeffrey Hirsch writes:

I get into some of that old jazz from time to time. But I am a rocker at heart. Recent highlights:

Grateful Dead in Honolulu Jan 23, 1970, with Pig Pen and an extended Turn On Your Lovelight. It's on Dicks Picks.

Little Feat - Electric Lycanthrope – recent release of a live studio performance in 1974

Laurel Kenner responds:

I'm with Adam — I hate the phony sentimentalism/exhibitionism.

Antonio Porres Miranda suggests:

I end up always defaulting to what ever has to do with Antonio Carlos Jobim.

Laurel Kenner approves:

Jobim is impeccable — good choice!

Vic offers:

i always and continuously listen to Verdi. every aria is a perfect blend of instrumental music and singing. each aria is designed to please. and he's very innovative in his orchestration, sometimes 7 basses, other times 4 clarinets. beautiful augmentation of life for me, heartily recommend it.

Maria Callas - Early Verdi arias

Jan

30

Chess is like looking out over a vast open ocean; checkers is like looking into a bottomless well.
- Marion Tinsley

Marion Franklin Tinsley (February 3, 1927 – April 3, 1995) was an American mathematician and checkers player. He is considered to be the greatest checkers player who ever lived. Tinsley was world champion 1955–1958 and 1975–1991 and never lost a world championship match, and lost only seven games (two of them to the Chinook computer program) from 1950 until his death in 1995. He withdrew from championship play during the years 1958–1975, relinquishing the title during that time. It was said that Tinsley was "to checkers what Leonardo da Vinci was to science, what Michelangelo was to art and what Beethoven was to music."

in honor of Marion Tinsley and the game of checkers, I pulled out yet another book of proverbs of Tom Wiswell, who is the Marion Tinsley of problems: the book is called Maxims, Mysteries, and Memories. It so far is unpublished but it will live on.

Here are some new Wiswell proverbs that are good for markets: "don't try to be brilliant, just try to survive." I think I succeeded. "there is never an end to the fine endings in checkers; like old man river, they just keep rolling along." and Tom's favorite: "Moves that disturb your position the least, disturb your opponent the most."

"Defeat is what happens to you while you are making other plans." Wiswell from Maxims with proposed associate editor and shout out to Susan Niederhoffer. have you tested that — from Wiswell: "Checkers seems to guarantee a long life - it is the board of health." Tom writing about Larry Evans and Sammy Reshevsky.

I repeat: checkers moves are very close to all the logic moves that go into the circuitry of computers for truth tables and arithmetic calculations. as such it is the best training for a youngster.

Vic's twitter feed

Laurence Glazier offers:

How Checkers Was Solved
The story of a duel between two men, one who dies, and the nature of the quest to build artificial intelligence

Zubin Al Genubi writes:

Sometimes when I trade I like to think I see signs of computer trading…such as multiple players running the same algo and doing something stupid. Probably just hubris on my part. In the old days I would like to think "now here is a bunch of retail guys calling their broker" and the broker sloppily entering orders, or some big fund in trouble and exiting a big holding like Worldcom. The tape talks. Why can't a computer figure it out. Its just a problem of size and bandwidth.

Big Al suggests:

The Man Who Solved the Market: How Jim Simons Launched the Quant Revolution

Jan

24

1) Search results for "Grantham" on CNBC
2) of the 118 results , the below 7 more caught my attention
3) assuming a hypothetical 1k USD investment on those 7 occasions

Jeffrey Hirsch comments:

Nicely done Kora. Perhaps it’s just a marketing campaign. Fear sells you know.

Duncan Coker responds:

Consider the source. Grantham's contrarian flagship fund GBMFX total return since 2003 when it launched is 30.5% ( that's total not annual compounded) and that included 2 bear markets. SPY over the same period 488%.

