The best investment advice you'll never get

Via The Simple Dollar, a very good article about investing, using Google's experience just pre-IPO as the background story.

The advice? One economist said:

“Don’t try to beat the market,” he said. Put your savings into some indexed mutual funds, which will make you just as much money (if not more) at much less cost by following the market’s natural ebb and flow.

Another:

Don’t try to beat the market, he said, and don’t believe anyone who tells you they can—not a stock broker, a friend with a hot stock tip, or a financial magazine article touting the latest mutual fund

And most cuttingly:

Bogle’s closing advice was as simple and direct as that of his predecessors: those brokers and financial advisers hovering at the door are there for one reason and one reason only—to take your money through exorbitant fees and transaction costs, many of which will be hidden from your view. They are, as New York attorney general Eliot Spitzer described them, nothing more than “a giant fleecing machine.” Ignore them all and invest in an index fund. And it doesn’t have to be the Vanguard 500 Index, the indexed mutual fund that Bogle himself built into the largest in the world. Any passively managed index fund will do, because they’re all basically the same.

Index, index, index!


Also summarized here.

Questions couples should ask before marrying

Duh, I'm thinking about marriage... lol.

By way of the New York Times:

1) Have we discussed whether or not to have children, and if the answer is yes, who is going to be the primary care giver?

2) Do we have a clear idea of each other’s financial obligations and goals, and do our ideas about spending and saving mesh?

3) Have we discussed our expectations for how the household will be maintained, and are we in agreement on who will manage the chores?

4) Have we fully disclosed our health histories, both physical and mental?

5) Is my partner affectionate to the degree that I expect?

6) Can we comfortably and openly discuss our sexual needs, preferences and fears?

7) Will there be a television in the bedroom?

8) Do we truly listen to each other and fairly consider one another’s ideas and complaints?

9) Have we reached a clear understanding of each other’s spiritual beliefs and needs, and have we discussed when and how our children will be exposed to religious/moral education?

10) Do we like and respect each other’s friends?

11) Do we value and respect each other’s parents, and is either of us concerned about whether the parents will interfere with the relationship?

12) What does my family do that annoys you?

13) Are there some things that you and I are NOT prepared to give up in the marriage?

14) If one of us were to be offered a career opportunity in a location far from the other’s family, are we prepared to move?

15) Does each of us feel fully confident in the other’s commitment to the marriage and believe that the bond can survive whatever challenges we may face?

Does econ make people conservative?

I was running through my old reader stars trying to clear them up, and ran across this post, "Does econ make people conservative?" by Greg Mankiw.

I was suddenly reminded of a conversation I had with Yitch two weekends back, where we were discussing (not arguing about) inequality. More specifically, whether low wages for some workers and high profits for the companies which hired them, indicated exploitation of said workers, and whether government/society should force companies and rich people to give said workers a "fair" wage.
(Well, obviously this is my view of the matter, nuanced against such interference. The fairer interpretation of the discussion would be to say that we started with the question, "is workfare enough?")

Anyway, here we were, me using economics arguments to beatdown on him. And, with regards to the question, Mankiw says,

I believe the answer is, to some degree, yes. My experience is that many students find that their views become somewhat more conservative after studying economics. There are at least three, related reasons.

First, in some cases, students start off with utopian views of public policy, where a benevolent government can fix all problems. One of the first lessons of economics is that life is full of tradeoffs. That insight, completely absorbed, makes many utopian visions less attractive. Once you recognize, for example, that there is a tradeoff between equality and efficiency, as economist Arthur Okun famously noted, many public policy decisions become harder.

Second, some of the striking insights of economics make one more respectful of the market as a mechanism for coordinating a society. Because market participants are motivated by self-interest, a person might naturally be suspect of market-based societies. But after learning about the gains from trade, the invisible hand, and the efficiency of market equilibrium, one starts to approach the market with a degree of admiration and, indeed, awe.

Third, the study of actual public policy makes students recognize that political reality often deviates from their idealistic hopes. Much income redistribution, for example, is aimed not toward the needy but toward those with political clout. This Dave Barry column, which is reprinted in Chapter 22 of my favorite economics textbook, describes a good example.

