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portefeuille (99.56)




July 01, 2009 – Comments (32)

Maybe it is a good idea to add some posts to the "caps" game blogs that are somewhat more "academic" in nature than the ones usually posted here. I have the feeling that there is both a need for that and the capacity among the current blog contributors and the board contributors that, as anchak put it, couldn't care less about the "caps" game.

I currently don't know enough to make a decent contribution myself so I might spend some time studying and then come back to write about it.

I might start with these two books.

I am not sure I will ever write anything decent on the subject so you might be better off just reading them. Here they are: 1,2.

Feel free to suggest articles or books that might be of interest to those interested in these books (I know that amazon has this feature but maybe you are better!).

An article on the author of the second book is here.



32 Comments – Post Your Own

#1) On July 01, 2009 at 5:29 AM, kaskoosek (92.46) wrote:

Gödel, Escher, Bach: An Eternal Golden Braid

Not economics 

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#2) On July 01, 2009 at 7:07 AM, portefeuille (99.56) wrote: Practical Fruits of Econophysics: Proceedings of the Third Nikkei Econophysics Symposium Hideki Takayasu ISBN 4431289143 DUOQho5EvbcC The application of econophysics: proceedings of the Second Nikkei Econophysics Symposium Hideki Takayasu ISBN 443114028X O6xuSmWzv2gC Self-organized complexity in the physical, biological, and social sciences Donald Lawson Turcotte, John Rundle, Hans Frauenfelder, National Academy of Sciences (U.S.) ISBN 0309082854 UDDD--RyQrAC Processes with long-range correlations: theory and applications Govindan Rangarajan, Mingzhou Ding ISBN 3540401296 H8JAal8FGhcC Modeling complexity in economic and social systems Frank Schweitzer ISBN 9812380353 16xhmuRY-XwC An introduction to high-frequency finance Michel M. Dacorogna, Ramazan Gençay, Ulrich A. Mueller, Olivier V. Pictet ISBN 0122796713 A5qYb7PtRKYC Statistics of financial markets: an introduction Jürgen Franke, Wolfgang Härdle, Christian Hafner ISBN 3540216758 8aMhcsLMhMgC An introduction to econophysics: correlations and complexity in finance Rosario Nunzio Mantegna, Harry Eugene Stanley ISBN 0521620082 6KGSYANlwHAC Fractals and scaling in finance: discontinuity, concentration, risk : selecta volume E Benoit B. Mandelbrot, Ralph E. Gomory ISBN 0387983635 As2xeIwS6OgC Fractals and chaos: the Mandelbrot set and beyond Benoit B. Mandelbrot ISBN 0387201580 _Vpj8nB2FSMC Dynamical systems with applications using mathematica Stephen Lynch ISBN 0817644822 TJ0dnfed0_wC Strategic risk taking: a framework for risk management Aswath Damodaran ISBN 0131990489 DPwBTj99a7UC The (mis)behavior of markets: a fractal view of risk, ruin, and reward Benoit B. Mandelbrot, Richard L. Hudson ISBN 0465043577 iiYV8osJy_EC The man who knew infinity: a life of the genius Ramanujan Robert Kanigel ISBN 0671750615 TlwPAAAACAAJ The Research Driven Investor: How to Use Information, Data, and Analysis for Investment Success Timothy Hayes ISBN 007135462X o6-F8I4LJLgC Principles and practice of clinical research John I. Gallin, Frederick P. Ognibene ISBN 012369440X aSB4xfVyTSEC Drug and Biological Development: From Molecule to Product and Beyond Ronald P. Evens ISBN 0387329781 8OomoH2ngEUC Advanced Data Mining and Applications: Third International Conference, ADMA 2007, Harbin, China, August 6-8, 2007 : Proceedings Reda Alhajj, Xue Li ISBN 3540738703 zs1CpfZeDgcC Forecasting and Hedging in the Foreign Exchange Markets Christian Ullrich ISBN 3642004946 mp1l7lD3S-4C Computational Methods in Financial Engineering Manfred Gilli, Erricos John Kontoghiorghes, Berc Rustem, Peter Winker ISBN 3540779574 HzLWWHmibsQC Quantitative trading strategies: harnessing the power of quantitative techniques to create a winning trading program Lars Kestner ISBN 0071412395 1NcZAgAACAAJ Contrarian Investment Strategies: The Next Generation : Beat the Market by Going Against the Crowd David Dreman ISBN 0684813505 jy0WU884hW0C Quantitative finance and risk management: a physicist's approach Jan W. Dash ISBN 9812387129 SprWzPcd1qgC Semi-Markov Risk Models for Finance, Insurance and Reliability Jacques Janssen, Raimondo Manca ISBN 0387707298 nsIpWLhcQIAC Consumption structure and macroeconomics: structural change and the relationship between inequality and growth Reto Foellmi ISBN 3540259910 j_zs7htz9moC Lectures on macroeconomics Olivier Blanchard, Stanley Fischer ISBN 0262022834 wFueGK0vjDwC A Macroeconomics Reader Brian Snowdon, Howard Vane ISBN 0415157161 VXINsDT1sFwC Productivity growth, inflation, and unemployment: the collected essays of Robert J. Gordon Robert James Gordon, Robert M. Solow ISBN 052153142X yzxT0Zh3X3IC