Winslett's

College Football Athletics: The Case for Unionization

2011-04-14T21:25:00.002-05:00

Balance of Power

In college football, the only remaining amateur participant is the athlete. All other parties receive healthy compensations: coaches, administrators, TV deals, conference commissioners, athletic support staff, college presidents. The best interest for everyone, except the athlete, is a maintenance of status-quo. The other parties are compensated only due to the risk and choices assumed by the student athlete.

The students have the least power: their image is sold, their bodies are used, and their time is required.

Anti-Trust: Cannot Play NFL until 3 Years After High School

For three years of a players life, end of high school to NFL eligibility, universities in the United States are a football monopoly. College football is the only opportunity for advancement for student athletes -- it is the path. It is essentially required for student athletes to put their bodies at risk for sub-par compensation.

If the NFL allowed students to enter the NFL draft out of high school, this anti-trust question would be insignificant. However, the 3-year rule appears to be a back-room handshake among college administrators and the NFL. Colleges receive cash flows from the athletics for 3 years, and the NFL can mitigate the risk of paying a high school senior millions of dollars.

The Only Way Out of Current Predicament

What are the moral obligations universities have to their most productive revenue streams:

Athletes receive nominal compensation compared to the athletic revenue: $100 million in revenue for the the top institutions, and their athlete compensation is negligible.
Athletes in marketable sports are spending massive amounts of time chasing an opportunity to show themselves worthy to play professional sports: practice, weight lifting, practice, training. These activities do not often translate into employable skills in other disciplines.
Body damage: concussions and other injuries. What is the long-term cost of a concussion? What about future income lost because of a concussion? What about quality of life? Given more information on concussions, do institutions have obligations to protect the student for the long term?

Largely, I believe unions are detrimental to industries. However, when the balance of power between employers and employees are as skewed as college athletics: a strong athletic union is the only way to restore the balance and fairly compensate all parties.

SendGrid Pricing

2011-02-22T05:54:00.000-06:00

We use SendGrid to send thousands of E-mails per day, and they make it easy. Our bill has steadily increased. Our question, was: "Given SendGrid's pricing, when do we need to upgrade?" By the way, SendGrid does have a simple calculator on their "Product Pricing" page. The table below should help you answer that question.

	$ / Month	# of Credits	Marginal $	Breakeven Point
Basic	9.95	10000	0.00100	170000
Silver	79.95	50000	0.00075	430000
Gold	199.95	100000	0.00050	500000
Platinum	399.95	500000	0.00045

You are Beautiful Birmingham

2010-12-26T09:54:00.004-06:00

Birmingham Metro must change the focus from ME to WE. Fragmented geopolitical segmentation of the Birmingham Metropolitan (Metro) will continue to produce squabble. History of the area guarantees this is the most likely outcome. The basis of the separation is a lack of trust: centuries of dishonesty between races and political factions created barriers more real than municipal lines. Birmingham Metro is composed of varying entities representing a balance of power, which is proven to fail all parties. We should build a larger ideal; we are on the same team; we are Birmingham; you are Birmingham.

Birmingham city is not competing against Hoover. Mountain Brook is not competing against Vestavia. Hoover is not competing against Birmingham city. Consider the Southeastern Conference: teams share half of their bowl payouts with the conference. The conference collectively bargains for TV viewing rights. The SEC separates their competition on the field as being the product, and the cooperation off the field as their livelihood. It is in Alabama’s best interest to have a strong Auburn (and vis-à-vis). It is in Birmingham’s best interest to have a strong Hoover. It is in Mountain Brook’s best interest to have a strong Birmingham. Our competition is Nashville, Atlanta, Indy, and Austin, not each other.

In a Leadership and Creativity class lead by the late Dr. Paul Preston at Montevallo, we performed an exercise on negotiation and cooperation: in groups of two, we were told to negotiate with counterparty for the best price on oranges. Our primary goal was for the best price, but hidden within our instructions were our needs: one needed the juice and the other needed the rind. The counterparties could only discover potential cooperation with discussion and showing their cards. Elements of vulnerability were required for the greatest outcome. Of the 20 counterparty pairs, only one group found the differing needs – therefore, the best outcome is elusive, requires vulnerability, and creativity.

In Birmingham, the “third rail” is education. It will provide the power for change, yet will be divisive. I consider each school system in Birmingham to be a private system. My reasoning: school performance is directly associated with per-capita income from the surrounding tax base. Instead of directly paying tuition, individuals purchase land within the tax base, then pay the tuition (i.e. property tax), or create a education foundation (which should be dissolved). I know the caveats around my thought: each system has decided their emphasis and allocation of resources. It remains: people with children purchase land associated with school systems; the land represents a share in a school system just as a shareholder purchases shares in corporation.

Whether you agree with my Private School Theory, you have to agree it is in each municipality’s best interest to have smarter people in neighboring areas. Certain areas of Birmingham have core competencies in education. Certain areas have created vicious cycles. For business, for the future, it is in each person’s best interest to have better education systems. Mountain Brook, Hoover, and Vestavia need to exploit their core competencies in education and bring up the City system. The City system needs to understand its misallocation of resources, and accept guidance from those better at performing the task.

Because each city in Birmingham has the right to manage resources differently, we can think of them as different economies. Each city has differing cash flows, similar to countries. Birmingham is a net importer: it pays for experienced human resources to come into the city. Mountain Brooke and Vestavia are net exporters: they provide experienced human resources to other areas. Viewing cash flows this way, the Birmingham occupational tax is a tariff on importing human resources. Birmingham has to import because its school system is deficient. Yet, the core competency for Birmingham city is business.

Each part of Metro Birmingham has a core competency, which if explored like juice and rind would make the whole work better. It will take vulnerability, creativity, and breaking down the history of mistrust. You are Birmingham.

We need to begin building our educational, business, and government infrastructure to ensure we are on par in the future.

Reading Excel files using JRuby and Apache POI

2010-11-18T15:16:00.001-06:00

In the code below, I am reading Microsoft Excel files using JRuby and the Apache POI library. You will need the following, which you can get from http://apache.org/:

commons-logging-1.1.jar
dom4j-1.6.1.jar
geronimo-stax-api_1.0_spec-1.0.jar
junit-3.8.1.jar
log4j-1.2.13.jar
poi-3.6-20091214.jar
poi-contrib-3.6-20091214.jar
poi-examples-3.6-20091214.jar
poi-ooxml-3.6-20091214.jar
poi-ooxml-schemas-3.6-20091214.jar
poi-scratchpad-3.6-20091214.jar
xmlbeans-2.3.0.jar

I don't remember which ones I used, but those are the ones which were in the library when it worked. According to the code below, you will want to put those in "lib/java_classes." However, you can put them wherever.

The code below outputs the Excel spreadsheet as an array:

Dir.new("lib/java_classes").sort.each do | file |
  require("lib/java_classes/" + file) if file =~ /\.jar$/
end

include_class Java::org.apache.poi.poifs.filesystem.POIFSFileSystem
include_class Java::org.apache.poi.poifs.filesystem.POIFSFileSystem

include_class Java::java.io.ByteArrayOutputStream
include_class Java::java.util.Date


require 'yaml'

args = YAML::load(STDIN)

input = Java::JavaIo::FileInputStream.new(args["file"])

include_class Java::org.apache.poi.ss.usermodel.WorkbookFactory
include_class Java::org.apache.poi.ss.usermodel.Workbook
include_class Java::org.apache.poi.ss.usermodel.Sheet
include_class Java::org.apache.poi.ss.usermodel.Row
include_class Java::org.apache.poi.ss.usermodel.Cell
include_class Java::org.apache.poi.ss.usermodel.FormulaEvaluator

@spreadsheet = WorkbookFactory.create(input)
@formula_evaluator = @spreadsheet.get_creation_helper.create_formula_evaluator


def parse_value(cell)
  return nil if cell.nil?

  case cell.get_cell_type
  when Cell.CELL_TYPE_NUMERIC then cell.get_numeric_cell_value
  when Cell.CELL_TYPE_STRING then cell.get_string_cell_value
  when Cell.CELL_TYPE_FORMULA then parse_formula(@formula_evaluator.evaluate(cell))
  when Cell.CELL_TYPE_BOOLEAN then cell.get_boolean_cell_value
  when Cell.CELL_TYPE_BLANK then nil
  else
    raise "Don't know what to do with cell type: #{cell.get_cell_type}"
  end
end

def parse_formula(cell_value)
  case cell_value.get_cell_type
  when Cell.CELL_TYPE_NUMERIC then cell_value.get_number_value
  when Cell.CELL_TYPE_STRING then cell_value.get_string_value
  when Cell.CELL_TYPE_BOOLEAN then cell_value.get_boolean_value
  when Cell.CELL_TYPE_BLANK then nil
  else
    raise "Don't know what to do with cell type: #{cell_value.get_cell_type}"
  end
end

spreadsheet_as_array = (0..@spreadsheet.get_number_of_sheets - 1).map do | sheet_num |
  sheet = @spreadsheet.sheet_at(sheet_num)
  sheet_as_array = [sheet.sheet_name, []]

  sheet.row_iterator.each do | row |
    sheet_as_array[1] << []

    row.cell_iterator.each do | cell |
      sheet_as_array[1].last << parse_value(cell)
    end
  end

  sheet_as_array
end

puts spreadsheet_as_array.inspect

There is a flaw to this code above: an Excel sheet needs to be "cleaned" prior to importing. Excel files typically get tons of extra rows and tons of extra columns associated with the Active Cells. People apply formatting to unused areas by selecting all, etc. Therefore, go in and delete unused cells, and do "Save As" to get Excel to forget formatting on those cells.

To run the code above, do the following:

echo 'file: my_spreadsheet.xls' | jruby xls_to_array.rb

Statistically Improbable Cheating

2010-11-18T10:49:00.004-06:00

I recently ran across an article on finding test cheaters with statistics(http://www.telegraph.co.uk/news/newsvideo/weirdnewsvideo/8140456/200-students-admit-cheating-after-professors-online-rant.html), and I remembered an event I had when I was a teacher. Then, I recovered this from a message on 03/16/2005 when I was a teacher:

I had my students a test recently that contained 65 multiple choice questions. Also, I had a student tell me my class was easy, so I considered that a challenge to whoop the students with the next test.
So students are taking the test (which I give on computers, and it grades automagically) and the grades are coming back between 40's and 65's. Then some more classes come in and they start making between 40's and 80's. So the final average average is about 55. There is a good equal distribution so I can work with it.

I start figuring out how I am going to scale the test (and in public schools they frown on true Bell Curves. They are really looking for a line with about 5% failing and 30% A's. ). So I do some computer stuff and figure that I will split the hardest questions from the easiest on a scale with 5 steps. The hardest are worth 1.8 and the easiest are worth 2.2. That gives me a good line, and theoretically removes any bonuses for guessing correctly.

So, I get this knocked out. Finally I decided to write a little script to see if anyone is cheating. I examine everyone's answers, and the odds of two people having 60 of 65 of the same answers on the test is highly unlikely. Seeing how most only got 55% correct, correlations between two different test-takers should not be there.

After I run this script, I get 4 sets of students that have 60 similar answers. 3 of the 4 sets sit right next to each other. 1 of the 4 sets has one student that sits directly behind the other. There are no other correlations.

Convenient huh?

The odds of two students out 100 that are in of five classes sitting directly next to each other randomly putting the same answers for 60 of 65 four choice multiple questions the exact same is .00064%.

I think it was just brain waves interfering.

Using Math with Ruby Ranges

2010-11-17T08:43:00.000-06:00

Back in August, I wrote a little Ruby library that extends math functions to ranges (https://github.com/Winslett/RubyRanges). The sole purpose of the library was to easily work with schedules and conflicts.

For instance, given I am available from 2 to 6, yet have scheduled events at 3 to 4 and 4:30 to 5:15, I could use simple math functions like the following:

  (2010-11-17 14:00:00..2010-11-17 18:00:00) - (2010-11-17 15:00:00..2010-11-17 16:00:00) - (2010-11-17 16:30:00..2010-11-17 17:15:00)

Should equal an array of ranges of times the person is available:

  [(2010-11-17 14:00:00..2010-11-17 15:00:00),(2010-11-17 16:00:00..2010-11-17 16:30:00),(2010-11-17 17:15:00..2010-11-17 18:00:00)]

Please take the library. I look to convert it into a Gem soon, but job comes first.

Chris

Automating Microsoft Word with IronRuby

2010-11-16T03:50:00.006-06:00

Below some snippets with details of a project I worked on for documentation creation workflow. A core focus of the project was reduce the number of steps needed by a person to automate a document creation and distribution process.

At the basis of the organizational knowledge is Microsoft Word and Excel, therefore, we stuck with Microsoft Word and Excel. Given I introduced more base technology, I would have to support more base technology. Therefore, I tried to minimize change and maximize return-on-technology.

Each document was a mail merge file in Microsoft Word. Each mail merged document had multiple receipts, and the routing and packaging of documents could be either physical or E-mail. The physical distribution had a variable number of copies based on receipts, and the E-mail distribution had a single copy with a variable number of recipients.