For these three reasons, many students in introductory economics courses become more conservative--or, to be precise, more classically liberal--than they began.

Of course, the economists should believe that this more conservative viewpoint is actually the more correct viewpoint, right?

Why we overspend

The Simple Dollar has this interesting observation on one of the reasons why we overspend: We're perpetuating a lie about our own finances, either because we don't want to let people think we're poor, or possibly even because we may be lying to ourselves as well...

Strange feelings..

I'm not the possessive sort - or at least that's what I thought. I mean like, she was in US for 3 months, and I didn't worry at all.

So now she's going to HK with her friends and stuff and invited me to join in for the second half when her family's going. I can't go, can't get away from work. Who said civil servant's life was easy?

Okay, can't go, should be cool right? But I have a sick feeling in the pit of my stomach. Is it because I can't go? Or is it that even if I could go, I have an ominous feeling about the trip, that I should not go? Or is it because she'll be there hanging with a bunch of cute guys for a week or so, and deep down I'm insecure and unsure?

Gosh, I'm so insecure. I always thought that relationships needed both trust and insecurity. Trust, so that blind jealousy and careless miscommunications don't take on their own life and sink the relationship. But insecurity as well, because as long as you don't take the other for granted, you're on your toes, doing a little more for the person and just generally playing nice. But more importantly, because no matter how secure you are in his or her love, you never know when something could take it all away - so insecurity means that you're able to survive and live on.

So I worry. But I wonder why I worry, and I worry that I don't know why I worry, and I worry that I'm wondering why I'm worrying, and so on. A sick feeling in the pit of my stomach.

I don't think I'm jealous though - maybe 99% sure it's not jealousy. The other 1% is just tragic Zim, the part of me that always imagines the worst possible outcome and then plans for how to survive it.

Argh - gotta get out of this mode.

4 books!

My reading life is being resurrected! Borrowed 4 books when I returned the Locus collection (previous posts here and here) - George RR Martin's A Feast For Crows, Jim Butcher's Death Masks, Year's Best SF 11 (not the Dozois collection), and Terry Pratchett's Going Postal.

I've given up on finding a copy of George RR Martin's first book in the Song of Fire and Ice, a Game of Thrones. Gosh, every library I drop by only has a Storm of Swords, and the same applies to the bookstores. Crazy, innit? I just want to read it before I start on the boardgame!

Snow Crash, Neal Stephenson

Recently bought Snow Crash, by Neal Stephenson. Was ambushed while at PageOne, heh.

Anyway it's amazing! The book was released in 1992, and seems to predict alot of what we are already seeing in how data is collected and people are being represented online. I especially like the concept of the "Earth" programme.

And it's a really cool bonus that I started reading the book about 1 week after I saw future Hiro in "Heroes" with the cool getup and katana on his back - of course Hiro Protagonist is half-black half-Japanese/Korean, but that's not the point.

Anyway - worth a read, especially if you're a mythology addict like me. He links the whole story up using Sumerian mythology as a base, though other than his theories about the primordial language, I would also say that the way the story turns out, there is also an element of prophetic mythology, as in how many of the myth / belief systems seem to re-run the same event multiple times within the stories, either by having the same pattern of events re-running in two character's stories, or by having prophecies for the future set-up based on the events of an existing mythic story. It could even be both, with character A, in his story, being told a prophecy which mirrors a mythic story of character B who A is also aware of, and then going on to fulfil that prophecy, so that we actually are aware of the story 3 times - once in B's life, once in the prophecy in A's life, and one in A's life when he actually enacts the event.

Titoudao

I caught a play at the National Library Centre Drama Centre, Titoudao.

It was not "world-class", but it was entertaining. An interesting format built around wayang - on the one level, there was the wayang play within a play, but on the other, the story of Mdm Oon Ah Chiam which was being told outside it, was told in a blend of wayang and modern play conventions. Like the mixed use of Hokkien, English, and Mandarin, this generated some confusion, but in the end, I didn't have to understand every last detail to see the broad strokes being painted.