Andy Aiken writes:

Back in the late 90s, I had a few $ in David Tice's Prudent Bear Fund, which was, essentially, short stocks and long PMs. Entered in 1999, got out in 2002 at a very small gain. Gold & silver dropped along with other risk assets during that time, killing returns. If I'm going to short, I'll do it myself now…

Jan

24

Stefan Jovanovich offers:

The mania for sudden fortunes made in cotton, raging in a vast population of Jews and Yankees scattered throughout this whole country, and in this town almost exceeding the numbers of the regular residents, has to an alarming extent corrupted and demoralized the army. Every colonel, captain, or quartermaster is in secret partnership with some operator in cotton; every soldier dreams of adding a bale of cotton to his monthly pay. I had no conception of the extent of this evil until I came and saw for myself. Besides, the resources of the rebels are inordinately increased from this source. Plenty of cotton is brought in from beyond our lines, especially by the agency of Jewish traders, who pay for it ostensibly in Treasury notes, but really in gold. What I would propose is that no private purchaser of cotton shall be allowed in any part of the occupied region. Let quartermasters buy the article at a fixed price, say twenty or twenty-five cents per pound, and forward it by army transportation to proper centers, say Helena, Memphis, or Cincinnati, to be sold at public auction on Government account. Let the sales take place on regular fixed days, so that all parties desirous of buying can be sure when to be present.

- Charles Dana's recommendation to the Secretary of War, 1863

Jeff Watson responds:

Sounds like sour grapes from Mr Dana, almost like he was having problems with his hidden cotton partner and since he didn’t find easy money, nobody else should either.

Stefan Jovanovich replies:

Score by WS. But, according to his memoir, Dana was no more secretive about his partnership with Conkling than anyone else in D.C. He asked Halleck for letters of introduction to the generals not named Grant. He omitted Grant because he already had the reputation of being incorruptible.

How the Story Ends:

On March 31, 1863, Mr. Lincoln issued a proclamation declaring unlawful all commercial intercourse with the States in insurrection, except when carried on according to the regulations prescribed by the Secretary of the Treasury. These regulations Mr. Chase prepared at once. At the same time that Mr. Lincoln issued his proclamation, Mr. Stanton issued an order forbidding officers and all members of the army to have anything to do with the trade.

Or does not end:

Diary of Gideon Welles: Saturday, May 21, 1864

Last night I was at a party at Mr. Chase's, or his daughter Mrs. Sprague’s, and late in the evening he spoke to me of the great abuses in cotton speculations. It was a new and singular theme for him, and I said it could not be otherwise than demoralizing. He said, “Yes, your whole fleet out West is infected; Porter devotes his attention to getting cotton and has a boat to himself, with a piano and his pipe, on these cotton raids.” I replied this could not be so. The naval men could capture and retain nothing, which the courts do not adjudge to be (a) good prize. We were interrupted at this point. I conclude the Committee on Commerce have notified Chase that they disapprove of his “Trade Regulations,” and this outburst on the Navy is to turn off attention from his officials. But we shall see.

Lieutenant-Commander S. L. Phelps has been with me this evening and given me many interesting details concerning the Red River expedition and the incompetency of General Banks. Among other matters he relates some facts in regard to cotton speculations by persons connected with General Banks — some of his staff — that are exceedingly discreditable. Among others whom he specially mentions is one Clark from Auburn, New York, who appears to be managing director of the cotton operations.

Jan

23

does anyone doubt that the camp kinderland people at the Fed and Treasury will help along the smiling capitalist before the midterm elections?

with all the talk about rising interest rates, the bonds ended up abut a point last week form 15500 to 15600. S&P was down on the week the second most since 1999 at 307 full points.

he doesn't know the territory. bonds going up while stocks at tremendous low on fears of interest rate increases. the woke fed due on wed to help smiling capitalist along. the treasury emphasizing how woe begone we are.

the camp kinderland head of the treasury "our economy has never worked fairly for anyone of color". race to the bottom.

Vic's twitter feed

Jan

23

i had the pleasure and education of reading Prof. John Hearn's site. i strongly recommend it.

Prof. Hearn on Twitter

Prof. Hearn on Youtube

Vic's twitter feed

Jan

19

I’ve reviewed elaborate videos and glossy books on shipping container homes at the high scale end. It’s far simpler for cheap. I’ve lived in two containers in different valleys and it’s as easy as going to the bread aisle at the grocery store.

You go to the vendor – around the Salton Sea it’s the Calpatria hay store or trucking companies near the border. You pick out a used one from the lot, fork over $1-2000 that includes transportation, and lead the flatbed with your new home out to your place. The driver slides it onto pre-laid RR ties, you put a lock on the door, and celebrate the new home.