Now for the code:

Below loads the information into IronRuby:

require 'Microsoft.Office.Interop.Word, Version=12.0.0.0, Culture=neutral, PublicKeyToken=71e9bce111e9429c'

Below I abstracted the Microsoft Word interface:

class Word
  attr_accessor :word, :documents

  def self.connect
    word = Word.new
    word.word = System::Runtime::InteropServices::Marshal.get_active_object("Word.Application")
    word.documents = (1..word.word.Documents.Count).inject([]) do | documents, num |
    documents && Document.new(:document => word.word.Documents[num])
    end
    word
  end

  def self.open
    word = Word.new
    word.word = Microsoft::Office::Interop::Word::ApplicationClass.new
    word.visible
    word.documents = []
    word
  end

  def visible
    word.visible = true
  end

  def close(args = {})
    args[:force] ||= false
    word.Quit(args[:force])
  end

  def printers
  System::Drawing::Printing::PrinterSettings.InstalledPrinters.map { | p | p }
  end

  def active_printer
  word.ActivePrinter
  end

  def active_printer=(arg)
  word.ActivePrinter = arg
  end

  def disable_alerts
  word.DisplayAlerts = Microsoft::Office::Interop::Word::WdAlertLevel::wdAlertsNone
  end

  def enable_alerts
  word.DisplayAlerts = Microsoft::Office::Interop::Word::WdAlertLevel::wdAlertsAll
  end
  
end

Below is the Document object. While working, I originally started with Document controlling the Word and Document objects, but eventually realized I needed to split the two:

class Document
  attr_accessor :document

  def initialize(args = {})
   self.document = args[:document]
  end

  def name
    document.Name
  end

  def ToString
    name
  end

  def self.find(*args)
    @@word ||= Word.connect

    case
    when args[0].is_a?(Fixnum) then
      @@word.documents[args[0]] || raise(WordErrors::DocumentNotFound, args.inspect)
    when args[0].is_a?(String) then
      @@word.documents.find { | document | document.name == args[0] } || raise(WordErrors::DocumentNotFound, args.inspect)
    when args[0] == :all then
      @@word.documents
    else
      raise(WordErrors::DocumentNotFound, args.inspect)
    end
  end

  def self.open(file_path = nil)
    @@word ||= Word.open

    document = Document.new(
      :document => !file_path.nil? ?
      @@word.word.Documents.Open(System::String.new(file_path)) : @@word.word.Documents.Add
    )

    @@word.documents << document
    document
  end

  def mailmerge?
    document.MailMerge.State != 0
  end

  def close(args)
    save_changes = args[:force] ? false : true
    @@word.documents.delete(self)
    document.Close(save_changes)

    if @@word.documents.length == 0
      @@word.close(:force => true)
      @@word = nil
    end
  end

  #
  # record => Fixnum, :first, :last, :previous, :next, [Fixnums]
  #
  def goto(record)
    return true if record == :current || current_record == record

    case
    when record.is_a?(Fixnum)
      document.MailMerge.DataSource.ActiveRecord = record
    when record == :last
      document.MailMerge.DataSource.ActiveRecord = record_count
    when record == :first
      document.MailMerge.DataSource.ActiveRecord = 1
    when record == :next
      document.MailMerge.DataSource.ActiveRecord = current_record + 1
    when record == :previous
      document.MailMerge.DataSource.ActiveRecord = current_record - 1
    else
      raise(WordErrors::RecordNotFound, "Cannot use '#{record}' to find a record")
    end
  rescue
    raise WordErrors::NotMailMerge unless mailmerge?
  end

  #
  # Expects the following variables to be passed:
  #
  # action => [:print, :save]
  #
  # args =>
  #
  #   :records           => [:all, :current, :next, :previous, :first, :last]
  #   :path              => path to the directory which will save the files
  #   :directory_formula => The formula for the directory based on the
  #                         Investors datasource values '#{Inv} - #{Investor}'
  #   :name              => The file name you wish to give the document
  #
  #
  def export(action, args)
    set_action(action)

    if args[:records] == :all
      1.upto(record_count) do | record |
        export(action, args.merge(:records => record))
        @@word.word.ActiveDocument.Close(0)
      end
    else # For all other possibilities
      goto(args[:records])
      export_current
      save(args) if action == :save
      Document.new(:document => @@word.word.ActiveDocument)
    end
  end

  def save(args)
    location = create_directory(args[:path], args[:directory_formula])
    
    url = System::String.new(File.windows_join(location, args[:name]))

    puts "Saving: #{url}"

    case
    when args[:name].downcase =~ /\.pdf$/ then save_as_pdf(url)
    when args[:name].downcase =~ /\.doc$/ then save_as_doc(url)
    else
      raise "Don't know how to save: #{location}"
    end
  rescue Exception => e
    raise WordErrors::CouldNotSave, "Error saving to #{location}\\#{args[:name]}", [e.to_s] + e.backtrace
  end

  #
  # Holder for an array of all the data fields in the DataSource
  #
  def data_fields
    @data_fields ||= return_data_fields
  end

  #
  # Returns the number of records in a DataSource
  #
  def record_count
    @document.MailMerge.DataSource.RecordCount
  end

  #
  # Returns the Row Value for a Particular Column of the
  # DataSource
  def field_value(index)
    index = data_fields.index(index) + 1 if index.is_a?(String)
    @document.MailMerge.DataSource.DataFields(index).Value
  rescue
    raise WordErrors::NotMailMerge unless mailmerge?
  end


  #
  # Pass in a formula for fields and it finds and replaces the fields
  #
  def replace_fields_with_values(formula)
    while formula =~ /\#\{([^\}]+)\}/ do
      replaced_string = $&
      escaped_string  = field_value($1)
      formula.gsub!(replaced_string, escaped_string)
    end
    formula
  end

  def save_as_pdf(url)
    @@word.word.ActiveDocument.ExportAsFixedFormat(url, Microsoft::Office::Interop::Word::WdExportFormat::wdExportFormatPDF)
  end

  def print(args = {})
  copies = args[:copies] ? args[:copies].to_i : 1
  document.PrintOut(false)
  end

  private
  #
  # Creates the Directory to the current record based on the
  # path created by the directory formula
  #
  def create_directory(path, dir_formula)
    dir_name = directory_name_from_formula(dir_formula)
    dir_path = File.windows_join(path, dir_name)

    FileUtils.mkdir_p(dir_path) unless File.exists?(dir_path)

    dir_path
  end

  #
  # actions = [:save, :print]
  #
  def set_action(action)
    document.MailMerge.Destination = case

    when action == :print then 1
    when action == :save then 0
    else
      raise WordErrors::InvalidAction, action
    end
  end

  #
  # Performs the current action as setup by other variables.
  # Including set_action.  This action will only be used with
  # the :save action, since print automatically prints records
  #
  def export_current
    document.MailMerge.DataSource.FirstRecord = current_record
    document.MailMerge.DataSource.LastRecord = current_record
    document.MailMerge.Execute(false) # false is whether to "Pause"
  end

  #
  # Generates a name for the directory based on the values from
  # the record and a formula given by the user
  #
  def directory_name_from_formula(dir_formula)
    dir_name = dir_formula.clone
    replace_fields_with_values(dir_name).gsub(/[^A-Za-z0-9\ \-\+\.\,]+/, "-")[0..64].strip
  end

  #
  # Returns an array of all the data fields in the DataSource
  def return_data_fields
    @data_fields = []
    1.upto(@document.MailMerge.DataSource.DataFields.Count) do | i |
      @data_fields << @document.MailMerge.DataSource.DataFields.Item(i).Name.strip
    end
    @data_fields
  end

  #
  # Returns the numeric value of the ActiveRecord
  #
  def current_record
    document.MailMerge.DataSource.ActiveRecord
  end

  def save_as_doc(url)
    @@word.word.ActiveDocument.SaveAs(url)
  end

end

Working to scrub the data of any domain specific content, then I'll post the full code. If you have any questions, please E-mail me, and I'll answer them.

Chris

T-Mobile's New G2 and Why You Should Know Math / Finance

2010-10-27T13:22:00.003-05:00

I was looking for my wife a new cell phone, and ran across a math / finance problem. Look at this screen shot:

For a math professor, like Dan Myer, it has all the information that is needed. It poses questions, many of them:

Which plan is cheapest?
When does the 500 minutes plan become more expensive than the 1000 minutes plan?
Should I purchase the phone for $499 or $199 given the change to the plan values?
Is there another carrier who is cheaper?
. . .

The question I am going to deal with is, "Should I purchase the phone for $499 or $199 given the change in the in the plan values?" For this experiment, I am going to use the Unlimited Minutes to test.

$499 + 79.99 * 24 is less than $199 + 99.99 * 24. Therefore, I should purchase the phone outright on a math basis.

Given you could invest the difference at 2%, the differing NPV's are about $170 difference. You're cost of capital for the contract is about 9% between the two plans. The cost of capital is a differential IRR equation. $-300 now, but $20 more per month over the next 24 months, which equates to 9%.

This figuring doesn't include the taxes and fees, which would presumably be higher on the $99.99 / month plan than the $79.99 / month plan. Giving even more lee-way to purchasing the phone in the beginning.

Why Top Students Don't Want to Teach

2010-10-25T14:25:00.000-05:00

Harvard Business Review recently sent out their "The Daily Stat" with the headline "Why Top Students Don't Want to Teach." Of, course . . . I was hooked. What amazes me is the difference between the questions "I would be proud to tell people I had this job" and "People in this job are considered successful": 60% versus 38%. To me, they are the same questions. "I would be proud to tell people I had this job" has a "correct" answer. The correct answer is "yes." "People in this job are considered successful" externalizes the question, and you get more honesty.

The teaching profession has a large public opinion gap to overcome. When I was a teacher, I was told multiple times "I can't believe you are a teacher." Have fun with the results:

http://link.email.hbr.org/r/QTSN/74I53/MSL8ID/XJ4N9/NBOSH/U1/h

What do Students Need?

2010-09-05T15:39:00.000-05:00

At any moment in a young person's life, he has something to talk about. Being around young people is a study of Maslow's Hierarchy of Needs. At any one point, a student needs to talk about items from many points allow the spectrum.

He could talk about friendship dynamics, school challenges, participation, pending life decisions, college, etc. Many students at all socioeconomic levels struggle with the lowest of food, shelter, safety, and power. Above are some "Leave it to Beaver" items higher in Maslow's Hierarchy of Needs.

Ironically, students have the least access to individuals whom they trust. They can't talk to friends, or they may be made fun of. They can't talk to parents, they are often enforcers of discipline. They can't talk to church leaders because they will be sent to Hell. As many questions and needs as students have, they don't have confidants. Just as adults and business leaders need confidants, young people need people they can trust.

Students need confidants. Productive confidants are parents, grand-parents, teachers, advisors, or older siblings. Dangerous confidants are manipulative factions: other students, gangs, and mass-media. If students do have access to good information, they will find the closest information.

As a teacher, my core belief is: At any time, a student has something to talk about. I gave time for students and listened. When I left teaching, I realized: At any time, everyone has something to talk about. Adults have compartmentalized these "things to talk about."

Asymetrical Information, Football, and a Rain Shower

2010-08-27T21:34:00.001-05:00

Hudson and I arrived home from the Mountain Brook v. Shades Valley high school football game. We were the only people at the game who were mostly dry. The rest were soaked by a short rain shower during halftime. How did we make it safely, and the others did not? I'll explain it with the financial concepts of "imperfect information" and "asymmetrical information."

Setting

The game was turning into a blow out; Mountain Brook has a star receiver (#7) and a pretty good QB. Shades Valley has a stud running back, but the offensive line couldn't block the eight people the defense rushed each play. Hudson and I arrived with half the first quarter remaining.

By the time we arrived, the parking lot was full. There were easily 3500 people in the stadium. In financial terms, 3500 people were "long" the football game. Of the people there, I saw one umbrella. 1 of 3500 people hedged the chance of rain. Everyone else relied on wit and intuition to avert rain.

The Information

Shortly after we arrive, I notice there are no stars or moon in the sky. The light from the football game bounced off the clouds. Using my new purchased smart phone, I downloaded "The Weather Channel" application. Compared to everyone else in the stadium, I held "asymmetrical information."

I had more information than my present environment. From the information, I determined: it might rain and if it did rain, it would be a small-short rain shower. Everyone held "imperfect information." Without knowledge of the larger environment, they only knew it might rain. Once it began raining, all they knew was "it is raining." The masses couldn't make a decision to stay or go, run to the car, or find quick shelter. Even if they made the right choice, it was with incomplete information.

My Decision

When the first rain drop hit my nose, I picked up Hudson and walked out. I was the first person to walk out the gate. Drops were falling sparsely. I looked behind me to see 20 people following. The other 3478 were betting on a few drops.

When I found the first good shelter, Hudson and I stopped. It was the guard shack at Mountain Brook High School. The guard shack would max out at 20 occupants. As Hudson and I stopped, the rain picked up. One lady with her son stopped, I told them "It will only be a couple of minutes."

As with markets, when the masses are long the football game and without hedges, there is only so much shelter available. Had I bet on rain and it not rain, I would have missed the the half time. My cost would have been the minutes I waited for it to rain. That was the cost of my hedge.

We waited.

Their Decisions

The 3478 people at the football game did not make decisions until realizing, shortly, they would be uncomfortable. Rain fell faster; not considered a soaking rain, it was a dowsing rain. Everyone else knew "it is raining." Everyone else made decisions based on the uncomfortable rain and the decisions others made. Shelters were full, under the trees was beginning to soak, and most people were running to their cars.

Everyone was making the best decision with the information he had.

Similarity to 2008

Beginning in 2005, certain people looked outside the bull market, i.e. the football game. They began making their decision to leave the market. They figure out how to short the market. At the football game, these people would have brought umbrellas and sold them during the rain storm. No one was that prepared.

In late 2007, other individuals began leaving the market. They had seen the future, and had made a decision based on risk. That was me.

In September and October 2008, that was the other 3478 people in the stadium. Shelters were full with the early movers. These individuals had two options: go to their car (sell and leave) or wait it out (take the pain).

Could I Have Sounded the Horn

Just because I was dry, doesn't mean I will always be dry. Just because others were wet doesn't mean they will always get wet. My information could have been incorrect. Meteorologist (read professionals) see the same information I saw, and get it wrong 50% of the time. I could have lost the cost of my hedge (i.e. the time to run to the guard shack).

Why didn't I tell everyone it was about to rain? Correct decisions always look more correct when looking at them from the future. Wrong decisions look like they could have been averted.

Few Things are Better Than Running with my Son

2010-08-26T10:07:00.000-05:00

For the last 3 weeks, I have made it a point to run more often. After the 3rd time running the first week, Hudson said "I going." I pulled out the jogging stroller and we ran.

He asked me questions about smaller objects we would pass in cars without noticing. In the morning, we talk about the beauty in the sky. I've taken him to an overlook near our house and looked at the rolling hills. He points out dogs, leaves, birds, cars, and drains.

This morning, we ran to a local park to have breakfast: apples and yogurt. He insisted on doing push-ups with me. I drew an awkward cat; he drew a good looking ant, including dirt. I played "Firehouse" with him. We sprayed out fires. Afterwards, I asked him if we should go look for victims. He said, "They are at the victim store." Once we got to the play structure that was "the victim store," he proclaimed "they have so many victims."

He and I have done different events together, and we get in streaks of fun. Well run for a couple more months until it is too cold to run outside. Then, we'll find another streak of fun.

Ah. . .the Start-up

2010-08-25T07:58:00.000-05:00

When people ask what's it like to be at a startup, I give them a metaphore.

At my previous job, I was given a coloring book. It was my responsibility to draw between the lines. Everything between the lines was my responsibility. I could make it however I liked, but I had definite limits. If I messed up on one page, we had the resources to turn the page.

At the startup, I have a blank canvas. Should I mess up the canvas, we don't have the resources to purchase another. But, should we not complete the canvas as to fulfill the market demand, we will be defeated by competition.

This week, John Mauldin wrote "The Importance of Start-ups." He spoke about the statistics of job creation and innovation. I am more interested in the "Why." What are the motivational factors associated with startups?

