Being too comfortable is a bad thing

I have come to the realization that I've been living too much of a cushy life and it is having a bad impact on my "drive." I can't think of the antonym of the word "apathetic" at the moment so I'll use drive for the time being.

Things are just too cushy for me and it is too easy for me to just simply exist. It also having a negative impact on my ambition. Sometimes I used to wonder what is it that continually drives these ultra rich CEOs like Bill Gates, Steve Jobs and etc one after making billions of cash. Money simply isn't the motivating factor anymore. It is often confused that ambition is some how linked to making money, but often that it isn't the case-- many ambitions can be accomplished with the help of money. I think it is a concept that gets confused quite often.

Knowing how to follow your heart

My mind works in scientific manner, in that I generally use logic to work things out. Sometimes, some gut feelings are thrown in to the mix when it comes to being creative and coming up to new ideas. But when things are boiled down, we are simply applying these processes and sometimes we forget to ask ourselves what ends are we trying to achieve.

What I have realized after getting into the workforce is that it is easy to forget for what reasons are we working for, or even if we had reasons for getting into what we are doing in the first place. You've graduated and you're on your own now, it's now time to for you to make it on your own now and the problem is that it is too easy to get focused on surviving. Wake up, work, pay the bills, take 2 days off on the weekend-- lather, rinse and repeat. There is more to life to this and after spending a pleasant day chatting with friends and working out at home, I suddenly became pissed off.

My biggest beef is that I should be getting more out of my life and that I should be less tolerant of myself being complacent with just going along with the flow.

What are your deepest wants?

I believe that people are defined by their deepest wants. I get bored meeting new people and when I ask them "so what do you enjoy doing" and they respond with "well, I dunno." I get bored real fast. Seriously then, do you have a reason to exist?

One of my favorite movies is Fight Club. It's a fucking brilliant movie. My favorite scene is where Tyler Durden sticks up the convenience store, simply to scare the shit out of the clerk because he stopped going to vet school because it was too hard.

My favorite quote from the movie was right after the scene with Tyler's monologue:

"Tomorrow will be the most beautiful day of Raymond K. Hessel's life. His breakfast will taste better than any meal you and I have ever tasted. "

Many people who've had a near death experience usually walk away with a new lease on life-- maybe because they've realized that there are many things that they still want to do, but haven't yet. For those of us that haven't had an experience like that, I think that we forget that we all are dying, day by day-- time isn't something that shouldn't be taken for granted.

One of the best experiences of my life is leaving Canada. I find it ironic that I would find leaving one of the livable cities in the world to live somewhere else to be a good thing. But there are things that I have learned on my journeys that I would have never learned by staying at home. The thing about learning how to travel is that you know that your time is limited, thus you make the best of that limited time by doing the most you can. This is how I should be living my life everyday.

When I came to Japan, I ended up being more traveled compared to many of the Japanese that lived here, simply because it felt like I was traveling instead of living here. The ironic thing is that I split an apartment with a Japanese guy that lived in Canada for about a year and he was far more traveled than I was. For the 24 years when I lived in Canada, the furthest I've ever traveled was to Toronto. I've never really seen Banff or Niagra Falls. When I lived in Canada, it just felt like that I could go there whenever I wanted. When you start living like that, you'll end up not doing things.

Your heart will want to take you to strange places

The most ingrained thing of our youths is how our we would be taught to not have dreams off the beaten path. From a survivability point of view and of a parent it makes sense because it is what they are most focused on at the moment. Paying down the mortgage and raising kids is tough work, not that I have kids or a house... I've just done the calculations so I know in advance. But the thing is that values change depending on your age and the conditions you live in, the problem is that people don't do a good job of appreciating this idea--as if values are something unwavering and set in stone. They do change and you've probably not noticed it.

There is more to life than just surviving and it is quite often the part of life that gets forgotten, because sometimes the things that we want are strange... not strange as in weird, but simple different from everyone else. Maybe one person's dream is to be a musician and another's is to travel the world. I cannot answer why we want the things that we do or why you want something different from what I want, but despite wanting different things I can recognize the common things that we share is that happiness is linked to getting what we want.

It's better to try and fail instead of not trying at all

This should be obvious and Shakespeare had his head screwed on straight when it came to love, but this applies to everything else in life as well. I'm not going to make any guarantees that you are going to succeed in everything you do-- you probably are going to fail at something and you will, I guarantee it. The more important thing is if you can keep on going despite failing. If there is a barometer to knowing how/when to take a risk it should simply be that-- for those that have played Texas Hold'em poker, you know what exactly I am talking about.