The biggest advantages are it’s difficult to rob, arson, or blow over like in the Three Little Pigs, and without building codes since it’s on skids.

I had no idea on moving into my first container in 1999 on the Sonora that I was looking into the architectural future. I installed a loft with waterbed, office with a solar powered laptop, and garage beneath a trap door. Chilled air rose from the garage through stovepipes into the interior and vented hot air out the roof. A satellite dish pulled in the Nature and History channels on an upside-down B&W TV. A pet packrat was a muse and road partner in search of gold in abandoned mining camps that it had been trained to retrieve. We drove two hours to sub-teach when mining was poor.

Then, in 2013, I owned the first container home in Slab City and am as content as a clam. There are three more now, the nearest scavenged and dragged from a bombing range target and riddled with hundreds of high-caliber holes. The second was towed from the Mexican border and is hemmed with painted flowers. And, the third was trucked from Los Angeles and converted into a church.

I thought I was on the vanguard of a would craze that is verified.

In the South Africa capital of Johannesburg, thousands of brightly colored boxes piled on and around each other, are stacked and re-stacked, and hauled away on trucks and freight trains, as homeowners decide where they want to live or sell. In Sudan, a prison is built of old containers slammed together. That’s how secure they are. Now container architecture is a hip fad in European cities for offices and homes. London has one of the biggest housing projects in the world of containers, and Amsterdam has the largest student village with over 1000 containers.

In USSR, shipping containers are used for market stalls and warehouses. Southeast Asia bazars are typically double-stacked containers. New Zealand earthquake rocked malls were rebuilt of shipping containers in the business districts. A Tokyo company provides container modules for multi architectural use. Prefab container homes are bomb across China. Google barges ply the seven seas with superstructures of stacked containers.

Shipping containers were invented in the USA in 1953 when trucking businessman Malcolm McLean gave a lot of thought when, frustrated by the glacial pace of overnight freight transport on the American highway system, he fashioned a set of stackable aluminum boxes and outfitted a decommissioned tanker ship to shuttle boxes of cargo up-and-down the eastern seaboard. In the next two decades, it spread over the oceans to other continents to radically change the face of global shipping. No longer does cargo have to be loaded and unloaded by a cadre of dock workers. Suddenly, the major cost of getting consumer goods around the world efficiently dissolved, and with it, many millions of boxes have been built and shipped, trucked, and trained, and now lived in.

Today, at any given moment, there are about 20 million more bobbing across the ocean or sitting in ports around the world. Union Pacific trains slide them three miles from my Conex home, and hobos know that a ride on a container train is a cannonball to any destination.

The sky is the limit. I think shipping containers will advance to fill into our architectural dreams for city projects, apartments, condos, hotels, and single housing units. Shipping containers are legal homes in California and elsewhere. They are cheap, built like a tank, fit the Golden Ratio, fast to construct, without codes, with high resale value, and can be moved as your heart pleases.

Alex Castaldo comments:

I have never lived in a container, but I would not recommend it. They lack the natural insulation properties of a wood or brick home, so they are chilly in winter and hot in summer. There is also the problem of no windows….

Larry Williams responds:

They work well here in the usvi where folks put 2-3 together for L or U shaped home.

Henry Gifford expands:

A steel box leaks almost no air unless doors and windows are installed in a sloppy way.

In rare cases, a building's heating and cooling loads are actually calculated before equipment is chosen. The job involves lots of measuring, and some simple math in the case of heating, and some fancier calculations for cooling loads.

Having calculated the heating and cooling loads of each room in many buildings over the years, I have found that very roughly half the peak and annual heating loads for a building are attributable to cold outdoor air leaking through the building, about one fourth is heat transmitted (conducted and radiated) out the walls and roof, with the other one fourth going out the closed windows. This is a rough generalization, but about equally true for old, poorly insulated buildings and new, very well insulated and airtightened buildings.

So, the lack of air leaking through a shipping container goes a long way toward comfort - it eliminates maybe half the heating load. And without the usual chemical soup of construction materials (glues, sealants, caulk, paint) in a normal house, the need for ventilation for health is reduced to a smaller amount. As few houses, old or new, are ventilated (few people open windows, as they also admit cold air, hot air, humidity, insects, rain, snow, and criminals), reducing the need for ventilation is a nice thing.