Human Capital Input

At a corporation, my individual contribution was unseen because I was apart of a whole. My role within the organization was largely unseen from the whole. Or, my poor performance could be subsidized by a better employee. At a corporation of 1000, I am 0.1% of the corporate human capital input.

At a start-up of 8 people I am 12.5% of the corporate human capital input. Therefore, waste in that 12.5% is seen quickly. One person failing at a start-up will cause a noticeable failure.

Urgency

Ever seen Lord of the Rings? Start-ups are Frodo, corporations are the Eye of Soromon (not in a good v. evil sense, but due to power and resources). The start-up runs quickly gathering customers without attracting the gaze of the corporation. However, certain actions a start-up takes runs the risk of attracting the attention of the larger corporation. This hyper competition felt by start-up causes them to run fast and even at night.

Individual Urgency

Nothing motivates the individual like the statement "If I don't perform, I won't be here next year." The company may be here, the technology may be here, but I won't.

Hyper Capitalism

A start-up is capitalism at it's core. A new company must perform all business functions to the level required, no more, no less. If the company wastes resources, it will be gone. If the company doesn't attract customers, it's gone.

It is capitalism at it's finest.

Learning is Controlled Confusion

2010-08-24T16:19:00.000-05:00

As a teacher, I prided myself on teaching the highest level of content. I taught past the last comprehension of a student in my classes. My philosophy on learning is: I learn when I address an idea I've not previously encountered. Therefore, learning begins with confusion. As part of the learning process, a student must learn to be confortable with confusion, and logically progress to a point of knowledge.

When presenting information, I presented it from many angles; however, if a student did not understand, I was "okay" and I moved on with the lesson. On any given day, a student may or may not be prepared to listen and work. I assumed the first students would fall off the lesson at 30% of concept, and the best student would depart at 85% of the content. The majority would understand 65% of the content. I expected my "student understanding level" to be a bell curve.

Just was the students grouped together in the middle of the content, I used the most time on the middle content. I did teach to 100%: the final 10% were high level topics, and the final 5% were key terms. The beginning 15% percent was quick review.

Exposure to higher level information sparks the students mind, and potentially fixes unresolving issues on the lower level information.

I encourage all teachers to teach students to be "okay" with confusion. It is the personal state which causes the most growth. The true power of knowledge is not knowing the answer, but finding the answer.

Why I Love and Miss Teaching

2010-08-23T23:27:00.000-05:00

From 2004 to 2006, I taught high school. The courses I taught were

Business Law - Contract, Tort, Criminal, Personal, and Agency Law
Interactive Multimedia Design - Image, Video, Audio, Print Editing
Business Software - MS Office Suite, Word, Excel, Access, PowerPoint
Entrepreneurship - Students won second in state competition
Web Design - Everything about web design

What I Loved About Teaching

The first lesson in Business Law I had planned for 3 months: origins of law. I discussed ethics, morals, religion. Students looked in awe as I crafted my argument. It was a magnificent lesson. At the end of the day, a student said, "You made me think." When hearing that, my inspiration to achieve soared.

As a teacher I learned my passion: challenge people with what they need to hear. Paint them a picture of their future, and push them toward it. Tell them they can achieve it, give them a path, and hold them accountable to that goal. I continue to employ this skill/passion as often as someone will listen.

What I Loathed About Teaching and/or Non-Essential Tasks

Each dislike I had for the education system derived from one problem: lacking constancy of purpose. As a teacher, I claimed to be "stamping out ignorance in East-Central Alabama." Often, I felt I was preparing students to conquer the world. Occasionally, the thought crept in my mind, "the education system drives our economy by allowing parents to go to work for a full 8 hours per day," which turned me into a $32,000 babysitter.

Schools adopted bloated mission statements stating the duality of purpose. Optimizing schools as knowledge centers and nurseries results in schools performing neither optimally.

Documentation causes paralises. The shear act of documentation is a classical management style which does equate to good teaching. In Sebastian Junger's War, he describes great garrison soliders as poor infantry fighters and great infantry fighters as poor garrison soldiers. Essentially, you want to fight with a "hell raiser." Good documenters are poor teachers; good teachers are poor documenters. Since I considered my job to "provide the most holistic education possible to my students," I often turned in documentation at 11pm on the due date.

Since 1930, the education system has instituted 80 major initiatives (assuming 1 per year), yet has not removed a single one. Education systems should prioritize their initiatives; then, formally retire items outside the top five. Teachers receiving tasks, reading mission statements, or policies will find too many tasks to effectively provide.

What I Learned

Teaching young people at school is a unique environment: I was responsible for students who did not necessarily need to be there, or want to be there. My "carrot" was an environment to grow and learn. My "stick" was failing. I believed the average grade was a 75, and students receiving an 'A' were exceptional. The stick was as a sales commission: directly tied to performance.

Due to my belief in the values of Theory Y management, "the stick" was rarely used. I learned students wanted to learn. I learned students wanted attention for performing outstanding work. I learned students are complicated human beings: the 96% of their time outside my class affects my class. Positive progress in my class can affect the other 96% of their time. Students want to feel people are supporting their growth. Someone is watching and waiting for them to achieve.

As convicted as I am with Theory Y, I learned it is tougher. Organizational culture drive performance and unspoken rules. However, once students agree, they support the system for growth. Students eventually support each other and push growth.

Part of "the stick" was behavior correction. As young people are apt to do, they wanted to assert their place in my class. I prided myself on knowing what was "good", "okay," and "wrong" actions. The "good" I praised, the "okay" I kept a check on, and the wrong I fixed quickly with a sharp rebuke. I learned to discipline a student whom I genuinely liked. I eventually considered discipline a core component of helping these young people grow.

Lastly, I learned to love public speaking. As I stand in front of people I feel the room, watch their responses, and tailor my message. Given bodily responses, I can determine who is interested, who would like another method of explanation, and who would never accept my message. I learned to speak with authority, and accept questions on the fly. Even if every prop I had planned is failing, I learned improv. One day, electricity was halted; we discussed the philosophy behind our work.

Why I Quit Teaching

In the end, I quit. I have various excuses, but none satisfy me:

My wife wanted to stay at home with the future kids, which she couldn't do on a teacher salary.
My next step was to get my MBA.
I was burned out on teaching 8 hours per day, and documenting the other 2 hours per day.

My passion for teaching waxed and waned as often as I felt the grass was greener in the business world. Lot's of folks around me seemed to put bugs in my ear about my potential outside the classroom. In 2004, going the public school teaching route with a degree in Business Management looked like my career had crashed on take-off:

My professor/mentor, Dr. Hamilton, looked visually disgusted when thinking of my decision.
While I was walking with a student, he said, "Mr. Winslett, I would expect you would be doing something more."
My father, assuming I should feel sinful for what he was about to tell me, said, "You know you are being paid with tax money right."
Even today, my quick description of the decision to take the teacher job is "They were the first organization to say 'we will pay you to spend your days here.'"

While I was teaching, most everyone was shocked I was teaching: except me. However, the eventual push of my perceived under-performance was too much: I jumped off a hedge fund to complete my MBA.

Completed Circle

My passions for work are: business, technology, and education. Now, at GradesFirst, I am realizing each. For me, business is a team of individuals accomplishing one goal via many motives. When I see technology, I see good business practices. Education is the largest of the three: it is where the world changes. Business is the local team; technology is the method; and education is the output. We at GradesFirst produce change in people's lives.

How to "Save" Birmingham, Alabama, Part I

2010-08-21T08:05:00.001-05:00

Step 1: Realize Birmingham doesn't need "saving."

The metropolis area of Birmingham does not need to be saved. It needs to be celebrated. Birmingham looks at faults longer and harder than it celebrates successes. Focusing on faults results in decisions taken to minimize failure instead of maximize return.

When I was a younger whitewater paddler, an older man told me, "When paddling through a rapid, focus your eyes on where you want to go. Never look at where you don't want to go."

Each action creates a different mindset: paddling by focusing on failure causes you to mitigate risk. Paddlers will be more likely to abandon the "best" route, and attempt to navigate a poor route.

Paddling by focusing on success causes you to do what it takes to hit the mark. Instead of abandoning the route, you choose your route more precisely, and work like hell to get there.

Perhaps, the reason Birmingham focuses on failure is: it doesn't know where it wants to go. When all choices are judged as negative, the decision is always to minimize failure.

`Would you tell me, please, which way I ought to go from here?'
`That depends a good deal on where you want to get to,' said the Cat.
`I don't much care where--' said Alice.
`Then it doesn't matter which way you go,' said the Cat.

`--so long as I get somewhere,' Alice added as an explanation.
`Oh, you're sure to do that,' said the Cat, `if you only walk long enough.'
Alice felt that this could not be denied, so she tried another question. `What sort of people live about here?'
`In that direction,' the Cat said, waving its right paw round, `lives a Hatter: and in that direction,' waving the other paw, `lives a March Hare. Visit either you like: they're both mad.'
`But I don't want to go among mad people,' Alice remarked.

Step 2: Laugh

Our good friends at View of the City (http://viewofthecity.net) handle this. It's essential we don't take ourselves so seriously.

Step 3: Failure is Not the End

Unless you make it the end. Out of failure arises the knowledge that the sun will rise tomorrow. When paddling, the key purpose is to "not swim;" i.e. come out of your boat. When learning to paddle, I always paddled better after I swam. I'd seen failure, and I got back in the boat and tried again.

My Distorted Meaning of Happiness

2010-08-20T22:37:00.000-05:00

The following article is based on the following assumptions:

Everyone likes to learn, work, and progress
Everyone wants a job they feel completes them
Everyone is smart enough to examine oneself

A Sad Life

The recession has uncovered flaws with companies and individuals. Companies with bloated systems, failing markets, and those lacking direction have been wiped out. Individuals with bloated systems, failing markets, and those lacking direction have been wiped out.

Let me describe the individual with the worst prospects in the current economy, I'll call him "John" and the company "SouthTrust":

John graduated college
John started working at SouthTrust when he was 22
John is now 48
John is middle management at SouthTrust
John knows middle management
John earns $90,000 / year
John spends $90,000 / year
John hasn't made a key decision for the company in 18 years
John hasn't talked to a customer in 18 years
John hasn't talked to someone else doing his job in another company for 20 years

This fabled "John" stalled. There was an illusion of success long ago, but now it's escaped. John has the same faults as companies currently failing: he's bloated, failing, and lacking direction.

That's the saddest image I could imagine: John blew away his options.

John's Faults

Pop quiz: what enables the greatest happiness? Options.

Pop quiz: what makes people the happiest? Exercising options which enable someone to learn, work, progress, and explore.

John, whom I described above, has no options. He can't transfer his skills easily. He has to keep his current job: his lifestyle depends on it. He limited his options by stagnating professionally. He limited his options by structuring his life to require he continue to work. He limited his options to change.

The Happy Life

The happy life would structure life to maximize options.

Money

Receiving cash creates options. Spending cash reduces options. Creating debt (i.e. using your credit card) reduces your future options more than spending cash. Creating an expensive lifestyle reduces options.

Knowledge

Learning creates options. Being a master of a field creates options. Practicing your knowledge creates options. Sitting on your ass playing video games reduces options (what. . . really? If you want to know why, look at "Time.")

Knowledge creates more options than does money. That's why parents are so willing to send children to college. The $40,000 spent for knowledge is more valuable than the money. Why do you think colleges raise tuition, yet people continue to attend?

Time

Since time only goes in one direction, each day that passes reduces options. You have time in your life to do one less thing. Of all the things you can change, this is the one that should ring your bell. You can change this: it's called "now." Do you want to make a change? Make it now. Then only good choice is one that increases your options now.

Networking

People connecting with others creates options. Connections are as valuable as knowledge and time. Companies pay good money for connections. Please pay good money for connections.

Summary

When making a decisions on your actions, choose the one creating the most options. Look far enough in the future, and look out for cul-de-sacs in your decision tree. John, above, reached a cul-de-sac. His next decision creating the greatest number of options is to go back the way he came.

How is Automobile Traffic Like Financial Markets?

2010-08-20T22:01:00.001-05:00

Automobile traffic like financial markets? One concept: arbitrage.

In finance the concept of arbitrage keeps markets fair. Given two farmers' markets in your town with different prices, Pepper Place and Alabama Farmers markets (two real farmers' markets in Birmingham, AL), farmers and buyers will ensure prices are equivalent. Given a perceived similar tomato, it should cost the same at either market. Market participants are smart, and they will create balance. Sellers and buyers at either market will move quickly to the other if they can get a good price.

Market participants participating in arbitrage ensures these markets are balance. Non-farmers could make money by purchasing at one market and selling at another.

In Birmingham, AL, traffic runs south through multiple channels: I-65, US 280, US 31, and AL 52. Given no traffic, everyone traveling to Montevallo, AL (25 miles) would travel I-65 and arrive in 20 minutes (70 MPH). Given stalled traffic on I-65, the next person starting in Birmingham going to Montevallo would travel US 31.

Consider different paths as different markets. Instead of tomatos, the highways sell transportation, and their price is travel time. As with costs for commodity products, people minimize their costs. For the average person with the average knowledge of the market, he cannot travel quicker than average using any of the four methods. For the person with the highest level of knowledge about the different markets, he can expect to travel faster regularly.

Information Reduces Cost

As with financial markets, real time information creates advantages on the road. Googles realtime traffic information creates advantages for people to take advantage of arbitrage. Any driver can determine travel time on one route, shorten exposure to that route, and lengthen exposure to another route.

Capital Asset Pricing Model

The Capital Asset Pricing Model is: for more risk, you would receive more reward, or it is a poor decision. Each level of risk has an optimal reward, anything less than the optimal reward for a level of risk is a poor decision. In Birmingham, you could go North to get South, but I'd expect the South-bound systems to be dead still. That would be a scenario of taking extreme risk with an attempt to have a greater reward. The more logical path is to wait as the South-bound systems to free up.

The System

For the average level of risk, you can't expect to do significantly better or worse than the system. Within any system, rewards are a function of the system. In a car, traveling to Montevallo from Birmingham, travel time will never be less 20 minutes. Any stoppage will always cause exponentially greater travel time from the average. Therefore, for the average person, choosing a path different than the interstate is useless, and don't expect to get there faster than the internet.

Why Buses are Useless for Mass-Transportation

This begins my thesis: buses are a waste of money for mass-transportation. I'm not talking about transporting lower economic classes: for that buses have their place, but they still suck.

If everyone rode buses one day, then no cars would be on the road. Seeing no cars on the road, most people would drive their car the next day. Eventually, the market for transportation (i.e. the interstate) would balance. Buses as mass-transportation are useless because they are a function of the same system: the highway system.