How much are you willing to lose, how much can you lose?

I think that one thing that isn't really appreciated is knowing how much we can actually afford to lose and still keep on going-- there are so many thing in our lives that simply aren't necessary, but we are still too afraid of losing our so called "creature comforts." After living in Japan for a while, I've already ditched the TV and love living life without it. I can cut back on eating out and bring down my food costs significantly by cooking cheap but healthy meals. I can cut down my expenses further by cutting out expenses for going out for drinks. If I need really cheap housing, sharing an apartment is an option. When push comes to shove, I know I can bring my living expenses way down, bring living expenses down to $800~$1000/month. At this level of income, even a $7/hour job for 8 hours/day can sustain this life at bare minimum, with a university degree, you can easily do better.

So my advice to young adults right now:

Failing isn't the end of the world, success is knowing how to survive failure. While you're unmarried and without kids, these are going to be the freest years of your life. If you want to try something big, this is going to be your only shot. Use it wisely, never be complacent.

Uproar against Oprah

So Opera is running a contest to find the next TV talk show host, though usually I wouldn't care for these things one of the entrants has proposed an excellent idea and seems to be a really honest down to earth guy. His name is Zach Anner, a 20-something year old guy with cerebral palsy and has an enticing video about traveling, his video entry is here.

The contest supposedly began around May 14th, 2010 with a site allowing people to put in submissions for videos and there will be live casting calls involved. But to the heart of the whole issue, is that Zach Anner went viral by June 14th. Interestingly with help by 4chan and social websites like reddit and has hit 3 million votes. Interestingly out comes a unknown entrant going by Dr. Phyllis and her entry is here. Earlier today Dr. Phyllis was leading Zach Anner by a ~200,000 votes, which is odd considering someone with very little web presence. Ironically the people at 4chan, enraged by the whole ordeal has spread news of the vote rigging, started voting campaigns only to find that Dr. Phyllis to continue to lead. In short, what we are seeing right now is blatant vote rigging by Oprah's website, and I have a feeling that Dr. Phyllis was Oprah's favorite from the beginning to have her own show.

Democracy against totalitarianism at it's best. Apparently 4chan is pissed and has started "Operation SyPhyllis", involving macros to start auto-voting but it seems their votes are going elsewhere. They are, exceptionally pissed. I am really curious to see where this drama goes. One of the reasons why, it is hypothesized that Zach might not be the "right candidate" for a show hosted by Oprah is that he wouldn't cater to the demographics of her brand (housewives) as opposed to people like Dr. Phyllis, whom is a black lady in her middle ages. Seriously, 5 million votes for Dr. Phyllis over 1 month!? That would be at least 170,000 votes/day and Zach is at 4.7 million now. For those 2 alone Oprah's site would need at least 300k visitors/day, just for those 2 contestants alone and assuming a 100% voting rate. There is no way that Oprah's website would naturally generate that much traffic and I would honestly call bullshit on the whole thing.

Personally, I stand with Zach Anner because I liked his video think that he would be awesome on a show. For a guy with cerebral palsy to come so far is admirable and I am not a huge fan of Oprah right now. So I hope things play out like this:

1. Zach Anner loses to an Oprah "favorite"
2. The internet, news and tabloids go into an uproar
3. Oprah is ridiculed
4. Some other network seeing the value of Zach picks him up
5. Zach's show rocks
6. Oprah selected favorite starts her show and bombs

Justice is served.

Updated the blogger template

I've updated the blogger template from the old version that I was using. I was somewhat shy of updating since there were a bunch of custom changes I made to the old template to make it more viewer friendly on wider screens. The defaults for the older templates had the blog rather narrow, so I changed the parameters to make things wider. I also have a hit counter installed just for kicks though I don't really care about the volume I get to this site, I wasn't sure that things would still work after the upgrade.

While writing the last post, I thought it would be nice to embed some mathematical equations and I did manage to find an applet that would let me do that my interpreting LaTeX code to do the formatting. Previously, I used to do the writing in the MS Equation Editor in Word. The problem now is that I don't use Word at home so that option was out. I did find something nice here that I installed and it worked decently. I've never used LaTeX before, but it seemed rather easy to figure out and I had it going after a little bit of testing.

I am not much of a front end webpage designer so I do kind of shy away from that kind of stuff, but if I am to dive into the database programming stuff and consider interfacing that to webpages, it is something to look into in the future.