One way to explain the leakiness of normal construction is to point out that a person can hold a concrete block to their mouth (or a piece of a block) and breath in and out at a rate sufficient to satisfy the needs of an adult. I don't recommend vigorous exercise while trying this, but the point is that normal, sturdy looking materials leak a surprisingly large amount of air. The leaking is worse at connections between materials, and even worse than that at connections between assemblies (walls to roof, etc.).

Cooling loads are much more complicated mathematically because of the effects of humidity on indoor comfort, and because a cooling load calculation has to account for solar gain into windows (usually the largest part of a cooling load for a house), internal gains of heat and humidity from cooking, lights, showering, breathing, etc. Numbers for heat and humidity output from a bowl of soup or a lab mouse can be looked up, and are useful for calculating the cooling load on a restaurant or a medical lab.

The total lack of windows, or lack of numerous large windows in a shipping container goes a long way to keeping a shipping container comfortable during the summer.

Bo Keely responds:

You make the mundane details of buildings interesting, and this more than usual. The only air leaks in my container are fork holes where they loaded it over the years. This brought the price down to my wallet. I choose to not plug them near the roof as they vent the air in the summer. Where there is air, there is sound. My almost hermetically sealed box is soundproof. Also, roaches and rats can't get in. These are things money can't buy in Manhattan. I've never been so content.

Jan

19

From Marketwatch.

As it turns out, during so-called rate-hike cycles, which we seem set to enter into as early as March, the market tends to perform strongly, not poorly.

In fact, during a Fed rate-hike cycle the average return for the Dow Jones Industrial Average DJIA is nearly 55%, that of the S&P 500 SPX is a gain of 62.9% and the Nasdaq Composite COMP has averaged a positive return of 102.7%, according to Dow Jones, using data going back to 1989 (see attached table). Fed interest rate cuts, perhaps unsurprisingly, also yield strong gains, with the Dow up 23%, the S&P 500 gaining 21% and the Nasdaq rising 32%, on average during a Fed rate hike cycle.

Penny Brown wonders:

Very surprising. I am wondering why there is a mantra: "don't fight the fed." And "three hikes and a stumble."

Vic adds:

not mentioned is that the average fed rate increase cycle lasts 5 years. there have only been 13 of them since the fed was founded in 1910. usually these is a run of 15 increases once they turn from red to black.

i believe that the fed will not raise until the S&P is much stronger. a very nice close today (18 Jan.)

Nils Poertner comments:

the more talk about rising rates (and neg impact on stocks) the better it is for stocks. to a point of course.

everything is taking to the extreme these days. said to my cousin "eating apples is good for health" - and he replied "eating 10 apples isn't." of course not, but for now it seems so wrt rates.

Paolo Pezzutti writes:

Over the next few days option expiration this month can be an issue for stocks in terms of volatility. Not rising rates in my humble view.

Jeffrey Hirsch agrees:

Performance during January’s option expiration week

Big Al writes:

The Fed has never been sitting on a balance sheet like this, along with the other major CB's. Plus, the aggregate amount of debt is quite high after all these years of ZIRP. This will not be a "normal" rate-hiking cycle.

Jan

19

a fairly unbiased and accurate review of a great book I read or listened to in my quest to duplicate Tyler Cowen's 2000 books in a year. bartelby the scrivener.

The Remains of the Day

Some of Tyler Cowen's book links:

Best non-fiction books of 2021

What I’ve been reading, December 28, 2021

What I’ve been reading, January 10, 2022

Vic's twitter feed

Jan

19

on occasion my opponent from the main stream or main line would try to kill me by hitting their shot with all their mite into the back of my head. this situation is comparable to the voting now.

it's time for my posterity to look back on my career. true, i had a glaring weakness or two, i sliced my backhand and i didn't volley enuf. however, i won 5 national singles and didn't play in 5 others when i would have won because of my ill-timed protest against prejudice.

however i won 3 nationals in a row in straight games holding my opponents to less than 10 pts a game and i was virtually undefeatable for 10 years from age 25 to 34 winning about 60 various major tournaments in a row. i wish i could do it over again but my problem was that i was so good that i didn't have to change and only beat Sharif 3 times out of 14 without adjusting or improving my game. in short, with all my defects, i was good.

the game is much better now than it was in my day. i was stiff after every tournament because i didn't train. i wish i had trained like Aubrey does for running. its amazing he's shooting for a 4 min. and 30 second mile. no one in my family can do under 8 minutes . my best is 8:30. i know.

yet these days the only way to get into an elite school with athletics if you're not diversity is to be a national jr. champ. you definitely have to be close to a 4 minute miler before they'll notice you especially if there's Asian pedigree somewhere.