Trains are apart from the highway system -- though not without fault. Given a dual track system, they offer a "benchmark" for interstates. If a train takes 30 minutes (no matter what) to travel from Birmingham to Montevallo, then the train should make the average travel time on the highway 30 minutes.

Each South-bound travel method, the four highways and one train route, would equalize overall travel market. However, the one train route would have the greatest affect because it is apart from the other linked systems.

3rd Week at a Start Up

2010-06-29T13:26:00.000-05:00

I've discovered an indirect correlation between my waking early in the morning and events going as planned. At the end of the first week, I'd developed my goals, a plan, and my timeline. Having these three things together, I slept easier.

My goals, much like Obama's, revolves around the first 90 days. My effort will go toward making significant change quickly.

My Goals

90 Days

Review and update as a team our development systems
Complete a reporting solution
Update website to a CMS
Sell to the University of Montevallo (alma mater)

My Plan

Make it through the first 90 days, start on next 90 days.

My Timeline

Bust it for 90 days, readdress after 90 days.

Starting Up at a Start-up

2010-06-05T03:23:00.002-05:00

Last week, on May 31st, I began anew at a start-up. Prior to taking the position, I performed due-diligence on the company and myself. What I anticipated was accurate. It is 3am. I woke up at 12:30am thinking about business.

When thinking about my new role prior to accepting, a new weight of business hit me: I will be responsible to the livelihood of others. In business school, I'd heard entrepreneurs discuss the responsibilities of making payroll. Turn it over in my head, I never felt the empathy associated with that level of responsibility. When I had the thought, I felt the responsibility of it.

In my prior position, I was 1 of 225 employees. Essentially, I was 0.4% of corporate output. If I was missing, 99.6% was there to fill the gap. My position was a cost defensive position: I protected against rising costs of business processes. I was neither responsible for revenue, nor strategy. However, what I was responsible for, I nailed.

Now, I am 1 of 9 employees. 10% of total business output. In some roles, I'm as high as 100% of corporate output. My actions are directly responsible for revenues today, next month, and the next month. All decisions are a precedent for the company.

Being early Saturday morning of my first week, this is not the first time I've woke early: it's the 5th. As proposed by legions of thinkers, when I sleep, my brain goes into "fix" mode. My brain is working to get things in order as it sees it. Of course, the best rest is to wake and actually get those in order.

And with that, I'm off to work.

Migrating to Postgres from Microsoft SQL Server with a little Ruby on Rails

2010-02-26T10:36:00.003-06:00

Recently, I stopped the research phase of a business process project, and started the development phase. Out of research, I had determined using Ruby on Rails with JRuby and JDBC would be the best bet for interoperability with the current infrastructure. The current infrastructure consists of a enterprise level CRM running on SQL Server with .NET. The project would create a dataset which received CRM data. I chose SQL Server for this project to minimize complexity – one database engine.

For those interested, the following is how to connect to a SQL Server from Ruby on Rails using JRuby and JDBC. Be sure to download and drop the sqljdbc4.jar into your JRuby lib folder.

development:
  host:              cwinslett-475
  adapter:        jdbc
  database:     db_name_development
  username:    myuname
  password:     mypword
  driver:   com.microsoft.sqlserver.jdbc.SQLServerDriver
  url:      jdbc:sqlserver://myserveripaddress;databaseName=db_name_development

The Last Straw with SQL Server – Pagination

Take a look at the following:

SELECT * FROM (SELECT TOP 20 * FROM (SELECT TOP 20 * FROM contacts ORDER BY contacts.last_name, contacts.first_name) AS tmp1 ) AS tmp2

This is SQL Server’s solution for pagination. That is ugly, but fine. However, pagination returns an odd number of rows when performing joins. The following is the SQL:

SELECT * FROM (SELECT TOP 18 * FROM (SELECT DISTINCT TOP 18 investments.id FROM investments LEFT OUTER JOIN authorized_contacts ON (investments.[id] = authorized_contacts.[investment_id]) LEFT OUTER JOIN contacts ON (contacts.[id] = authorized_contacts.[contact_id]) WHERE (authorized_contacts.is_primary = 1) ) AS tmp1 )

The Solution – DataPumper

Also known as SQL work Bench (http://www.sql-workbench.net/) , it’s the easiest way I’ve found to migrate from SQL Server to Postgresql.

I arrived at it after trying the built in “Export” feature in SQL Server Management studio, but it failed with the Postgresql ODBC. I performed any 45 minutes of searches and finally arrived at DataPumper.

When I downloaded it, I fired up the GUI. I pointed it to my SQL Server CRM database. Worked like a champ after pointing to the JDBC files for the databases.

Integrating with Ruby on Rails

I now use DataPumper for my “rake db:seed” task. I needed production data for my environment, and when I deploy, I’ll need the same data. First step was setting up my export schema. I created a file with all my tables (db/development_import):

WbCopy -sourceProfile='My SQL Server Profile'
      -sourceGroup='Default group'
      -targetProfile=’My Postgres Profile’
      -targetGroup='Default group'
      -targetTable=addresses
      -sourceTable=dbo.addresses
      -columns='description/description, address/address, address_2/address_2, address_3/address_3, address_4/address_4, city/city, province/province, postal_code/postal_code, country/country, is_primary/is_primary, is_mailing/is_mailing, id/sql_server_id, contact_id/sql_server_id'
      -deleteTarget=false
      -continueOnError=false
;
WbCopy -sourceProfile='My SQL Server Profile'
      -sourceGroup='Default group'
      -targetProfile=’My Postgres Profile’
      -targetGroup='Default group'
      -targetTable=contacts
      -sourceTable=dbo.contacts
      -columns='prefix/prefix, last_name/last_name, middle_initial/middle_initial, first_name/first_name, suffix/suffix, company/company, phone_work/phone_work, phone_home/phone_home, phone_other/phone_other, email/email, email_2/email_2, email_3/email_3, authentication_string/authentication_string, id/sql_server_id, formal_salutation/formal_salutation, fax/fax'
      -deleteTarget=false
      -continueOnError=false
;

Then I copied the sqlworkbench.jar to db/ sqlworkbench.jar. Then I configured db/seeds.rb:

    `java -cp db/sqlworkbench.jar workbench.WbStarter -script=db/development_import`

Now, when I run “rake db:seed” it will fire off the data migration. When I run “rake db:reset” I get a clean DB with fresh data.

Data Clean Up

In my data migration above, I map the Primary keys from SQL Server to another field, because I want Postgres to handle its own Primary Keys. I added this to the end of my db/seeds.rb:

ActiveRecord::Connection.execute(“UPDATE addresses
SET contact_id = contacts.id
FROM contacts WHERE contacts.slx_id = addresses.contact_slx_id;”)

Data Migration Gotchas

Data types will hurt here. Database data types are not standard. Even if databases had the same data types, application developers use different conventions. Above, in my DataPumper configuration, I use “-sourceTable.” However, the “-sourceTable” is actually a view I’d created to use with Rails. I had already done data type variable casting to get boolean types. I did this with the following in my SQL for the view, notice the inline (CASE WHEN THEN statements):

SELECT ADDRESSID AS id, ADDRESS1 AS address, ADDRESS2 AS address_2, CITY, STATE AS province, POSTALCODE AS postal_code, COUNTRY AS country, ADDRESS3 AS address_3, ADDRESS4 AS address_4, ENTITYID AS contact_id, DESCRIPTION, CASE ISPRIMARY WHEN 'T' THEN CAST(1 AS bit) ELSE CAST(0 AS bit) END AS is_primary, CASE ISMAILING WHEN 'T' THEN CAST(1 AS bit) ELSE CAST(0 AS bit) END AS is_mailing FROM dbo.ADDRESS

A Service Bottleneck

2009-08-07T06:23:00.004-05:00

When I was looking at time series data from my previous post, I found an interesting issue. First, the above graph represents "connected time," i.e. time people are actually using the resource; else, the value at Zero would dwarf the entire graph. The Y-axis is the number of seconds served for the corresponding number of concurrent connections. This is actual data, and the describe is generic.

The coolest part is: IT'S A BELL CURVE. I've read about these in statistics, but this is the first time I've encountered one in the wild. I knew I had a problem when the bell curve did not flatten out on the right tail. The physical limit of the resource is 23 units. As concurrent connections approached 23 units, new connections were denied and subsequently retried. See the "hump" beginning at 18 units? That's the graphical representation of a bottleneck.

Now, how to fix this. . .it's not practical to fix this problem with a technological solution. 95% of connected time is served prior to the bottleneck at 18 units. Over 90% is served with the first 13 units, and the marginal return for each subsequent unit is less valuable.

The fix is with a business control. First we determined the build up occurred due to multiple long running connections, which did not act like the other connections. Many of these connections began at the same time and finished at the same time, and did not disconnect randomly. Therefore, we modified the behavior of the people using the long running connections.

Working with Continuous Time Data

2009-08-06T12:58:00.000-05:00

Recently, I was asked to study some time series data. Each record contained a date range, bracketed by a DATE_TIME and an END_TIME field. The objective is to find number of concurrencies for all records’ date ranges. Each second in each date range must be compared against other fields, and calculate a total for the date range, i.e. 3 concurrent events at 8:30:31 AM on July 31^st.

First, I tried modeling this with Excel. With relatively few records, 600, this was extremely quick, immediate information. I listed the possible times in 1 minute increments. However, as the increment shortened, the possible times exponentially expanded. Excel lost steam as we approached 10000 times being checked.

Next, I tried a SQL query using an accompanying table with a datetime field. I used a scripting language to walk through each second of each record’s date range and create a record in the accompanying table. Then I could use the following SQL command to pull the data:

SELECT time, COUNT(time) FROM times GROUP BY time ORDER BY time;

This created two bottlenecks: 1) populating the accompanying table, and 2) retrieving the data. As the accompanying table expanded the GROUP BY statement became a burden.

Solution was to use a SQL aggregating table with a counter field. I ran a massive SQL creation of every possible time between the ranges we examined. Use a scripting language, I walked through every record, and ran the following SQL command:

UPDATE times SET counter = counter + 1 WHERE DATE_TIME >= record AND END_TIME <= record;

The final solution took a day to run for results from the previous month. It was faster than the two previous methods, and only created one bottleneck.

MLB Road Trip

2009-07-17T06:13:00.001-05:00

I was looking for a site to quickly plan a MLB road trip, and many exist. However, most are not effective at consolidating information I need: dates, locations, and games available.

So I built one myself:

http://mlb-road-trip.winsletts.com/

Currently, I don't have minor league games, but that is around the corner. Please, send or leave a comment on the site.

Review: Bluehole OCA

2009-05-17T06:56:00.006-05:00

Pros:

Large planning hull is wide and stable
Soft chines make side surfing easy

Cons:

Weighs 80 lbs. – maybe more

Specs:

Length: 15’2”
Width: 36”
Rocker: 2”
Paddler Weight: 100 lbs to 1000 lbs

Summary:

Yesterday, I ran the Locust Fork as it fell from 4 to 3.5 in my grandfather’s Bluehole OCA. The boat was produced in 1975, has some Royalex damage on the underside of the hull, but still floats. It has an old Birmingham Canoe Club sticker on it. My grandfather was a member back in the 70’s when LRC was suicide, Bull Dog Bend was the place to go, and the Locust was for experienced paddlers. The last time I’d paddled this boat on the Locust was some of my first whitewater trips, so it was good to reconnect with the original.

The boat was outfitted with a 72” airbag in the front, and knee pads for comfort. I bought that airbag in ’01 from Grainger at Alabama Small Boats – I assume he’d had it on the rack for while.

I was surprised at the speed of the old boat. Turn it on a chine, give it a forward stroke and the boat takes off. Arriving at eddies was easy; catching the eddy was a different story. I’m used to harder edges on a canoe that whip into the eddy; however, the soft chines of the OCA plow straight through the slow water. To get the boat to whip around required a strong bow draw. Even then, you needed maneuvering room.

The large planning hull makes an awesome surfer. Side surfing at ender hole was a good 12-second ride. Since I didn’t have a rear air bag, the boat stern squirted and flushed me out. The recovery process took 3 other boaters, and about 5 minutes. All of whom I thank again. I surfed the boat on a couple of other front surfing waves. The downside to playing in the OCA is the exhaustion from muscling the boat around.

Other than the play, the boat ran the river flawlessly. It always took to my commands when moving down rapids. On Double Trouble, I moved from right-to-left behind the top hole, and into the eddy easily. Above the river right hole on Tilt-a-Whirl, I caught the eddy, ferried across, perused on down, and took on minimal water. On Powell Falls, I got a little ambitious and ran the right bump. Everything went as planned, until I flipped on landing—my fault.

Overall, the boat was fun to reconnect with. It was easier to paddle than I remembered, and made for a fun day. In the future, I’ll probably pull the OCA out a little more.

Renault-Volvo Strategic Alliance

2009-05-08T13:07:00.001-05:00

Written with Mahendra Madhavan for a case study in our Global Financial Management course.

Thesis

Disproportional control of the resulting Renault-Volvo RVA by the French Government was not a merger; it was an acquisition. Volvo investors lost all control of their organization, while assuming the risk of Renault. Volvo’s Executive Chairman, Peter Gyllenhammar, attempted to perform a unilateral cram-down by requiring quick decisions and giving sparse information. After pulling the company from its core competencies, Gyllenhammar resigned. Volvo leadership leveraged those failures to return the company to its core strengths.

Why was the merger proposal rejected? The economic rationale for the merger seemed unassailable. What other considerations proved significant?

The reason investors reject the merger is inadequate information from Volvo management. When Volvo’s Executive Chairman, Peter Gyllenhammar, champions the merger, he gives an incoherent retort emphasizing a quick merger, and non-business arguments such as: “You cannot go back to something you have just mentally left” (7). Volvo’s senior management loses confidence and trust of the investors by requiring a short timeline, and excluding them in the latest development; exceptional information must be provided for corporate changing events, like mergers. Volvo management performs improperly--only sparse information is provided, which creates uncertainty among the investors.

In addition, merger terms are not fair for all of Volvo investors. The French government retains a powerful right, termed a Golden Share, which prevents an investor from acquiring or voting more than 17.85% of direct interest in the merged company Renault Volvo Alliance (RVA). In concessions, the French Prime Minister raises the figure to 35%, matching Volvo’s actual percentage of equity at closing. Control of the special voting rights gives Volvo little control in the strategic direction of RVA.

Volvo investors are concerned about protectionist actions of the French government in other industries. French government intervention in internal RVA affairs and the powerful Golden Share ensures the French government retains control over corporate decision making. When Gyllenhammar tries to reinsure Volvo investors about French control, he vaguely states an attempt to get “interpretation or assurances” (7). A yet undefined timeline on the privatization of Renault creates anxiety among Volvo’s investors. Among the concerns, France’s Minister of Economics, Edmond Alphandery, has stated full privatization would not occur.