And the broad strokes painted an oxymoron, of a artform which was perhaps crass and outdated, yet tinted with nostalgia and restrained longing. I had never watched a wayang before, and as I watched the wayang sections I wondered, "was it really exactly like this? So transparently obvious, the clear winks to the audience and self-mocking humour?"

Yet, that did not really detract from the appeal which the form had. Who says that plays and movies have to immerse you in another world, anyhow? Maybe we all need a little of this, an escape from reality into a brightly painted toy world where our faces are clearly painted for all to see.

Good Will Ticket

I've signed up for a Good Will Ticket...

Good Will
You Mark Below
All All Right With Love Afterwards
Why Not Say Yes
[] Yes

- Gone, by Jim Crowley, a Locus Award winner.

My last post from this book is also an uplifting one. It's a story about aliens bringing redemption for humans, but not precisely the way we expect.

I'm making a promise to everyone - good will, and love, and everything will be all right.

Breakdown in communications

I was watching the debaters from MGS and UWC in the Arena show yesterday evening, and getting totally disgusted. Not that their debating skills are bad - I mean, they speak good English, generally clear, slightly overstated use of bombastic phrases - but that the whole debating thing seems kind of skewed, at least from what I saw.

(And at this point I need to apologise to Lari and Penny if I offend them)

What I saw was - massive intellectual dishonesty, aggressively misunderstanding what the other party has to say, and grossly inaccurate distortion of the opponents' viewpoint.

A huge breakdown in communication, in other words.

I thought, probably mistakenly, that debating was about good logical deduction, communicated well, and incorporating the wise arguments of the other, while discounting the unreasonable statements of said other, in a beautiful dance/jiu-jitsu of words. What I saw was a battleaxe duel, two parties arguing relentlessly over the same motion but never actually engaging each other in an actual argument - because no-one ever acknowledged the other's valid arguments. It was a graceless contest, each side discounting the other's position, not because it was without merit, but because it must have seemed to them that accepting any part of the argument would have been weakness on their part.

Question: why do we value debate over negotiation? Why not value the process of listening to the other side, understanding their points thoroughly, and sieving out what is good and wholesome from what is illogical and flawed?

Debate shouldn't be about one side's initially adopted position crushing the other's into the ground. Instead, the result of a debate should be a wiser position, a result of iron polishing iron, view engaging view.

The Ghost Rider game sucks too?

The movie was bad, looks like the game is worse. Wired posts 4 points out of 10!

Reading: The Locus Awards: 30 years of Science Fiction

I picked this book up from the Bukit Batok Library two weeks back. I'm a real sucker for science-fiction, especially the short-fiction to novella length. I suspect one reason is that I do not like the space-opera kind of science-fiction, where basically the story is some long drama series which just happens to have laser guns and spaceships instead of swords, magic, and dragons.

Instead, I prefer thoughtful pieces - stories which comment in some way about society through the use of science. Short stories lend themselves more naturally to this format, because they have so little space to work with. Rather than trying to build up your identification with the protagonist, the author has to beef up the central idea of the story and communicate it in about 20 pages or so. Of course, there's good science-fiction and bad science-fiction, and at least with short stories you don't waste too much time on the bad ones. Plus, I normally pick up Gardner Dozois' yearly picks of the best sci-fi of the year - lazy me! So this book is a good fit for me.

(Disclaimer: I don't dislike all sci-fi novels or series - for instance, I'm reading a novel now which I will review soon, and I do love novels like Starship Troopers or books like the Ender series - but more on that another time).

The Locus Awards collection is edited by Charles N Brown and Jonathan Strahan, both editors linked with the Locus magazine. It contains 18 stories from 18 different authors, organized by decade - and naturally they're all good! However, as mentioned before, these are not space-opera type stories - don't expect to see swashbuckling heroes chopping their way through aliens! Most of them, in fact, are stories about the human condition - using the imagined technologies and crises of the future to comment about our frailties and strengths.