Vic's twitter feed

Jan

16

like the stock market, the worse the news is, the better the stock market's future, especially relevant is the November 2022 elections. you don't have to be a savant to guess that all the powers of the fed along with the usual suspects will be attempting to build a higher S&P.

i once said that the army of fed people including the thousands they support with grants (used by 50% of all monetary economists) only worry about stock markets and now they leaven this with correct pronouns for which they get positive feedback from the universities. my point is that with all the bad news for Blues during past week, certainly a nadir, the chief capitalist Biden increases his odds of winning the presidency by 1%. imagine what he'll do coming around November with all the suspects from the masters 100 to the schools and swamp lined up.

as my learned brother says: "no way that interest rates will be against him come November." In my naive way, i agree with him that this is very bullish for crypto especially around the election.

[Admin: Learned brother Roy Niederhoffer interviewed about crypto and other issues.]

Steve Ellison responds:

Very insightful comments by the Chair's brother about how one might identify Fundamentals underlying cryptocurrency valuations.

Vic's twitter feed

Jan

14

nobody asked me but supreme court chief John Roberts always seems to compromise in decisions to keep face with the popular man and always votes in a way that furthers the Court. (I don't know anything about the law except that it doesn't function well)

nobody asked me but the nite moves in markets are ideally suited to prevent a person who needs sleep 4 hours a day to extricate good profitable positions that should be held with impunity.

nobody asked me but the new appointees of the new administration make me think of a G&S or Moliere play . Stay close to your desk and never go to sea and you may wind up a head of the Queen's navy, especially the DA's who refuse to arrest anyone.

Vic's twitter feed

Jan

14

Received a nice intro note from new spec Mr Ani Sachdev, and it elicits important advice I have for all specs. its not advanced calculus or Bayesian stats or higher. the most important is Finite Mathematics and Differential Equations.

my differential equations book is Differential Equations by Shepley Ross and my discrete math book is Discrete Mathematics with Combinatorics. both are highly recommend but they're both 20 years old. amazing how they've both held up.

Vic's twitter feed

Jan

12

Your vehicle sooner-or-later will get stuck in the sand. It happens to everyone who drives far enough off-pavement. There are many solutions. This best technique is from three decades of driving off-road in sedans and having unstuck them or others at least a hundred times.

I call it the LONG COME-ALONG. The only equipment you always carry is a $35 lightweight come-along and 70’ of strong rope. The beauty of this method is that washes of sand that you cross are lined with anchors of trees or creosotes no more than 70’ apart.

It goes like this. Your vehicle is stuck in the sand up to its hubs. You attach the rope to an anchor which is a tree or around the base of a creosote. You hook the come-along to the rope free end and its cable to the car. Now you rachet the car out without a sweat. I repeat, without the sweat of all other methods. Note that the come-along cable around its spindle is about 8’, so for every 8’ the car moves you must shorten the anchor rope and rewind the cable to inch the car out.

All other systems require a high jack, shovel, traction pads, water to wet the sand, air compressor, winch, or a helper vehicle.

A nifty option can inch you across the Sahara like an Egyptian. Carry your own pipe anchor and come-along. You will also need a heavy hammer to drive the 4’-pipe into the ground, plus a high-jack to jack it out and relocate it.

If you travel a regular route that has a sandy stretch, pound in a permanent deadman anchor at either side of the sand. 6’ fence posts 4’ into the ground work fine. This is how I used to go to and from town for many years on the other side of the Chocolate Mountains.

All the other methods I’ve heard of or tried are toilsome and may give you a heart attack in the summer. Of course, instead, you may pay a standard $750 for an off-road tow.

With the LONG COME-ALONG you may quickly extract others who will tip to cover your original cost of equipment. As usual, the less technical the environment the less technical the solutions to getting around.