As a public company, Volvo’s market value is explicit. Yet, as a private company, Renault’s enterprise valuation contains assumptions on discounted cash flows, projections, and market multipliers. Since a privately held organization does not file financial statements to financial regulators, investors rely on biased information provided by merger proponents. Such valuations are subjective judgments of the valuation analysts. Resulting losses by Renault during the valuation and the proprietary details of the valuation analysis cause considerable concern among investors. Given this situation, investors question the fairness of 65% weight for Renault ownership in RVA.

Who figured prominently in the rejection? Did the opponents have one common objection, or did groups of them oppose different aspects? Either way, was Gyllenhammar’s approach appropriate?

Several groups oppose the merger. Volvo’s institutional investors leveraged the media for opposition. The Swedish news papers Expressen, Dagens Industri, and Svenska Dagbladet, all opposed the merger. Volvo senior and middle managers wrote letters to Soren Gyll, CEO, indicating disapproval of Gyllenhammar’s merger proposal. Merger opponents commonly object the lack of clarity and the uncertainties over the values implied in the merger agreement. Comments provided by the institutional investors in Exhibit 5 state such shortcomings. From Volvo’s Annual Report for 1993, Gyll wrote in an annual letter to the shareholders:

It is important to convey knowledge and understanding of the company’s current orientation and status to all interested parties. Candidness and clarity must characterize our operations. . .

Gyll understands the importance of shareholder information, and the lack of which caused the RVA debacle.

Gyllenhammar, the Volvo’s chief architect of the Renault-Volvo merger, began with intentions to make RVA a leading global auto manufacturing company. Three arguments for the merger are (1) competitive efficiencies, (2) operating efficiencies and (3) financial strength. Proponents envision this in phases: the 1991 strategic alliance leads to combined company in 1994. Through the process, Gyllenhammar invested personal amount of time and energy to create the alliance. However, he deviated from fundamental steps required for the complex merger of public and private entities. 164,000 institutional and private investors own Volvo, and the majority is required to approve the merger. Stakeholder buy-in requires earning the trust and confidence of most parties. Gyllenhammar releases three documents a span of two months; the first two contained soft information with no financial forecast. Since synergy is cited as the primary advantage, a lack of financial support for synergy eroded investor confidence. When disclosed, details of the Golden Share surprise Volvo’s board of directors. The details of which are hashed together only two days before the announcement. Such actions constitute calculating intentions or brash foolishness by Gyllenhammar. Although the board iterated support several times, investors felt the Gyllenhammar’s submission to the French government gives Volvo away cheaply. Criticism of Gyll by Gyllenhammar for his half-hearted leadership of his management team indicates the merger proposal is an ego clash.

Volvo’s latest financial reports show a surge in profits (SKr 1.03 billion) for trucks and cars for the first nine months of the year contrasting a loss (SKr 707 million) in the corresponding period the previous year. This begins the company’s emergence to profitable, and Renault reports losses tied to the recession in the European automotive industry. Analysts questioned if Volvo needed Renault. Gyllenhammar should use the latest financial results to renegotiate ownership balance in RVA and possible removal of Golden share arrangement.

In his three page resignation document, Gyllenhammar lists the efforts undertaken by Volvo under his leadership for merger with Renault. He criticized the shareholders for rejecting the merger proposal; yet, not a single sentence spoke regards the Golden Share agreement, which was concern for all Volvo investors. Initial intentions of a merger were geared to make RVA dominant in the 21st century auto industry. Gyllenhammar created a divisive situation and failed to act in the best interests of the Volvo’s share holders.

What was the “process” by which the proposal failed? Since no vote was taken, had the proposal really failed?

Once the proposal shows cracks, the growing opposition from media, investors and employees overwhelms any progress. For Gyllenhammar, the process failed. For Volvo, the process is an inactionable proposal. Gyllenhammar communicates poorly and lacks sufficient information to make the proposal actionable. He admits lack of clarity: “If we can address these other concerns – give more clarification, perhaps get positive news on privatization – then we think the chance is very good.” To win the process, he should provide infinite documents creating an overload of transparency.

Once concerns fuel nationalistic, conservative editorials, Swedish Small Shareholders Association announces the evaluation is impossible on the basis of meager information. This was in response to an eight-page brochure summarizing the terms and rationale for the merger. The document stated synergies would save up to Fr 30 billion (both Volvo and Renault) by the end of 2000; however, no financial forecasts validated the estimate. Volvo published a 2nd document at the request of shareholders; again it contained no financial forecast and little detail. This document only expanded on allocation of the synergies: 60% from car and 40% in truck and bus operations. Finally, Volvo released a third document containing supplemental information, a valuation discussion and fairness opinion from Credit Suisse First Boston, and copies of letters from the French government. The letters contained assurances regarding use of the golden share and privatization. This document addressed the concern of an institutional investor questioning fair value of Renault’s shares. By this time institutional investors had decided not to support the merger proposal. Volvo employees with 5000 white-collar workers announced its members would vote their shares against the merger proposal. Volvo dealers in North America expressed strong concerns that the merger would dilute Volvo’s strong brand franchise because Volvo was viewed comparatively poor there. Lastly, 900 company civil engineers called for postponement. Push against the merger rises quickly after one dissenter.

The proposal failed when Volvo’s board decided to withdraw in December 1993 based on the recommendation by Soren Gyll. He based the recommendation on a special meeting with Volvo’s senior divisional managers, and a letter from 25 senior managers expressing disapproval. Under the alliance, control of joint activities had been 50/50. With the merger, managers believed that control would tilt 65/35 to Renault and Volvo.

What were the implications of this episode for analysts and executives in strategic alliances?

Executives pursing a strategic alliance should allay stakeholder questions by providing timely, accurate, grounded, and factual information. An emphasis on trust and confidence creates a buy-in atmosphere for all parties; strong-arm tactics and limited timelines create questions and divisions. Executives involved in strategic alliances should frequently seek third party analysis looking at the rational for the agreement. Gain pre-approval from employees, senior, and middle management prior to corporate changing actions. As basic business practices, executives must communicate benefits from corporate decisions to internal and external stakeholders.

Strategic alliances looking toward an eventual merger require continuous monitoring to ensure the decision is the company’s best interest. Environmental and economic factors change and strategic alliance should be analyzed within that context. Communication between companies should remain open, and any attempts to renegotiate must be viewed amicably. Executives should never view the merger as a foregone conclusion of a strategic alliance.

Paradox of Tax

2009-05-03T09:08:00.001-05:00

Currently, the United States government, states, and cities derive tax revenue from income, property, gambling, sales, and sin taxes. These tax revenues have been used to build public services: roads, police & fire forces, healthcare, and parks. Rarely are the taxes people pay directly attributed to the benefits received. For instance, income taxes build roads, and higher income individuals build more roads than lower income individuals. However, lower income individuals pay less per mile than higher income individuals who drive less. The paradox of our tax system and usage of tax dollars forces people to act unnaturally.

A person acts unnaturally when he cannot assess the full cost of performing an action. Collectively, the problem multiplies. I’ll discuss roads because everyone is familiar with driving. However, it should be replicated across as many services as possible.

Governments should remove the portion of income, property, gambling, sales, and sin taxes spent on building and maintaining roads. Then, instate that tax on gasoline sales. Net effect on the average citizen who makes the average income and uses average gasoline will be zero. Net effect on high-income individuals who use less than average volumes of gasoline will be positive. Net effect on low-income individuals who use above-average volumes of gasoline will be negative. Therefore, people will directly associate actions with costs.

When people directly associate a cost with an action, they minimize that action. Revenues for road maintenance and building will crumble in the short-run. The US observed this with demand destruction at $4.50 / gallon. However, people make decisions that lower the cost of road maintenance and building: driving lighter cars that consume less gas, move closer to required amenities, or walking versus driving. Individuals are given the option to choose their tax rates (but actually a 'service fee').

Taxes and government policies produce unnatural incentives. Income taxes versus actual cost taxes subsidize actions of lower income residents no matter the cost to society. Abnormally low-cost mortgage arrangements encourage people to purchase houses, instead of renting. Disproportional transportation costs people to make decisions contrary to collective best interests.

I’m not against the “American Way of Life:” traveling to work in the city from a big house a away in a suburb. I am for government not creating false incentives for people to act unnaturally. As much as possible, consumers of public services should recognize the costs associated with their actions. The paradox of tax is: no matter the intent, it makes people act unnaturally.

Why Sustainable?

2009-05-02T21:55:00.002-05:00

Most often we here “sustainable” in the term “sustainable development.” To answer the question why sustainable, let’s answer the question: “What is development?” Development is creating something new. The purpose of creating something new is to gain an advantage.

Development is using resources to create something that provides an advantage. Past examples of macro development has been power grids, interstate road systems, and government. These systems provide advantages for everyone who participates in the system. Micro development extends into industries, businesses, and people’s lives: i.e. people purchase cell phones to give them an advantage.

Development requires initial investments: the creation of the object. The interstate system in 1956 was the largest project ever undertaken: costing $114 billion dollars (not adjusted for inflation).

The interstate system provided an advantage. Transportation times were shortened substantially. Large trucks are now the backbone of our economy. The advantage the United States received from the interstate system was much larger than the $114 billion dollars invested.

In 2009, the interstate system is a foundation for our efficiency. Original creation of the system was a cost and a benefit for our system. Maintenance of the interestate is a cost, but not a benefit. The entire system does not perform better because a bridge is repaired or replaced. Maintenance does not benefit anyone, except the person receiving payment for maintenance. That’s the paradox of maintenance: it provides no benefit, but it is required to maintain current efficiencies.

With that preface, why sustainable development? The answer: because maintenance provides no benefit. In the United States, we are no longer a blank slate. We have a choice between maintenance and re-creation. Our administration is verbally pushing re-creation with a twist, “sustainable re-creation.”

Schumpeter’s term “creative destruction” applies to wiping out technologies due to advances. American’s would rather create than maintain; we’d rather buy a new car than repair a broken axel. That’s why the administrations fight for sustainable development is so important. New creation and development is easier to sell to American’s than “maintenance.”

However, don’t expect the massive maintenance bill, aka “Stimulus Bill,” to change the marginal productivity of labor. It’s providing much needed maintenance for the current infrastructure; it’s not creating something new, and no advantages will be had.

My Experience with a House Auction in Birmingham

2009-04-27T21:49:00.003-05:00

Today, I participated in a house auction in Vestavia, Alabama. We discovered the auction three days ago. We had the house inspected yesterday. From the time we viewed the house, we began due diligence for the auction.

We found a green ranch style house built in 1960 with good bones, but necessary repairs. It sat on a half-acre lot in an excellent neighborhood. Prior to auction, the house was listed for $139,000—cheap enough to assume financing, and payment. First, we decided whether we wanted the house. My wife had an emphatic “YES!” Actually, she designed the color patterns, and chose appliances from Craigslist. I was more apprehensive.

Next, we began due diligence, which consisted of three steps: an inspection, speaking with the mortgage underwriter, and financial analysis. The inspector told us to plan for a new air conditioning and heating service ($2,000 - $5,000) immediately, and a new roof ($5,000) within a year. The mortgage guy helped us minimize our initial capital outlay. Interestingly, a 5.75% interest rate was more desirable than a 4.75% requiring a MIPS payment of $3,000, an origination fee of $1,500, and a monthly PMI of $100. With the 5.75% mortgage and required payments at closing, and immediate repairs, we found a maximum on the house to be $112,000.

The house had a 5% “service fee” tacked onto the maximum mid. Therefore, our maximum bid was $107,000 (actually $106,667).

With our inspection, mortgage information, and financial analysis, I headed to the auction. I told our real estate agent to kick me if I bid above my maximum price. Five houses were auctioned off, and ours was last. Experience of seeing four auctions prior to “game time” soothed my nerves.

Once ours was announced, I listened keenly. The disclaimer was the same as the four previous, and bidding began similar to the others. Bids quickly ramped up from $10,000 to $40,000, $60,000, $80,000, $90,000. Then silence. Someone was holding the highest bid at $90,000, and the auctioneer asked for $95,000; he got it. Quickly someone else bid $100,000. Pace slowed, and everyone looked around for the next bidder. When he asked for $105,000, I flashed my card. $106,000; someone else. $107,000; I was quicker to bid this time. The pace slowed again. From $10,000 to $107,000, only 45 seconds passed. I remember my analysis—I was at my maximum.

Next a lady raised the bid to $108,000. I waited to give her thinking time. I waited to give me thinking time. I remember my analysis--$108,000 to $109,000 was marginal. The difference between the two was slim. I flashed my card. I had the high bid: $109,000.

Do I want this house? Are there costs associated with the house I don’t know about? Will this wipe-out my savings? Pausing, she bid $110,000. I don’t know how long I had the high bid—4 seconds, maybe. It felt like a minute, and everything became clear.

At $110,000, she and I were the last bidders. My decision prior to the auction determined it was too high for me. I feared buyer’s regret. At $107,000 I was certain. At $110,000, I feared a bidding war that left me standing, and owning uncertainty.

Pressure came, and everyone was looking at me. Auctioneer asked if I would go $111,000? How about $110,500? I shook my head, and the event was over. She won the house for $110,000 (plus a 5% “service fee,” or 115,500).

As I walked away, I tried to answer the question, “Would I have paid $110,000?” All I could think was, “absolutely.”

Relationship of Past to Future and Thought Models

2009-04-25T07:56:00.002-05:00

Future events are more predictable than the past. Taleb stated this in Black Swan and provided good support. Essentially, this point in time could be created by infinite possible historical events. Some historical possibilities are quixotic: the world was created yesterday, and everything is the way it is. Others more rational: over 4.6 billion years the earth created life from a melting pot (which is the debate between creationists and everyone else). Even the recent past, i.e. yesterday, creates infinite nodes on a decision tree, and multiple nodes lead to the current point. Anyone could have done infinite events yesterday, not restricted by resources, time, other people, or environment, and be where they are now.

However, resources, time, other people, and environment bind the future. A person can only get so far today based on resources (i.e. money), time (only 24 hours better get going), other people (“liquidity for one, insolvency for all”), and environment (200 years ago you had a small possibility spectrum). Side note: I’m an optimist, and I believe in stringing together victories for change—not fell swoop, lottery changes to the future.

Past future decisions had more possibilities than current future decisions. Creation of predictive models attempts to tame the future based on collective handling of the future in the past. Past future decisions were based on resources, time, other people, and environment at that point in history.