A plot of Yield vs Bond Prices

Been sick for the last week so I've decided to take the weekend off from social activities and spend it at home. There is only so much time one can spend in bed so I've gotten out of bed and decided to get back into some programming and study some finance. I decided to do some basic study in bonds since it seemed simple enough, at least compared to learning options and Black-Scholes equation (I have a basic understanding of the formula, it's just an implementation and testing problem and writing software to make calculations easier).

The mathematics of modeling bond prices is fairly simple using a discounted cash flow (DCF) model based on some internal rate of return (IRR). Basically, a bond is a security with (or without) a fixed interest payment at some interval (annually, semi-annually or quarterly) and finally the redemption of the bond at the end of the term. Calculating and comparing the value of one bond against others requires the comparison of yield to decide if you want to select one bond over another.

In mathematical notation the DCF for the present value of cash flow is summarized as:

$\color{white}PV =\sum_{t}P_t(1+IRR)^-^t$

Where:

• $\color{white}P_t$ is the cash flow at some point in time $\color{white}t$
  
• $\color{white}IRR$ is the internal rate of return
• $\color{white}PV$ is the present value of all future cash flows

The pricing of the bond represents its present value and what is required to be done is the calculation of the IRR, resulting in the determination of the yield of the bond. Unfortunately, calculation of the yield is not a simple process-- the PV equation is often a problem of multiple polynomial order. To find the solution to this problem a solver is required, which basically is a glorified "guess and checker" to find the right solution to the yield that satisfies the present value of the bond.

This is of course is possible to do in Excel with the use of its solver module. The problem, however is tedious when you want to calculate over a range of possible bond prices to understand the sensitives of yield vs bond prices as the solver needs to be rerun for every bond price and every IRR needs to be saved and then plotted for.

With a bit of some spare time on my hands, I decided to write a simple solver and plot over a range of different bond prices to understand the relationship of yield vs bond price over 3 different bond interest (coupon?) rates for a 5 year bond. The result is illustrated in the graph below (click for a larger view):

What this graph illustrates is the inverse relationship between yield and price of a bond. The higher the cost of a bond, the lower the yield, which of course should be obvious when you think about it since you get less return when you pay more to buy a bond.

The graph also explains the cursory impact of Federal Bank interest rates on the bond market-- what it means is that increasing interest rates will generally force bond prices lower because future cash flows are valued less with higher interest rates. The reverse is also true when interest rates are decreased, bringing bond prices upwards.

Though quantitative valuation of bond pricing can be done mathematically to get nice numbers, investors must also be confident with the company to repay its bonds. Confidence or risk is also a factor affects the yield of a bond. Companies that are considered low risk, generally garner lower yields as there is stronger demand for their bonds thus pushing the price of the bond upwards. Companies that are considered riskier generally have less demand and their bond prices tend to be lower. The market in this sense sets the interest rate at which a company borrow cash as the yields for newly written bonds must be at least equal or greater than the bonds being currently traded-- if yields are lower than currently traded bonds, then there is no incentive to buy the new bonds.

There are inherent dangers of relying strictly on mathematical models for bond pricing as the qualitative aspects of bond pricing, mainly the confidence factor is not well represented in the numerical analysis and this is a source of significant risk. The recent economic crisis had also caused a crash in the bond market as confidence for many companies to continually repay their debt dropped, leading to depressed bond prices and an opportunity to acquire bonds with very high yields, so long as you were able to pick the correct companies.

Though it would be smart to sell of bond assets before an economic crash, bonds appear to be fairly safe so long as the underlying company does not go bankrupt or default. Supposing that you bought a 5 year bond just before for a decent yield at 7% or something before an economic crash and assume that the company is well off enough to survive for at least the next 5 years, you are guaranteed to get your money back with interest when the bond matures. For the matter of equities, you have no guarantees if stock prices will recover within that time span. In this regard, bonds are fairly stable when compared to buying stock equity.

The next step will be to find sources of data on where I can look up the specific details of bonds on the market, in addition to their payment schedule to refine and develop more accurate pricing calculations. I assume that many quants have done this already since the bond pricing is time sensitive as a result of the DCF model. The birth of "snatching nickels from under a steam roller" was a result of quants trying to pick up small profits through arbitration in the bond markets... however the amount of capital that had to be moved around to pick up these small "nickels" was immense, meaning that sudden large movements in the bond market would be catastrophic if an institution was caught. Some of the details of this can be found in Black Swan, a book by Taleb.

The Database is King

Databases are a pain to manage. Follow this guy, I he's a good guy and has plenty of good ideas. It's a breath of fresh air from most of the chaff I've been reading on the net recently.