Jan

10

a good elementary lesson on combining forecasts as we had. the norm seems to be to average them with equal weights:

Combining forecasts
J. Scott Armstrong
University of Pennsylvania, armstrong@wharton.upenn.edu

Vic's twitter feed

Jan

8

Nils Poertner recommends:

Amazing Grace: Autobiography of a Survivor, written by Grace Halloran

Inspirational book - and it is based on a true story - about a mother who managed to heal her child's eye condition (retina pigmentosa) - and her own one via the use of light (therapy). And this was against all odds.

We live in a world where medical doctor (also financial analysts btw) have all figured it out - it seems - yet life is more surprising at times. The incredible thing with miracles is that they happen….

Jan

8

Kora Reddy points us to courses offered by Aswath Damodaran:

My regular Stern classes start in a couple of weeks, with links below. You are welcome to follow along, for free and no credit:

Corp Finance

Valuation (MBA)

Valuation (UG)

Jan

3

More books

January 3, 2022 | Leave a Comment

books i have been reading or listening to that i recommend highly:

1. The Princeton Guide to Ecology

2. The Princeton Guide to Evolution

3. The Life And Times of Giuseppe Verdi

4. The Life and Times of Gilbert and Sullivan

5. The Life and Times of Johannes Brahms

6. Branch Rickey

7. 100 Statistical Tests

8. An Illustrated Guide to Theoretical Ecology

9. Mathematics in Action

10. Master and Commander

11. The Life and Operas of Verdi

12. The Long Ships

13. Americana

14. The Hunt for Red October

15. How Innovation Works

16. Life and Works of Mozart

17. every nite i listen again to The Time It Never Rained and Good Old Boys by Elmer Kelton (these keep me from brooding on all the mistakes I've made and put me to sleep)

Vic's twitter feed

Jan

2

A reader writes:

Time's Arrow by Martin Amis, is a novel which plays on topsy turvyness - everything being upside down, time is moving backwards, what is good is bad and vice versa. E.g, the pimp dishing out cash to the prostitute, doctors killing patients, and garbage men adding more trash into the bin.

In our hyper-rationale world- of cartesian thinking - those novels tease the reader and stretch imagination. Saw pics of overflowing trash bins in NYC - so at least one of the examples could be true today?

Laurence Glazier writes:

Thanks for the reference, I didn't know of this book. I have read some of his earlier, more frivolous books, and also some of his father's, Kingsley Amis. I love time-bending themes, but might find this one harrowing.

A reader adds:

inversion theme - also a link to mkts? novice trader: fundamentals first, then price action, whereas more seasoned trader can see the implicit -and more nuances, eg. house price stocks moved up in 2009, then housing boom in the US etc for yrs to come etc. or spiritually - one can find a few other things ….Castaneda /Gurdjieff - on topsy turvy ness of human perception.

Andrew Aiken writes:

Philip K.Dick’s novel, Counter-Clock World, was published in 1967. By a quirk of physics, time in this future is running backward. In this world, people disgorge whole food, greet with “Good-bye” and part with “Hello”, pregnancy ends with copulation, libraries busily eradicate books, and the dead come back to life in the world’s cemeteries. Because libraries control the availability of knowledge, they have absolute power. Even militaries and police are terrified of the libraries. A departed cult leader, whose following has continued to flourish after his death, comes back to life, with devastating implications.

Nils Poertner responds:

yeah, a number of authors of the previous centuries probably could not take it anymore with society's linear attending to the world and wrote books like these. Lewis Carroll's Through the Looking Glass is another one. some are more light hearted and fun to read than others. good for stimulation of novice traders.

Laurence Glazier comments:

Music is interesting here, as whatever I write is heard linearly, even though I sometimes create it as a non-linear fractal structure. It nonetheless works.

Wondering where the Gurdjieff Work comes in re Time’s Arrow? Phillip K Dick was certainly an extraordinary individual.

A reader responds:

Music is about vibration and energy - and more harmonious energy is good for us and vice versa. We constantly rec and send energy even if we don't think so. I'm not huge into Gurdjieff or Castaneda - only know a few bits about this topsy turvyness in perceptions and tend to concur. Would not interest others here perhaps anyway. Will have a look at Philip K Dick.

Penny Brown writes:

I loved Martin Amis's last "novel" - put it in quotes because it's more of a memoir - Inside Story which chronicles some of his early relationships and the death of his closest friend, Christopher Hitchens, and his literary father, Saul Bellow.