Failures of models attempt to define collective output of all decisions with a limited number of inputs. Deviation from the future and predictive models occurs due to a change in inputs. Models disregard the current binding input in favor of past correlative inputs.

Bubbles happen when most inputs are found from past data, and perpetual future assumptions are made on this limited set of inputs. Crises happen when a new binding input is collectively found.

In 2007, what was the binding input: confidence, incoming or outgoing money? Economists are largely okay with cramming 2007 into current models, calling it largely accurate, and going forward. Economist’s antithesis wants them hung for not predicting the future.

Economists have shown they are excellent builders of models that match the events. However, they are lousy at determining the actual inputs.

Everyone poorly defines current restrictions on the future. For example, ask someone “What do you want to do?” Then ask them “Why aren’t you doing it?” That person will give a list of artificial restrictions.

Buy or Rent: an NPV of the Birmingham Housing Market

2009-04-12T22:10:00.016-05:00

My wife and I sold our house in May 2008. With our equity, we could afford to set the price aggressively to sell. It was better to sell our house for less, than it was to hold on for a mythical price.

After we sold our house, we moved into an apartment. When selling, the buyer’s agent asked, “Why are you selling?” And my reply was, “I don’t want to be in a house right now.” I can’t say that I foresaw the economic meltdown last fall; my projections were 10% interest rates as the supply money for mortgages decreased. Either way, it was a good move.

Trade-Offs: Apartment v. House

Apartments are cramped, and most “features” of a house are indirect to the features of an apartment. For instance, in an apartment you don’t have yard work, in a house you have to do yard work; the trade-off is a yard where you can play. Other trade-offs include maintenance, cost of utilities, trash, taxes, etc. The costs of a house are explicit, but most benefits are implicit.

Like most personal finance decisions, we have decided we want to live in a house for non-financial reasons. We made the decision based on non-financial metrics, but financial metrics determine our price range and feasibility of living in a house.

Assumptions & Data

As, we are not speculators; therefore, we are not betting on aggressive increases housing price. Remember this when I am talking about owning a house, and appreciation.

We will start with our known information and assumptions:

Principal on House	$120,000.00
Rent	$830.00
Interest Rate	4.85%
Mortgage Months	360
Tax Rate	12.00%
PMI Rate	1.00%
Pay PMI Until	20%
Variable Utilities (House / Rent)	50.00%
Property Taxes	1.00%
Repairs (Mortgage Payment)	50.00%
Rent Increase	2.15%
Corporate Bond Yield	6%
Growth of House Value	1%
Closing Costs	3%

Currently, our rent is $830, marginal tax rate is 12%, monthly variable utilities average $215, and fixed utilities average $100. I’m using the corporate bond yield of 6% to discount the costs. Marginal tax rate is included because of the beneficial treatment of mortgage interest by the IRS. I'm using 6% discount rate because I can receive that on a relatively safe bond.

One bit of contention is the 2% growth of house value; it is the long-term growth of housing values—-I read that recently somewhere. Include anticipated repairs and upfront repairs that must be made prior to move-in. Monthly repairs of "50%" assumes costs are half the mortgage payment, which is a best guess. Owning would significantly outweigh renting if no repairs were needed.

Findings

First, buying a house with a 30-year mortgage is not a positive NPV project.

Given the assumptions above, the following NPV’s exists for renting and owning after the following durations:

	Buying	Renting
1 years	($19,315.04)	($13,381.76)
5 years	($73,679.56)	($61,384.46)
10 years	($126,077.78)	($110,696.20)
20 years	($191,423.27)	($182,415.45)
30 years	($231,285.04)	($229,245.59)

Throughout the duration of the project, renting always has a higher NPV than buying. From year 1 through year 20, renting actually has gains on buying. Only from year 20 through year 30 when principal has been reduced, does buying gain on renting.

I've heard people claim, "At least with owning a house, you receive a check when you leave." If he rented and saved the rest, he would have more money than the closing check. Seeing that most people are moving houses less than every 10 years, most are making poor financial decisions.

Outcome

In order to maintain our current economic position on housing, we cannot buy a $120,000 house. Also, the value of housing is a function of time, and the indeterminate market value of the house. As people have recently found, the owner receives the benefit/detriment of changes in house prices.

We continue to look for houses, but I don't expect to make any money in the process.

Got a Team

2009-04-09T16:55:00.002-05:00

When my uncle played ball as an eleven year old, my grandfather took the role of coaching. He didn’t participate in the original draft; due to each team having too many players, the league created a team, and he was given players from other teams. Since he didn’t choose the players, he received the worst players from every team. Each of them could have easily played right field for any other team—in little league, right field was the position for people who were rotated in to play the minimum number of innings.

To make it fair, the other coaches had given him first pick on equipment. “To choose a wooden bat, you don’t just go up and grab it. You hold the fat end of the bat, and tap the handle on the ground.” When he told this story, it was always the occasion we had a wooden bat, or an object equitable to a bat—a stairway baluster. He would demonstrate with the bat how to tap lightly, “you should that ‘ping.’ That’s when you know a bat has pop.” He could always find a solid piece of material to have that right high-pitched sound.

After they chose the equipment, he would begin with the story of crafting a team. “They were ragtags. Half of them hadn’t played baseball before. The first thing I'd do is make them hit baseballs out of the bushes.” He showed me how to hit in bushes—ruined some good azaleas. “I would put a baseball on a limb, and they would hit it. We did that for house a day.”

When I was twelve, we had a Cinderella season, and ended up in the championship series. He took me to the azaleas out front, and I hit baseballs the week before the series. I had a hit every at bat that series, except one: it was a liner to the second baseman.

“Why didn’t you hit off tees?”

“There was an endless supply of bushes—we’d tear up too many tees. When someone struck out, I’d send them to hit off the bushes. We’d practice from three o’clock in the afternoon to dark every day. Next, I needed a pitcher. There was one kid with two left feet—he had two left feet. He could hum that ball.” He’d make a pitching motion with his arm—you’d see his longer finger nails wrapped around the imaginary ball.

Preaching Circuit

2009-04-07T09:55:00.003-05:00

Mitchell’s head was hard as steel. Legend has it; he killed the mountain goat in his office by ramming it. An asset that rivaled his will was his ability to place events in chronological, cause-effect relationships. As an ardent dissident of every official of the United Methodist Church (UMC), everyone who would listen heard him call it a “Preacher’s Union.” UMC brought changes to the local church, and he decided long ago those changes were lacking.

“You know why we have a fifth Sunday night singing?” Standing outside the church after we’d sung hymns from the red book, Mitchell asked a rhetorical question and didn’t expect anyone to answer.

“Before this church was United Methodist, we had a preacher that would travel on a circuit of four churches. We couldn’t afford a full time pastor, so we split one. On Sunday morning he would have services from nine in the morning to one in the afternoon. Sunday nights, he would rotate between churches. First Sunday night he would be at Iron City; second Sunday night he would be over the mountain; third Sunday night he’d be here. When the fifth Sunday night rolled around he would be off, and the churches would join together to sing.”

The Swimming Hole

2009-04-06T13:25:00.003-05:00

I’d grown up going to my great-grandmothers house; the same one where my papa grew up. We called the area “Rawhide,” but we were the only ones I’d heard call it “rawhide.” My papa told me stories about living over there, and I’d just imagined the woods. My mind transposed him into some woods I’d been in.

One day, we were heading up to my uncle’s on a winding road. Rawhide sat on top of one major hill and two minor hills which abutted each other. The three peaks of the hills were arranged in a triangle, and the winding road weaved through the bottom center of the triangle, and back up to the top of the hills. As we reached the low spot, my grandfather pulled over.

“Come on.”

“Where are we going?”

“Gonna show you were we played. It’s right down here.” He pointed as we walked off the road, through a thicket. Thirty five yards off the road, it opens up.

“This is where we’d swim.” Didn’t look much like a swimming hole, just wet leaves.

“It was 10 feet deep, and about 15 yards long. Leave’s must have filled it in.” He pushed some leaves out of the water, and clear water sprang up to replace the leaves. A spring gushed in the middle of the hills.

Location of the Spring

Old 78

2009-04-06T13:16:00.002-05:00

“When we were younger, we lived on 78.” Ned pointed the direction of the highway, going left out the church doors a quarter mile down the road. “We owned a convenience store. 78 was gravel then, and people would travel between Birmingham and Atlanta. I remember when Bama played Georgia Tech, good number of folks traveled to see them.”

Going away from Birmingham on 78, you’d run up a hill just past Anniston. “As far as we were from the hill, people were getting on it going toward Birmingham.”

I’d seen a stone building on 78 near the location he’d pointed earlier. I’m not sure if that building was the store, but I assumed it was. The buildings sandstone façade looked old enough.

“One day, young man came down the hill; he was hauling. 78 was gravel, and he lost control. We were playing outside when he ran off the road. Across from the store, there were some low-lands that held water. He ran off into the water; we ran down to him. I held his head out of the water. He was bleeding, and we drug him up to the road.”

“You know he just laid there and died. We tried to make it comfortable for him.”

Location of the Store

The Bridge

2009-04-05T00:52:00.004-05:00

“We were getting close to a mine,” being a kid, I had no idea what that meant. “The ship rolled on waves whose peaks put the mine at deck level. “

“What’s a mine?”

He pressed his thumb to his forefinger, measuring off three and a half inches as he did when we were fishing, “It was a ball of steel with spikes sticking out. When those spikes hit something it blew up. It was too close on us for big guns, and everyone was getting tense.”

“Winslett! Get your gun and get up on the bridge! I ran up there, as the mine slid closer to the hull. I aimed at the spikes,” he held his finger up again. His long nails gave his finger an extra inch.

“I got my 30-06; ran up to the top. Aimed down at the mine with my iron sights. The target was bouncing on the ocean. I missed it the first shot, reloaded and WHOOOM! Ocean water shot all over the deck.”

The Origins of the Urban Crisis: Race and Inequality in Postwar Detroit

2009-03-24T11:16:00.005-05:00

The Origins of the Urban Crisis: Race and Inequality in Postwar Detroit by Thomas J. Sugrue. Princeton University Press, New Jersey (c. 2005).

World War II gave American race relations an opportunity to choose a new path. During the war, Detroit powered the American army, and stood atop the nation as the symbol of industrial ability. Land, labor, capital, and entrepreneurship primed the pump that fueled Detroit. Every player in the economic boom pursued his maximization of utility. Status quo of the city provided this maximization of utility at the expense of African Americans. Thomas Sugrue, in The Origins of the Urban Crisis, highlighted the city’s massive expansion, thirst for resources, and policies that fed its fall. Detroit’s maintenance of the malfunctioning standard, instead of pursuing sustained innovation, led to the collapse of the city.

During the creation of Detroit’s industries and, more acutely, during World War II production, labor shortages brought higher wages for the city’s manufacturing jobs. Well paid workers, in order to control wages, created an artificial labor shortage with discrimination and segregation. Managers provided excuses for the segregation, saying they “feared that white workers would strike or lose morale if the color line were breached” (93). Union leaders stated support for integration, but acted oppositely. At union shops, “disproportionately few blacks held union posts” (101), while “on the national level, the UAW was on the cutting edge of civil rights” (100). In 1955, Michigan passed the Fair Employment Practices Law. Employers exchanged explicit discrimination for disparate impact: “prospective workers found their way to the union through references from friends and relatives. Here, housing segregation reinforced hiring discrimination” (107). White control over wages was founded on control of labor supply. Once employees asserted groups of individuals were inferior, the labor supply was halved and wages forced upwards. The system rewarded every white person with greater opportunities than half the population. Marginalizing African American maximized these rewards for white workers, and “patterns of discrimination fluctuated depending on the relative supply of black and white labor” (122). As workers maintained artificially high wages, Detroit’s industrial costs soared and “employers left industrial centers with high labor costs for regions where they could exploit cheap, nonunion labor” (138).

Discrimination of African Americans in the workplace diffused into society. Even segregating neighborhoods created shortages for white and black living spaces. Vultures of society maintained status quo because segregation provided a benefit. For real estate agents, threat of integration created artificial turnover:

"Blockbusting" real estate brokers, as they came to be called, offered real opportunities for blacks, while sowing panic among whites. Working both sides of the embattled racial frontier made a lot of real estate brokers rich. (195)

Real estate agents received higher compensation from protectionist neighborhoods assaulted by rumors of integration. Shrewd landlords extorted black tenants living in dilapidated neighborhoods with excessive rent and destitute conditions. Individuals maintained the dual systems because they maximized utility. Two artificial markets, employment and housing, allowed deficient individuals to assert superiority over half the population with an easily distinguishable feature: skin color. Using segregation, individuals scrambled for larger pieces of the flagging industrial complex, and, doing so, thwarted an innovative, entrepreneurial future.

Sugrue argues that Detroit’s economic foundation of and federal funding of segregation premised a collapse. Companies received greater gain when they deserted the artificial markets of Detroit. The tone of Origins of the Urban Crisis exposed the author’s passion for examining urban blight. Comprehensive sources included community council memorandums, FDR speeches, US social-political dissertations, newspapers, and time period surveys. Surgue constructed the sources into a profound statement: Detroit’s fall was evitable. Government, society, businesses, unions, and education failed to provide positive direction to establish the city as a reigning industrial powerhouse. Each player acted as if the outcome was a zero-sum game.

After writing my review, I read about the Nash Equilibrium. Asymmetrical information and violent defense of the status quo in the public sector created a stalemate for Detroit. No group gave ground for the fear of being trampled. These groups eventually made it inhospitable for business in the city. In the end, the entire city was trampled.

Citibank Indonesia

2009-03-22T17:57:00.001-05:00

Written with Mahendra Madhavan for a case study in our Global Financial Management course.

Thesis

Citibank must answer questions regarding its purpose within Indonesia. Bank headquarters has requested higher net incomes, augmenting a currently aggressive budget. Citibank’s quest for higher profits could negatively affect the bank’s long-term leadership in Southeast Asia.

Overview

Citibank expanded into Indonesia in 1968. By 1983, the local Citibank official in Indonesia, Mr. Mistri, maintained a profitable division which tracks the growth of the country. Attaining the profit growth correlation with the Indonesian economy was an original reason for expansion into Indonesia. The government of Indonesia had requested international banks to make the foreign direct investment to increase human and financial capital. In 1983, Citibank corporate managers increased the Indonesia’s after-tax profit goal by $500,000 to $1,000,000. In pursuit of these goals, the local Indonesia Bank officials based decisions on diverse risks, regulatory restrictions, local growth and competition, and personal compensation.