I have been working on a database problem for quite some time now, I just never realized it when it came to building a simple stock market analysis program. I pretty much wrote a simple database system to store my data and run queries against it. It came apparent after I started separating my query code from the data to make analyzing data cleaner.

I started reading more and more about new startups coming online on the net, the kind that the guy I like to follow, Paul Graham seems to like to write about. He doesn't post as much as he used to on his website anymore, he seems to have gone underground into different networks, instead of appearing to the net as a whole, but to a more targeted audience of hackers instead. He posts more regularly here instead.

Many of the growing start ups he has been funding recently has been oriented on providing services through a amazon's server network. The more I think about it, it seems to be a hot bed for many new information management systems built specifically for many different niches and I am starting to see a big variation of similar themes.

You don't need a huge server farm anymore and you pay for whatever you need when you need it. The setup is amazingly simple. The database is pretty damn amazing stuff and it had pretty good applications in social online products.

I need to pick up some database skills, for 2 reasons:

1. The company I work for could use a hand in databasing their experimental data and tracking

2. I could spin off my skills to dive into the world of online data management and figure out to monetize my skills.

Jason L Bapteste, an excellent writer with good brains on his head mentions that Excel is the world's more used "Database." I agree with him after seeing how we (as researchers) manage our data, that is plenty of room for improvement here, especially when it comes to querying data. Recent versions of excel has brought in more and more databasing functionality on sort of a "lite" kind of scale, but there is most definitely a demand for it.

Friends as filters

The same cycle repeats itself. First you have a small community of smart people, then it gets noticed and then the quality of the community drops like a rock after too many people want to join it. The same thing happens for real life communities, real-estate and online communities.

I frequent many socially aggregated websites, mainly places like reddit and slashdot. I've been hanging around there since the beginning of reddit and I have to admit that the quality of postings over there during the first few years was great. Now after the 4th or 5th year of the site being live and it catering to a very wide audience, there is a whole lot of uninteresting crap that gets posted out there. If you know anything about the LOL cat meme, then you know what I mean.

Digg, another social link aggregation site suffers the same problem and started which ironically, caused more of the "intelligent" users to move over to reddit, (there are sources out there on the net and I don't feel like doing the linking at the moment since I just want to get this post done).

The web 2.0 phenomenon was a great hit at first, as it got the social web started. I would venture a bet that it was first the technologically savvy and intelligent people that caught on first that that created the valuable communities which spured this movement; and now everyone and their dog can get into these communities which has changed the dynamics considerably.

What I believe next to happen is the anti-thesis of web 2.0, which is the creation of the filtered internet, and ideally it is you that decides what to filter, most notably, the golden needle from the hay.

This is an idea, which I believe will outlive the open, aggregated websites like Digg, Reddit and Slashdot, which is also open to corruption by people gaming these sites (ie with vote bots and etc).

Instead, I propose/expect to see vetted communities of people that can aggregate for good information. I believe that this phenomenon is also being (had been) repeated on Facebook, where the community used to be only university students and now, even your boss might be able to see what you've been up to... the vetting begins with the privacy controls to other people.

I think we will eventually start to move away from these sites and develop our own aggregation systems... starting with our friends.

Midnight already

This is post 500. Over the last 5 years of doing this blog, I average about 1 post every 3 days.

I will admit that the writing quality and the depth of analysis that I've been doing recently has gone down significantly recently. It is sometimes said that the productive prime of one's life is when you're at 27. I am now 2 years past that prime and perhaps we might be seeing this effect occurring. Maybe it's also the lack of time that I have to do any significant writing/thinking either. I used to be able to get away with making blog posts from my desk at university, now making blog posts from work is kind of sketchy... but anyways, I digress.

Today, I finished work about 8:30 ish and came home where I did my usual exercise routine, took a shower, organized some photos and cleaned off my computer desk. By the time I had everything done, it's already midnight. It's amazing how quickly time flies, the passage of time is really different now that I've gotten older- it is a peculiar thing.

It just means that I am going to have to work harder to make every second count. After getting my room all cleaned up, I'll be looking into cutting out activities where I end up wasting my time doing nothing productive.

S3, The scalable platform

I got interested about how other large websites host data on the internet a few days ago and started poking around... eventually I found myself at Amazon's S3 website. It is Amazon's cloud computing service which basically allows anyone to sign up and use Amazon's scalable storage and computing clusters.