Laurel Kenner enthuses:

Androids DO Dream of Electric Sheep! Reading ALL Dick’s books.

Zubin Al Genubi writes:

I've read pretty much every Michael Connelly book.

Laurel Kenner adds:

I have read all of Michael Connelly, William Gibson, Alexander McCall Smith, John Grisham, John D. MacDonald, Walter Mosley, Eric Ambler, Martha Wells, Earl Derr Biggers, Robert Graves, Gene Wolfe, T.S. Eliot, George MacDonald, and Phillip K. Dick. I recommend Epictetus, Publius, Shelley, Keats, James Burnham, and Curtis Yarvin on Substack. Merry Christmas to all Specs.

Ashton Tate writes:

P.D. Ouspensky, a student of Gurdjieff wrote the novel, Strange Life of Ivan Osokin. It can relate to markets as the story tells of a man who meets a genie who is willing to grant him any wish. The man (Ivan Osokin) wishes to be able to go back in time and replay certain pivotal moments in his life with the caveat that when replaying these events he is aware of the things he did the first time in these instances so that he doesn't mess up again. The genie grants him his wish but assures him that even though he may know what not to do in replaying these scenarios, he will still make the same faulty decision anyways, to which he does, again and again. There is a rumor that this book was used as inspiration for the movie Groundhog Day.

Jeffery Rollert responds:

That idea came from Sartre, in Les Jeux Sont Fait (The Die/Dice Are Cast), and should be required reading by all.

Laurence Glazier adds:

Keith Pearson has written several light-hearted, but well-constructed novels on this theme.

Ouspensky believed in a theory of recurrence, in which lifetimes could be repeated. I don’t think that was connected to Gurdjieff’s teaching, though in Beelzebub’s Tales he suggests that themes in history repeat.

Penny Brown offers:

My greatest literary experience this year was listening to the 1862 classic, Oblomov, which came as a free addition in the Plus Catalogue (Audible). The narrator, Stephen Rudnicki, has a beautiful resonant voice and adds just the right amount of ironic inflection.

"Oblomovism" or "Oblomovshchina" is a term has made it into the vernacular as representing all the negative qualities of romantic inaction.

Kim Zussman replies:

Do you mean the qualities of an inactive lazy indolent being? The sentient women I have known would not consider such inambition very romantic.

Larry Williams adds:

Laurel did you read this one: A Friendship: The Letters of Dan Rowan and John D. MacDonald 1967-1974. Like you I read every novel he wrote.

Laurel Kenner replies:

Thanks for the tip, Larry. If you believe, as I do, that politics are not on a right-left spectrum but are more like an elliptical orbit with totalitarianism at the nadir and freedom at the apex, read Thomas Pynchon, With a salt shaker handy.

One additional recommendation: Louis-Vincent Gave published Avoiding the Punch in August, and I think it's the best book of the year. Chair and I had the pleasure of dining with him and his brilliant father, Charles, at the lamented Four Seasons restaurant and found them kindred spirits.

Some chapter titles:
The Asch experiment we inhabit
CYA, the guiding principle of our time
Fighting for relevance [central banks]
Who will survive the unfolding Marxist clash?
Are US treasuries set to fall from heaven?

Jan

2

thank you to all my correspondents, happy new year. let us hope that the same regularities, drift greet us next year. there seems to be no negative correlation between the S&P moves in one year and the next. in other words the 27% gain this year is not abnormally bearish.

on the two occasions that the S&P dropped a little on dec 31 during the last 10 years, it was bullish for all the relevant subsequent periods. however, on the 6 occasions where the S&P was up big over the preceding 5 months, it was bullish for Jan but there was one big decline that occurred around May that brought the expectation down big.

Vic's twitter feed

Jan

1

For those who haven't read it, here’s a pdf of Robert L. Bacon’s book, Secrets of Professional Turf Betting. The book provides a banquet for a lifetime.

But first, it must be understood that while it is possible for ANY man or woman to get started with a lonely deuce or sawbuck and run it up to a handsome amount, it is at the same time impossible for EVERY man or woman to make a living at the races.