Investment Risk

Due to corporate business controls, local bank officials are allowed maximum exposure to a country, but may exercise an ability to stay lower than maximum. These controls are set by collaboration between corporate and local bank officials. While the acceptable sovereign risk derived with the budgets, the risk limits are available prior to the budget process. By fixing acceptable sovereign risk prior the budgets, the probably income can be setup dependant on risk, and risk independent of desired income. However, if the risk review was not complete prior to the budget, the company risked an adjustment game of tweaking budget and risk levels instead of making solid analysis.

In 1983, when corporate bank officials pushed down an increase in net income, they did not provide any guidance for increasing risk, nor make adjustments to the weighted average cost of capital. A CAP model states an increase of reward is accompanied by an increase in risk. When corporate officials increased budgeted income arbitrarily without respect to risk, they degraded the previously accepted budgeting process. Citibank corporate officials should provide a dialog for corporate and local officials with regards to the desired risk and return characteristics from the region.

Economic Risk

Citibank had achieved one of its major goals in Indonesia of sharing in the growth of the Indonesian economy. Between 1968 and 1983, nominal GDP averaged 27% growth. However, real GDP growth only achieved 7%. If purchasing power parity held with respect to translation rates, Citibank should have achieved 7% over the same period. Assuming the original, aggressive budget was in line with expected real GDP growth, any addition to the net income would defer from original business strategy in Indonesia.

Due to Indonesia’s natural resources, expectations were negative because of short-term, falling oil prices. The GDP of the country for the coming year was uncertain. An increase in sovereign exposure during uncertainty gives Citibank less certain outcomes, but could mean exceptional growth if the country does perform well. If Citibank presses increased profits from Indonesia, it will increase its risk in relation to the local economy, and may not achieve profits.

Competition & Conflict of Interests

Citibank has provided increased training for human capital within the banking sector. An increase in capabilities has increased the knowledge of the entire sector, and increased competition. Higher degree of banking sector knowledge and skill calls for higher compensation packages which decrease profits. Competition for staff with local banks also pushes up compensation. Furthermore, a cultural flight from being trained at Citibank to employment at a local bank creates a political dilemma for the transnational bank. The increased competition pushes costs higher, and revenues lower. All the while, the Indonesian government has very defined roles for the foreign bank.

Bank compensation and bonuses are derived from budget versus performance measures. Since local bank officials wish to maintain bonus levels and the future is uncertain, there is a propensity to set the budget bar low. Mr. Mistri set a slight increase in revenue and a drop in profits. He considered this budget “aggressive,” but other facts from the case would call his budget “soft.” Competition could cause higher costs and lower revenues, but not to an extent to lower profits. Citibank’s Indonesian income, which correlates with the GDP, should not be negative unless real GDP is negative. Mr. Mistri appears to have set a low watermark that is easy to achieve, and will maximize his bonus.

Regulatory Restrictions

Since Citibank is a foreign bank, it lacks ability lobby the government. Furthermore, since Indonesian banking is still developing, the government imposed strong restrictions on foreign banks to prevent them from creating a tilted balance of payments. These regulatory restrictions and expectations of foreign banks limits Citibank’s expansion. It must conform to the government’s expectation, and remain within the confines of Jakarta.

Options

Reduce / Eliminate Prime Government & Corporate Loans Mr. Mistri could accept the budget changes and make changes to the investment allocation. By removing portions of the prime government and corporate loan portfolio, the bank could make riskier loans which should increase profits. Any move to reduce this portfolio would be outside the expectations of the Indonesian government, and could cause political backlash.

Increase Principal Invested / Value-at-risk in prime loans Citibank could increase the principal investments of prime loans and increase notional interest earned. Internal controls support this action because the bank currently invests less than the acceptable sovereign risk in Indonesia. These actions would lower target return on assets and return on equity for Citibank within the country, because prime loans would achieve less than 1.25% and 20% respectively. Political risks also accompany this decision: an increase of capital inflow would negatively affect the balance of payments, which Indonesian government had been working hard to stabilize.

Search for New Sources of Revenue Citibank could search for new sources of income. Developing a new market for current products would increase sovereign risk. Finding new ventures and establishing relationships would increase costs, and could provide limited results. Regulation has limited Citibank’s expansion possibilities, and any expansion would be limited to Jakarta proper. Since the bank has operated in Jakarta, it would have to take riskier loans to provide sources of revenue.

Change Nothing Mr. Mistri could make no changes to operating procedures. Such action would increase risk to Mr. Mistri within Citibank. By accepting changes to the budget, yet not making changes to the operating plan, his employment is tied to a recovery of the Indonesian economy.

Resist Changes to Budget Lastly, Mr. Mistri could resist changes to the budget. During his tenure at Citibank, he has established sweat equity and gained promotions. He has established himself as a leader, and has been rewarded for it. He could resist changes to the budget, and provide an insightful rebuttal outlining the flaws of the increased budget requirement: any increase in the net income expectations should be accompanied with a dialogue regarding expected risk.

Follies of the AIG Tax

2009-03-19T15:25:00.002-05:00

H.R. 1598: The AIG Key Executives Bonus Accountability and Capture (TAKE BACK) Act

To amend the Internal Revenue Code of 1986 to impose a higher rate of tax on bonuses paid by businesses receiving TARP funds.

Today, the House passed the bill enacting a 90% tax on all income from bonuses greater than $250,000 from a company that received greater than $5 billion in TARP funds. Such action assumes every person who received a bonus at AIG did not deserve the compensation.

A government should never have the ability to decide an individual is “unacceptable” for high compensation. If passed by the senate, I believe this tax will be tested in the court system and overruled. It’s a tax with punitive and vindictive motives, and targets a specified group of individuals. I consider a person’s right to earn a market wage is as strong as his right to speech.

Euro Disney or Euro Disaster

2009-03-17T15:03:00.002-05:00

Written with Mahendra Madhavan for a case study in our Global Financial Management course.

Thesis

For Walt Disney Company, Tokyo Disneyland failed. The arrangement for the Tokyo theme park capped profits for the Walt Disney Company. Blinded by the success of its first international theme park and failure of the profit, Walt Disney Company was focused more on declaring a profitable arrangement, than asking the marketing and financial questions that would lead to success.

Why Euro Disney did not succeed in Europe?

Euro Disney failed on many fronts. Walt Disney Company lacked understanding of the culture in Europe. Europeans, with 4-5 weeks of vacation, took destination trips, usually by airplane, on their work vacations. This cultural norm contrasted the easily accessible location Disney chose. Europeans did not consider Euro Disney a vacation spot; only, a place to spend a day. Location failure reduced the revenue generation inside the park, and the destination appeal of the park.

Modern imperialism consists of export the culture. American culture replaced prime French farm land with Euro Disney. French intellectuals considered the park a threat to future generations, who would lose their cultural identity and start speaking in English. Sensationalizing the cultural failure, some called it a “Cultural Chernobyl”.

Europe’s most severe recession since World War II, lead to an inopportune opening for Euro Disney. Furthermore, the strength of the French currency deterred Europeans from converting to the franc. The combination of the recession and currency exchange curbed spending by international travelers. During the 90s, currency situations in Europe created complexity for Disney. Either the park would manage desired exchange rates or settle on one currency.
Euro Disney and Walt Disney Company capital structure guaranteed profit for the Walt Disney Company, and drained the cash flow from Euro Disney. Walt Disney Company’s 49% equity stake, favorable royalty and management fees with scheduled increases was advantageous even if Euro Disney did not turn a profit.

Enormous interest charges on US$ 3.56 billion in debt arose from the highly leveraged capital structure with various creditors, including: syndicate of 60 international banks and, the French government. Adding to the weight of debt, construction was over budget by 30%. In the end, Euro Disney reported a $900 million loss in the first operating year. Debt restructuring two years after completion of Euro Disney, lead executives to admit original business plans have “weaknesses”. The royalty and management fees and debt service sapped the life out of Euro Disney.

Why Tokyo Disneyland succeeded?

Tokyo Disneyland was the first international theme park by Walt Disney Company outside of the United States. Built on a reclamated land east of Tokyo Bay, unlike Euro Disney, it was a phenomenal success.

Opening of the park coincided with the introduction of five-day work week in Japan and a strong, growing economy. Culturally, the Japanese were spending more time on leisure activities. Tokyo Disneyland became the symbol of a new a Japanese lifestyle – enjoying free time with friends and family rather than constantly working.

Disney cartoons and films were extremely popular in Japan and 200,000 Japanese visited Disneyland each year. Tokyo Disneyland made it possible for Japanese to visit the park without traveling to California. In addition, the fortunate location was accessible for 35 million Japanese within 90 minutes of driving distance. Contrary to Europeans, Japanese vacations were short, which made Tokyo Disneyland a successful tourist destination.

Tokyo Disneyland was designed for adults, particularly young couples. Prices were steep ($40 for adults), but the families sacrificed other activities. Enormous revenue generation paid off the debt in three years. Through the first ten years of operation, Tokyo Disneyland’s sales and attendance figures rose steadily.

What can be done to make Euro Disney a more profitable park?

Sales and Marketing. A growth strategy for the park would only be successful if it provides substantial increases in revenue. Pro forma statements from 1995 to 1999 (see attached) show the park must double revenue to approach profitability.

To do this, Euro Disney should modify the sales strategy to suit Europeans. At the time, individuals relied on travel agents and tour operators, which Disney had largely neglected. The company must actively cultivate relationships with tour operators to increase sales. In addition, marketing strategies must encourage tourists from neighboring countries to visit Euro Disney. Recent surveys indicate the German market accounts for 8% of visitors, 40% from France, 18% from Benelux (Belgium, Netherlands, and Luxembourg) countries and 15% from Britain (Ref. 1). The increase in visitors does not translate into profits; however, more foreign visitors will lengthen the average stay. Increasing length of on-site stay does translate into more auxiliary revenue: meals, rooms and Mickey Mouse ears. Profit doesn't come from the theme parks but from high-margin businesses such as hotels, restaurants and shops.

Increasing marketing and sales is a highly risky strategy. Recent gross margin is about 30% (see Normalized Income Statement), and the most recent figures show the net loss to be greater than the total revenue. Any impact on the top line carries greater costs in sales, general, and administrative, and will reduce gross margin.

Capital infusion / Walk away. Walt Disney could provide a capital infusion for Euro Disney. This action will not find approval from the shareholders of the Walt Disney Company; which essentially would prop up a separate legal entity, Euro Disney. Walt Disney Company’s cultural norm is a shareholder approach, but Euro Disney exists in a stakeholder environment. The French government, a syndicate of European banks, the French economy, and among others are stakeholders. This stakeholder approach eliminates Walt Disney’s ability to allow the park to go into receivership.

Coasting. A third alternative is allowing the park to generate a breakeven revenue. We termed this approach “coasting.” It saves face for the Walt Disney Company; hence, preventing the image of “Walt Disney” from being hurt internationally. To default on the park or continued failed expansions will damage the reliability of the company, and prevent future international endeavors in the BRIC (Brazil, India China) economies.

References:

1. http://www.time.com/time/magazine/article/0,9171,901020325-218398,00.html

Arc of Justice

2009-03-17T14:34:00.001-05:00

Arc of Justice: A Saga of Race, Civil Rights, and Murder in the Jazz Age by Kevin Boyle. Kevin Boyle (c. 2004).

Racial storylines cut through time and geography of American history. Kevin Boyle’s Arc of Justice traced segregation from the destination to the source. The author’s construction of characters and segregation defined a solitary outcome that ensued in the streets, and then in the courtroom.

Boyle structured the narrative of the 1925 fight against real estate segregation as a culmination of events. The narrative centered on a house with African American owner-occupiers in a white neighborhood of Detroit. A mob, which contained experienced segregationists, surrounded and assaulted the house. The mob hurled rocks at windows and bricks at the walls. To halt the mob, African American tenants fired shots and struck two white men, killing one. After loading the house’s occupants into a police vehicle, the author filled in the back story.

First, Boyle described Ossian Sweet. He was an African American doctor, who purchased and began to move into the house on Detroit’s Gardland Avenue. Armed with the arsenal of men and weapons, Sweet prepared to be assaulted. Sweet’s preparation derived from his childhood experiences, college doctrine, and events of the previous summer. Sweet’s grandparents lived through the bonds of slavery and the hope of reconstruction. His parents battled with the constitution of segregation. Sweet’s own life challenged the opaque ceiling of segregation. As a child in South Florida, he witnessed barbarous acts against his race. At college and medical school, W.E.B. Dubois encouraged African Americans to violently fight for their place. After graduation from Howard University medical school, he setup a profitable practice, and traveled the world. By the summer of 1925, Sweet established himself as an elite member in Detroit society. The same summer saw violent ejections of African Americans from their homes in whit
e neighborhoods. When Sweet moved to a white neighborhood, he prepared to defend his house. However, Sweet’s goal was not to shoulder the race; to him, “it was partly the way that discrimination struck at the professional pride that he was so eagerly embracing” (93). Antecedents built his stoic character with a yearning to be admired.

As a character is introduced, the author told the background of the individual. Lawyers, NAACP leaders, blue-collar workers, and police officers became caricatures of the author. Each had abnormal traits expanded to the point of predictability. As a rhetorical, flirtatious lawyer, Clarence Darrow wound his six hour closing argument, and discovering his wife was not in the audience, moved closer to his newest mistress. Working class Caucasians were stereotyped as a powerful mob composed of weak units. The white mayor and judge were characterized as politically savvy, yet gutless. Each man skirted the edge of defending Sweet. No matter the outcome of the trial, the positions taken by the mayor and judge allowed them to side with the victor.

Arc of Justice’s greatest strengths were the stories behind the creation, maintenance, and vulnerabilities of segregation. After of the Civil War, Reconstruction took on a feverish quest for reconciliation. Commercial interests of the Republican Party encouraged justice to unfold for African Americans. Freed slaves benefitted from actions of “political opportunists more interested in bringing northern business interests to Florida—and fattening their wallets” (53). From the south, hot on the tails of African American migration, segregation spread northward. Powerful individuals ensured their commercial and power structure through segregation. Real estate agents, blue-collar workers, and politicians created dual marketplaces to maximize their commercial gain. Everyone who profited from segregation “knew how to be cruel. But they had to create a social system premised on cruelty” (55). Ossian Sweet journeyed the path prescribed by the African Methodist Episcopal Church: “by their accomplishments, they would force whites to acknowledge their equality” (51). Sweet challenged the institution as an honest man clearing more hurtles and achieving more than the violent offenders sustaining segregation. His achievement was his brick to the window of segregation.