The idea of cloud computing hit a chord with me. Basically without much capital investment, it is possible to have a fairly formidable online web presence at somewhat of a decent price. Storage at $0.15/GB month for the first 50 TB, $0.15 /GB out and $0.10/GB. Suppose that you store 1 GB and transfer it in and out during a single month. That movement of data would have cost you $0.40 and subsequently $0.15 more for every time the data is shipped out.

Let's ignore costs for storing data and incoming data (because I will assume that you are a data distributor), the question is can you make more than $0.15/GB that you dish out? If you can, then you've got a money making machine.

The next question is, what kind of data would someone want to pay for?

A simple playlist generator?

I talked before about liking the iTunes genius playlist generator. It's a step in the right direction, but it is still kind of unwieldy when it comes to making music lists. Sometimes, the exact same group of music is always played together all the time and that doesn't add much musical variety to the playlists generated. I would like playlists automatically generated for whatever the occasion that I am feeling like. Something fast? Acoustic? Folk? Whatever?

The interesting thing is that music selection can be sort of dealt with using a markov chain kind of analysis. The computations might be really intensive since the transition matrix does tend to get really big, but it is a really simple "dumb" way of figuring out what kind of music that should be played together without directly analyzing the content of the music itself.

The point about the Genius playlist generator is that you send all your music data to apple, where it sorts through the ID tags of the music you have and then generates some kind of connection tree back for your iPod and then playlists are automatically generated based on that data. There are several problems with this since not all music might be listed in their database, thus certain songs will be forever left out of your automatically generated music mix. The other problem is since that I am on a linux based machine, I can't use iTunes and I don't want to use iTunes through a virtual machine because it is slow.

The open source music playlist generators right now are OK, but I still find them lacking a little still. I've started using a plug in for Banshee that does the playlist generation. I just use an initial song for the things to start. Sometimes it is tricky to pick something and I don't really like that. If I could pick from a mood or a genre, that would be nice.

There is room for improvement here and it might be an interesting problem to work on.

Must reduce clutter

I have come to the conclusion that I have way to much junk in my room and life in general, thus leading to way too much management overhead. Having too much overhead gets in the way of making decisions and getting things done, so I have decided to start by slowly getting rid of things that I don't use so that I can focus on the essentials better.

The first thing I am going to do is start getting rid of junk in my room, clear off the tables and organize for only the essentials. After that, I'll be going through the computer to organize my data and start trashing things that I don't need.

Finally, I need to go through my cell phone contact list and start organizing it and get rid of contacts that I never contact and keep a list of people that I regularly want to contact.

I'll be trying to do this over the span of a week so I'll see how this goes.

2 months into the diet

Been about 2 months into the exercise thing I've been doing and I am finally starting to see some results. For the first month, I've been focused on losing excess fat by changing up the diet, basically cutting out all junk foods and focused my food consumption to lean meats, lots of vegetables and complex carbohydrates. I've basically switched over from white rice to brown rice. Right now, I kind of like brown rice because of the texture and it has some more flavor over plain white rice.

Starting from the beginning of May, I bought an exercise machine which I use every other day for upper body strength training. It's been nearly 1 month of training using that machine and I am now starting to see some muscle development in my shoulders and chest. Growth in the forearms are a little slow texture of my arms have started to become firmer compared to before. I've also lost weight around the waist, which means my pants have started to feel considerably looser and I now require a belt as my pants will start to slide slowly down through the entire day during any walking activity.

The graph below kind of explains my current situation:



I lost about 2 kg (about 4.5 pounds) over the first month, where most of the weight loss occurred during the first 2 weeks of the diet. I was rather surprised at how quickly my body responded to the change in what I've been eating. After the first month, I started weigh training and there has been some fluctuations in body mass and somewhat of a continued downward trend in body mass until day 50, where after there has been an up tick in weight past day 60 and another sharp decline in mass as I close in on day 70. What might be going on is an increase in muscle mass that might be driving the body mass upwards.

On an interesting note, my physical change is having an interesting affect on how I navigate through crowded corridors in downtown Tokyo, especially in the train station. I used to spend time avoiding people around people while walking and now after exercising and getting a little bigger, people have started getting out of my way. I find this rather fascinating.

Been busy

Would like to do more writing but been kind of busy recently. I do come home earlier now a these days but don't spend as much time thinking as I would like. Too many internet distractions to be honest.

Been keeping up with the exercise routine, putting on some muscles now. Pretty happy with the progress.

Also saw a great movie today called Into the wild. released in 2007, but I had just found it recently. Been a long time since I saw a movie that made me stop and pause at the end.

It's past midnight now... had an early day and need sleep. Will get back into writing eventually.