The careless, the inconsistent, the people who must be "in action" every minute, the stabbers at the moon, the followers of free public selectors, the people who go to the races "just for fun", the players who are ignorant of the principle of winning, the people who do not keep up to date with all the new ideas and trends — all such people must lose. That is true because every cent of the purse money, the jockey fees, the track upkeep and amortization, the trainer's living, the plater owner's living — and the profits of the consistent bet winners — all must come out of the money lost by the careless and uninformed public.

Jan

1

Many of the richest in the country have 2nd homes here in Hawaii. Each year I count how many private jets come in as a gauge of the economy. The place is packed to overflow full of big new G5's with custom paint jobs. All is good as might be expected at new ATH's. No DC8's with restrictions on Saudi's with Covid.

The place is crawling with tourists and not just the usual grossly obese. This year the crowd is younger and more stylin' with the nice braids and cool leisure suits and headphones and thong bikinis.

SP 5000 next year?

Allen Gillespie writes:

The most applicable economic question for private jets and politics right now are the "Green New Deal" policies. Wall Street loves a free money subsidy. Fundamentally, the Greens seek to raise the price of energy to encourage substitution and conservation while subsidizing their donors. If you disagree you get locked up so you are forced to conserve. Obviously, this creates the paradox of Progressives following regressive economic policies and fascist political policies with a little mix of Cultural Revolution.

It has been well established that oil price "shocks" as defined by a 10% move above 3-year average have preceded 11 of 12 US Recessions by an average of about 5 months. This Bernanke paper suggests if the Fed reacts to the shock, then their actions will account for 2/3 of the damage - Powell indicated in Nov the central bank will be reacting.

In 2018, we had such a breakout and the yield curve later inverted by May with a curve shape indicating that Nov 2019 would be the peak, and the curve straightened out late April 2020.

We had another such energy breakout this October. The yield curve has not inverted this time but it has flattened but I think people are now substituting MEGA cap stocks for bonds which is why the largest of the large outperformed despite the dismal long-term track record of buying the largest companies.

Mid and Small Cap stocks made 60 day lows in December, which would be the minimum objective necessary to discount a recession. If a recession is defined as two consecutive quarters of negative GDP, and stocks lead by 3-6 months, then a 60 day low would represent the potential mid-point. I think the trade in 2022 would be long small and mid-cap name and short MEGA caps if they have been used as bond proxies once the recession is discounted. That trade may have started on The Almanac's January effect by date of the Dec options expiration.

Nature of recession - I believe 2022 will bring a inflationary growth recession. We are at the low point on the demographic U (peak Baby Boom 1957/1958 - low Gen-X birth year 1972/1973) (life cycle spending peak Age 50) - and millennials well into workforce. The exist of the Boomers and China production unreliability are driving up labor costs and goods costs likely in a structural way.

The Fed is reacting to the inflation data, but the 10-year realized inflation rate is 1.82% and the short-term numbers are much higher, so while they will move in the direction of tightening, at the end, we will likely still be left in a negative real interest rate environment. Once they blink, probably in late 2022 because of politics, crypto might have the biggest move yet unless Americans are able to completely roll the fascists.

Jan

1

From Human Error, by James Reason:

People often have an overwhelming tendency to verify generalisations rather than falsify them: this is a fundamental attribution error.

Whatever governs general proneness to everyday slips and lapses also appears to contribute to stress because certain styles of cognitive management can lead to both absent-mindedness and to the inappropriate matching of coping strategies to stressful situations.

Predictable potential for error is the inappropriate acceptance of readily available but irrelevant patterns.

Humans, if given a choice, would prefer to act as context-specific pattern recognizers rather than attempting to calculate or optimize.

Nils Poertner agrees:

so true. chess for kids = excellent - they learn to falsify a "winning path" by looking at all possible defenses of opponents. so many good projects now everywhere -eg St Louis Chess club for kids etc - also see Ben Finegold.

Duncan Coker offers:

Read an interesting book called Scatterbrain by Henning Beck. Humans makes tons of mistakes especially in repetitive, mundane tasks or difficult calculations. Computers do that way better. What the brain is quite good at is forming ideas based on connections, patterns, correlations, and intuition. We are also very good at adaptation and learning from mistakes. AI will be much better and grinding through terabytes of data. But human brains better at separating the wheat from the chaff and making sense of it all.

Archives

Resources & Links

Search