I'm going to highlight a passage from Buffalo, by John Kessel, which was particularly impactful. It may not be actually the most impactful in the book, as I'd perviously read and enjoyed some of the other stories included - I heartily recommend the stories Bears Discover Fire (Terry Bisson), Maneki Neko (Bruce Sterling), and Hell is the Absence of God (Ted Chiang), which have taken offbeat, humorous approaches to serious topics. Nevertheless, Buffalo is particularly relevant to all of us dreamers who love sci-fi.

"Through the music speaks a a truth about life that Kessel, sixteen years before my birth, doesn't understand, but that I hope to: that life constrained is not life wasted. That despite unfulfilled dreams, peace is possible."

Why do we love science-fiction? Because it speaks to us of our dreams of the future, unconstrained by the limitations of technology now. Yet forty years later, most of us would not be living in the worlds of our fiction. We're far more likely to be living mundane lives with family and children, not the stars of the story of our youth, but mere background fodder. But living a good life is itself reason for living a good life, and even if our lives remain constrained by the times, they are nonetheless purposeful ones - lives lived in the moment, for the good of those around us, with no greater result than to make life infinitesmally better for those around us.

Picasaweb

Tried to do some uploading of photos today. I'm still torn between Flickr and Picasa and trying to figure out how to manage both the offline and online photo management. Any advice from experienced parties would be mucho appreciated!

Hooked!

We'd actually meant to eat at Let's Clap but they were packed! Ah well, Rail Mall has plenty to eat, their loss! We headed onwards towards Ramen Ramen Ramen but got waylaid by this store menu!


Another Fish and Co clone? Well, the store decor is very well done. I liked the facing wall especially, check out all the fish!



The place is also very spacious - lots of space between tables, not like Manhattan and Fish n Co which are normally quite packed together.

There's also a very cute kids meal served in a plate the shape of a fish... Here's a picture of the smiley potatoes.



The sides were also pretty good, with scallop pictured here (though the pic looks a little disgusting, no? But it tasted quite nice, very fresh!) as well as fried mushrooms, jamba wings and other goodness.


On to the main course, fish n chip! In general, sis felt that the food was much less oily than Fish n Co - more healthy, less gelat. Key felt the same way, but actually we like the oily, buttery taste of Fish n Co...

The fish n chip comes with a choice of fish - dory, shark, or (more expensive) snapper. I went for the shark, since Key was getting the dory. Also because I'd recently been having some conversations with people where they tell me its cruel to cut the fin off the shark and let it go. So let's eat the whole shark?



Not much to look at, and frankly I'll never order this again. There was a weird powdery aftertaste which no one seemed to have - might be the shark meat itself. Not enjoyable.



And finally, waffles! Fruit was like the fish, very fresh and in large portion, and it was served with a generous helping of maple syrup. A bit toasty, but otherwise delectable.

Verdict: Price is probably very close to Fish n Co, just a bit cheaper perhaps. It'll be interesting to come back and see how their fish tastes like when they've mastered their craft.

No-give, no take

Marginal Revolution highlighted that Israel was considering legislation which would give priority for organ transpant receipt to people who had opted into organ-donation.

Previously I had written on this in two posts, one on the sale of organs, and one on enforcing against illegal brokers for organs. In general, I'd assumed that there was the ban on sale of organs meant that the price of organs was effectively zero. Alexander Tabarrok argues:

Economists argue that anytime the price of a good or service is held below its market demand, a shortage develops. Just as government-mandated rent controls imposed in New York and other cities have led to a shortage of housing, government rules that outlaw buying or selling organs on the open market hold the price of organs at zero and make an organ shortage inevitable.

Tabarrok goes on to suggest a "no-give no-take" rule. Reading the article, I felt a tickle of a reminder and went to read up the Human Organ Transplant Act FAQs and found that we already have such a system in place.

People who opt out of the existing HOTA, as well as those who are not covered under the existing HOTA, will receive lower priority on the organ transplant waiting list, in the event that they should require an organ transplant in the future.

Does Singapore still experience shortages of organs for transplant? I believe so, but I'm not sure. If we do, it might imply that the no-give no-take rule is not enough to ensure that there is no organ shortage. One reason why, might be that people tend to be optimistic and place little value on the possibility of receiving transplants in future. That would still put the price of organs at a low level which leads to organ shortages.