Sunday, October 16, 2011

Adam Wible read Hacked!

The Atlantic - Hacked!

The shift to the cloud, while inevitable, may indeed make life more dangerous (and I can attest to that).  This is a strong argument for two stage authentication for gmail, using longer passphrases or shorter passwords that are completely gibberish, and using different passwords for different categories of sites.  I will also take a look at LastPass and RoboForm, although I wonder if these sites attract more attacks as some of the juiciest targets on the web.

- Adam Wible

Thursday, September 29, 2011

Adam Wible just finished 'Kindle Fire'

HBR Article that argues Apple will remain blind to the low-end threat from Kindle Fire while focusing on the higher end of the market, and will eventually lose control of the tablet market as Amazon builds volume and adds features while keeping the price point low enough to entice the masses.  Seems a little naive re: Apple's strategy - as a successful technology company surely disruptive threats are analyzed more thoroughly and intelligently than what we get from equity research...

Amazon's Kindle Fire Is a Disruptive Innovation

- Adam Wible

Sunday, September 11, 2011

Adam Wible just finished Uncertainty Data and Judgement Intro Articles

We've now covered some fundamental concepts of behavioural finance (and more generally, blind spots in human intuition).  Probability is a big one.  Given the complexity of the formulas it isn't surprising that we aren't doing factorials to exponents in our heads, but it is surprising that we still have a high degree of confidence in our gut reactions, despite several real time classroom examples to the contrary.  Some biases I found interesting:

  • Anchoring
  • Overconfidence
  • Exaggerating importance of recent information
  • Misplaced priorities and counterproductive regret
  • Change in risk appetite when losing vs. winning (throw good money after bad)
  • Endowment effect (place higher value on things you already own) and bias for status quo
  • Look for evidence to confirm one's own preferences
  • People measure success relative to peers rather than on an absolute scale
  • Tendency to get probability wrong when expressed in % vs absolute numbers
  • Projections, mutual funds, etc are not able to consistently generate outsize returns

Economist: Getting the Goat (Feb 1999) - birthday puzzle, Monty Hall, and false-positive puzzle
Economist: Freud, finance, and folly (Jan 2004)
Economist: To Have and to Hold (Oct 2003)
HBR: Hidden Traps of Decision Making (Jan 2006)
FT: Forget the gurus - toss a coin (Jan 1998)

- Adam Wible

Sunday, August 14, 2011

Adam Wible just finished 'Risk On!'

The article draws few actionable conclusions, but does make it sound like the Federal Reserve is running out of tricks, as is the US government.  With government spending cuts needed to manage a national debt that is no longer viewed as acceptable, economic growth tied to federal stimulus is unlikely to materialize.  So why do stocks regularly bounce 5% in a day these days?  Large hedge funds and high frequency programmatic trading, perhaps.  Prices certainly doesn't seem to reflect the DCF of future dividends - ha!

- Adam Wible

Thursday, August 11, 2011

Adam Wible just finished 'The Pink Panthers'

Adam Wible: Just finished reading a New Yorker article about The Pink Panthers.  The Pink Panthers are reputedly a Balkan criminal organization operating in Western Europe, primarily undertaking smash and grab style robberies of high end, but less well guarded jewellery stores around the world.  The New Yorker story discusses crimes in London, Dubai, Tokyo, and Paris.  More interesting, however, is how David Samuels peels the onion to understand the motivation behind the young men who join the group, who more often than not come from Nis or Cetinje, Serbia.  Lack of legitimate opportunity is foremost among the causes, followed by boredom and impatience, and the misleadingly glamorous reputation of being an international diamond thief.  Most of the members are caught, killed, succumb to drug addiction, or are sacrificed to cull the ranks or, for some, to placate Interpol (who gave them the Pink Panther moniker) and the EU in the hope moving Serbia and Montenegro closer to EU membership.  Samuels comes a quasi-sympathetic conclusion which is hard to disagree considering the circumstances in the former Yugoslavia and the fact that, at least in the short term, faceless insurance companies and the super wealthy have born the brunt of it.

The story is available from the New Yorker (abstract only for free):

Of course, there is always the well-worded rebuttal to Samuels' deterministic / nurture summary judgement of the panthers:

The New Yorker recently posted a follow up on the Pink Panthers - yet another has been caught, but this time a 39-year old.  Potentially the "brains of the operation"

Wikipedia - there is a Wikipedia Article concerning the panthers, though while drawn from a number of different sources, does not add a whole lot to the New Yorker portrayal:

I'm just looking forward to seeing Leonardo DiCaprio in this role:

Just wish Gorila, by Dusan Savkovic, were in print (or better yet, available on Kindle) in the meantime.

- Adam Wible