Boyle’s writing had a varied pace, and indulged in speculation. When writing of assaults, concise phrases conveyed quickness. When writing the history of Darrow, longer sentences slowed the message. To move quickly, he cited headlines, and memoirs to move slowly. In order to delight the story, narrative license seeped into the authors writing. To discuss tactics the legal defense may use, Boyle riddled a paragraph with no citations and the indefinite terms “could” and “might.” Speculation confused the history, but excited the story.

Hierarchy of Gym Bags

2009-02-06T09:31:00.001-06:00

People with the urge for upward mobility need to examine all aspects of the complete individual. As offensive as eating lunch in the break room, executives shun an individual who drags workout clothes around in rudimentary material. Obvious containers of clothes that do not fly are Wal-Mart sacks, and the not so obvious are mesh bags.

The perfect pitch is a hearty leather, rectangularish bag, which looks like it was made in the 13th century. Any bag less than 20 years old lacks pedigree. Having pedigree are men nearing retirement age, and they hold the keys to your progression. Recently, older gentlemen at the Y have passed down their gym bags. Recipients gain favorable locker locations, new squash partners, and secret meeting times.

Here is the deal. You need something leather, something old, and something rectangularish. The rectangularish must be petite, about eight inches tall, and twenty inches long, and have good structure; sides must be stiff enough to stand up on their own. A petite bag is not a Honda Accord; it’s a 3 series BMW: sleek, functional, and distinguished. The structure is the most necessary feature. The sides have to be rigid, which is a feat with older leather. Care must be taken when cramming items in the lockers: don’t collapse your bag; it could be catastrophic for your career.

Lastly, the condition of the leather is paramount. Get some nice leather conditioner to ensure that old, new look. You need some creases in your bag to show that you go to the gym on the required Mondays and Thursdays: Wednesdays are optional, and Fridays are out, that’s when real top notch workers cut out at lunch.

On Luggage.com the perfect example of a gym bag states: “The classic design and high quality leather of this Leather Gym bag will make going to the gym a pleasure.”

The Cholera Years

2009-02-05T10:22:00.005-06:00

The Cholera Years. Rosenberg, Charles E. The University of Chicago, 1962.

Human nature, without probing, settles into the path of least resistance. In Rosenberg’s The Cholera Years, cholera probes individuals to make abnormal decisions with abnormal information. Each person develops his limited choices based on trust, knowledge, experience, and personal resources. Collective choices expose the backbone of the evolving American culture of the 19th century.

Cholera afflicted the United States in 1832, 1849, and 1866. The second incident of 1849 duplicates the failures of the first. Each epidemic begins with headline deaths in Europe; strangled with complacency, the American public failed to implement a cohesive defense. Quarantines, religious gestures, archaic medicine, and ineffective government actions plagued the first two epidemics.

Lacking notable results, government, science, and religion institute ineffective, half-hearted efforts to prevent the spread of cholera. Government, being politically motivated, sways its allegiance between science and religion, depending on the leader and constituency. Headline text and public panics of impending epidemics sparked dormant municipal boards of health to become active. These boards were politically appointees, mostly laymen (20), whose defense “consisted almost entirely of enforcing quarantine” (19) and city-wide cleaning. When initializing the city-wide clean up, efforts that “represented the best medical opinion at the time” (23), boards lose fortitude quickly. Eventually, only the least despicable areas are treated with more than a layer of quicklime. Due to the political nature of these boards, “premature diagnosis of an epidemic disease would mean severe loss the city’s business” (19). Government entities are ineffective in pursuing actions if they provide marginal results.

Medical practitioners dismantle their respective status in society from 1832 to 1849. Ironically, “few physicians were able to admit . . . that they could do nothing for a well developed case of cholera” (67). Physicians apply poisons as treatment, and apply them liberally: “calomel, a chalky mercury compound” is applied until gums become suppurated (66). Slaves and those in poverty severely distrust medicine; “one such practitioner, hearing that cholera impaired ‘nervous sensibility,’ poured boiling water on the legs of a Negro man” (60). Government deregulation of the medical practice allow many without practical knowledge to become licensed physicians (155), and many citizens resort to “do it yourself medicine” (71).

Christianity fills governmental and medical voids of knowledge and action. Evangelicals, seeking to commandeer public action, request government to impose “fast days” (47). Fanatic Christians see cholera as the gardener that separates the weeds from the wheat. Cholera demonstrates “to man the power of the Lord” (43). Religion fills the void of scientific knowledge and government action because it has a cause and a cure: the Lord. Formalized Christianity loses significance as the 19th century progresses, but harsh rhetoric continues. In the end, survivorship bias shapes each person’s reason he lives.

The vicious seemed merely to have been hardened in their depravity, though the spiritually minded Christian was confirmed in his faith (39).

In 1866, government equips its actions with science and the two provide results. “Physicians had tried to cure cholera; 1866 had shown them their duty was to prevent it” (212). A quick sanitization of an infected person’s excrements halts the spread. New York City’s Board of Health mobilizes teams with a cause and preventative measure. Due to this containment, cholera, which was “a rod in the hand of God” (43), is now an explainable, preventable disease.

Rosenberg exposes many of the cultural norms prevalent in modern America: quarantining of classes, distrust of cities, political and commercial motivations of government, individualism, and “not in my back yard” protectionism (NIMBY). American cities have places for everyone, and each person is supposed to stay in his respective space. In 19th century New York, the poor had Five Points; when the wealthy with resources left the city, the poor remained on Orange Street. American cities are quarantined by economic status, cultural origins, skin color, and religion. Christianity grounds the distrust of cities. A city is a breeding ground for sin, each a modern Sodom. To purge the earth, God’s new sulfur is cholera. Individualistic outlooks and a strong internal locus of control stagnate community effort in helping victims. Cause for cholera is attributed to the victim, “as a very general rule, when a man gets sick it is his own fault” (150). Therefore, to contract cholera is considered a learning and growth experience. Lastly, a NIMBY mentality pushes 19th century communities to perform irrational acts of protectionism. When cholera hospitals were erected, “neighbors resorted to everything from humble petitions to arson in their efforts to have them removed” (94).

Rosenberg’s loudest statement in The Cholera Years is against the current treatment of poverty. Euphemistically chiding religion and government over the cholera outbreak serves as an indictment of the modern treatment of poverty: “the vice, filth, and ignorance that bred poverty nurtured cholera as well” (133). The author’s indictment is not of the 19th century conditions, but of current conditions. “Millions for defense was a national boast. Yet, charged a committee of the New York State Legislature, Americans ‘grudge the cost of protection against a destroyer more fearful than any mortal foe’” (145). Christianity has had two millennia to stop poverty, and failed. The United States will only overcome poverty with science and prevention.

Rosenberg’s writing is redundant, with slicing antecedents of sarcasm and the macabre. A sarcastic tone reflects the absurd thoughts of the day: “by mid-October, the medically sophisticated had already begun to notice forerunners of cholera in the atmosphere” (102). Macabre scenes depict the dehumanization of the dead: “Three bodies, one male, two female, lay on the floor, a few rags separating them from the decaying earthen floor” (106). Before the revelation of the cause, Rosenberg’s writing feels redundant, almost ten times over. This redundancy enhances the reader's cathartic experience as the author reveals the method of prevention.

A Formula for Writing: Verbs Control the Stage

2009-02-05T09:49:00.004-06:00

Choose to use verbs with impact, description, and consolidation. Apply forceful verbs to forceful events, flaky verbs to flaky events. Connotations, the verbs side kick, provide more description than the simple action. Each action contains one verb that could stand by itself to describe the event: find it.
When singling out the verbs in a paragraph the idea should be understood (just not who).
Emphasize verbs: these hinges of the sentence determine more than the actino of the sentence. Each sets a tone and rythm for the reader.

Examples

Original Sentence: "In 1866, government action was equipped with scientific knowledge that provided results."

Analysis: "was equipped" is a passive phrase, which forgets to tell the reader "who" did the equipping. Instead of making a statement, the phrase states a rhetorical question.

Refined Sentence: "In 1866, government equips its actions with science and the two provide results."

Outcome: The sentence no longer leaves questions open regarding how events happened. The refined sentence removes "Government action," and now we know "government equips the actions"

Did Bernanke See His Shadow?

2007-08-20T06:36:00.000-05:00

The elusive Federal Reserve chair saw the shadow cast by the current lack of money in the economy. Eight hours later he saw markets finish sharply up, and it cut at the heart of what he wanted to happen.

Market movers immediately took into account the discount rate cut as a lower cost of doing business over the foreseeable future. Financial sector leaders jumped not because of better market conditions, but because of lower expenses.

To analyze the condition of the economy don't look at how the market moved; look at the why it moved. It moved because negative elements (expenses & interest) won't be as bad. Negative elements affect the economy no longer than the memory of the previous rates by the market movers.

Gains from Friday will be wiped out by Labor Day.

It's a Simple Game: You Throw and You Catch

2007-08-15T21:12:00.000-05:00

“Okay team, back to the basics.” Have you ever failed and had a coach tell you to return to the basics? It’s a simple game: you throw and you catch. For investors it’s back to the basics. Look at the ratios; look for solid companies; look to hold stock like your grandparents (the grandparents that believed in stocks). Don’t do any funny investing or doubling down, no tactics or strategy, and not anticipating. Just buy and hold.

Wall Street Makes Money on Volatility
Would you take a .04% increase in the stock market everyday? What if the DJIA gained 5 points everyday, and the S&P 500 gained .56 points everyday?

This yearning for stability would would make most people doubt my ability, but a .04% daily gain would turn into a cool 15% in a year. The next question is why does the market not move smoothly?

It’s because investors are people. The collective Wall Street movers accelerate toward a particular strategy, and a particular outcome. Wall Street keeps up with the Jones more than the typical upper-class high school student. Numbers have to match / beat your compatriot’s numbers.

We (personal investors) don’t make money on volatility.

Derivatives & ETFs
To stay with our theme of “basics:” the farther we get from the company and people making money in a company, the harder it is to put value to a particular fund. ETFs are a derivative: their value is derived not from the value of a company, but by how people feel about the value of a group of companies.

Deal directly with stocks, or mutual funds whose value is directly related to stock. The farther removed from the people making money for the company, the more risk you introduce.

Sub-prime
I’ve heard the term “sub-prime mortgages” for the cause of all types of events, even why it’s 105 degrees in the South this summer. However, sub-prime is not the problem. I’ll leave you with this:

The market conditions are like a house that has a gas leak. The house fills up with gas. Sub-prime mortgages are a spark. The house blows up, not as a result of the sub-prime mortgages, but because of the other conditions.

The Infusion

2007-08-12T11:54:00.000-05:00

How can the Federal Reserve prop up an industry for a 5% loss after a 25% gain over the past year? The Federal Reserve just helped extremely wealthy people in that work on the Street keep the dream of a bull market alive.

How can the Federal Reserve lower interest rates after it said that it wouldn't lower interest rates? The Fed controls interest rates not by attaching a number to lending, but by insuring the money supply is at the correct level needed to achieve a particular interest rate. They increased the money supply, which effectively lowered the interest rates.

Is the Fed worrried about inflation, really worried about inflation? The stock market is inflated, and the infusion of cash will further inflate the stock market.

Watch what the Fed does, not what the Fed says. The Fed is worried about the big time investors packing up their toys and going to other markets.

Stocks should rally for the next week.

The major question now is: has the market factored all credit worries into the value of their stocks? Look at the market since the first sign on Feburary 28th, I would say the market has some more factoring to do.

State of the Markets

2007-08-06T12:11:00.000-05:00

The 500 lb gorilla in the room that few talk about is not tied to sub-prime mortgages or the financial sector fall-out, but the inflation in stock prices due to the amount of borrowed money used. If a particular stock is held by 30% borrowed money, then the stock price is 30% too high. Wall Street firms can borrow to purchase new stock based on the market value of other stocks they hold to a near 100% match.

These actions essentially give the Wall Street firms the ability to print money. One draw back to this manufacturing money: no actual value is placed back into the economy. It's like the movie Wall Street: the illusion of value becomes real. An illusion of a market capitalization becomes real, and others buy into the "profitability" of particular companies.

The valuation of companies should be substantially lower; 30% lower is not outside the ability of the market to correct. 6% has been lost in the DJIA since mid-July, and I suspect we have about 20% more to go.

As far as interest rates recovering the flailing market, lower rates would further drive down the value of the dollar and spur inflation in the economy. Side note: I am a proponent of a weaker dollar to boost U.S. manufacturing, but realize there is a fine balance between a low dollar and an easily purchased U.S. economy.

Resume

2007-08-01T07:35:00.005-05:00

Education

Master of Business Administration, Finance, University of Alabama at Birmingham, 2007 - 2009

Bachelor of Business Administration, Management, University of Montevallo, 2000 - 2004

Experience

GradesFirst, Director of Operations, June 2010 - Present

Harbert Management Corporation, Network Architect, 2008 - June 2010

Strategically increased the effectiveness of technology at a corporate level; managed projects for business process efficiency applications: CRM, Deal Flow, Change Management, and Document Creation
400x increase in client traffic to customer facing portal integrated with CRM
Designed and Built SOA venture capital deal flow pipeline application
4x increase in efficiency of accounting process using collaborative application
Automated change management for auditable changes to accounting systems
Instituted and trained users on collaborate intranet sites

Harbert Management Corporation, Internet Services Engineer, 2006 - 2007

Oxford City Board of Education, Business Education Teacher, 2004-2006

Developed skills to lead, speak, train, manage, and prioritize a diverse group of individuals
Created and managed training programs for students and teachers
Trained students and teachers to maximize impact of technology

Skills

Organizational Knowledge

Ability to match people's potential with output by creating an environment for motivation
Collaboration and communication enhancement
Strategic design, design paths based on corporate mission
Organizational culture, recognition, modification, and leveraging for change

Financial Management

Corporate Cash Flow Models
Budgeting, cost allocation analysis
Corporate and project IRR, NPV, and MIRR analysis
Value investment methods & philosophy

Information Technology

Expert in Open Source Web Technologies: Ruby & Ruby on Rails 3 years; PHP 9 years; Linux, RHCT, Apache 9 years; Javascript 9 years; & jQuery 2 years
Expert in Open Source Databases: MySQL, PostgreSQL, SQLite3, CouchDB
Expert in Web Design: HTML, CSS, W3C Standards, HTTP protocol, Javascript, DOM
Project Management: Source Code Management, Collaborative Technologies, Test & Behavior Driven Development, & Agile Development Methods
Expert using Operating Systems: Linux, Windows, Mac OS X, Solaris
Expert using SQL & deriving Business Intelligence

Activities

2011 University of Montevallo Junior Board
AKL Chapter advisor

Speaking Engagements

2011 Tech Mixer University - Growing the Next Crop of Web Developers
2009 Tech Mixer University - Beginning Ruby on Rails