Fundamentals of clinical trials Lawrence M. Friedman, Curt Furberg, David L. DeMets ISBN 0387985867 HXMUEjZ4vyAC Design and analysis of clinical trials: concepts and methodologies Shein-Chung Chow, Jen-pei Liu ISBN 0471249858 5r51O0zjUTIC Statistics of Financial Markets: An Introduction Jürgen Franke, Wolfgang Härdle ISBN 3540762698 F3x4OBE11qkC OECD Economic Surveys: Japan 2008 OECD, Organisation for Economic Co-operation and Development, OECD Staff ISBN 9264043063 KJs1WDN54wEC The Monetary Policy of the Federal Reserve: A History Robert L. Hetzel ISBN 0521881323 RLukwAoqXdsC The Macroeconomics of Global Imbalances: European and Asian Perspectives Marc Uzan ISBN 0415774691 f2ZOGlSdUgsC Asset Prices and Monetary Policy John Y. Campbell ISBN 0226092119 b7AdQu3HUd0C Structural reform in Japan: breaking the iron triangle Eisuke Sakakibara ISBN 0815776764 XzU1jwwwU80C Economics Richard G. Lipsey, K. Alec Chrystal ISBN 0199286418 GCYWQn79JYwC Macroeconomic Policy: Demystifying Monetary and Fiscal Policy Farrokh K. Langdana, NOT AVAILABLE (NA), W. Michael (FRW) Cox ISBN 0387776656 FC0QFlx12pwC Modern geometry--methods and applications B. A. Dubrovin, A. T. Fomenko, Sergeĭ Petrovich Novikov ISBN 0387976639 ExpTdTauXMwC Lévy processes: theory and applications Ole E. Barndorff-Nielsen, Thomas Mikosch, Sidney I. Resnick ISBN 081764167X -JJZxSMO6VUC Lectures on probability theory and statistics: Ecole d'Eté de Probabilités de Saint-Flour XXXII-2002 Boris Tsirelson, Wendelin Werner, Jean Picard ISBN 3540213163 MuJDfxhVtJ0C Lectures on probability theory and statistics Erwin Bolthausen, Edwin Perkins, A. W. van der Vaart, Pierre Bernard ISBN 3540437363 190xVQDRtHAC A History of the Federal Reserve: 1913-1951 Allan H. Meltzer, Alan Greenspan ISBN 0226519996 4il2mF7JG1sC Principles and Practice of Clinical Virology A. A. Zuckerman, Arie J. Zuckerman ISBN 0470517999 pDBZ0j4Vc-4C Security Analysis: The Classic 1940 Edition Benjamin Graham, David Dodd ISBN 007141228X WmcM2_xl73UC Behavioral finance and wealth management: how to build optimal portfolios that account for investor biases Michael M. Pompian ISBN 0471745170 vRLz2dZQZF0C The psychology of economic decisions Isabelle Brocas, Juan D. Carrillo ISBN 0199257213 BnEDno1hTegC The Princeton Encyclopedia of the World Economy Kenneth A. Reinert, Ramkishen S. Rajan, Amy Joycelyn Glass, Lewis S. Davis ISBN 069112812X mGjStFEi2kQC Inefficient markets: an introduction to behavioral finance Andrei Shleifer ISBN 0198292287 ZTcnMQs1aAAC Open market operations and financial markets David G. Mayes, Jan Toporowski ISBN 0415417759 nT1msASt-4wC Introductory econometrics for finance Chris Brooks ISBN 052179367X yPfLZa6juXQC Mathematics for economics and finance: methods and modelling Martin Anthony, Norman Biggs ISBN 0521559138 ShbEY1MdLugC Stochastic calculus for finance. 1, The binomial asset pricing model Steven E. Shreve ISBN 0387249680 9ffiTWQiDRYC Stochastic Calculus for Finance II: Continuous-Time Models Steven E. Shreve ISBN 0387401016 TAC5fHXg0_QC Modern theories of money: the nature and role of money in capitalist economies Louis-Philippe Rochon, Sergio Rossi ISBN 1840647892 rYZmuRGt5j8C The Economics of Money, Banking and Finance: A European Text Peter Howells, Keith Bain ISBN 0273710397 54IxO7Ec0NEC Money, Credit and Price Stability Paul Dalziel ISBN 0415240565 BIWEt8hRH2kC Essays in economics: national and international James Tobin ISBN 0262201011 TzktHPpAdxEC Principles of Economics Karl E. Case, Ray C. Fair ISBN 0132398605 on-l4WPvtpsC Capital, accumulation, and money: an integration of capital, growth, and monetary theory Lester D. Taylor ISBN 0792377818 -rKCb9dsPvoC Macroeconomics, prices, and quantities: essays in memory of Arthur M. Okun Arthur M. Okun, James Tobin ISBN 0815784856 DRdvtEI5YHgC Limiting central bank credit to the government: theory and practice Carlo Cottarelli ISBN 155775358X LbiGBDmZfSQC Principles of macroeconomics J. G. Nellis, David Parker ISBN 0273646141 Qq0QCsZxFJoC Macroeconomics: a neoclassical introduction Merton H. Miller, Charles W. Upton ISBN 0226526232 iaYjVvNUFScC Economics and economic change: macroeconomics Graham Dawson, Open University Course Team ISBN 0749253703 tIgNwmh2Pg8C The Crisis in American Banking Lawrence H. White ISBN 0814792898 r8033_BEDlUC The macroeconomics of financing government expenditure: a survey of the static consequences Ramkishen S. Rajan, Mukul G. Asher ISBN 9971692007 upzmagNj_tcC Macroeconomics Manfred Gärtner ISBN 0273704605 kygaMJxQdL0C Macroeconomics Deepashree & Vanita Agarwal, Timothy D. Tregarthen ISBN 0070620423 UjkQHuizKlMC Monetary policy implementation: theory--past--present Ulrich Bindseil ISBN 0199274541 2neeMTPKtEMC Inflation, Fiscal Policy and Central Banks Leo N. Bartolotti ISBN 1600211224 _TKthTn8TBYC The economics of money, banking and financial markets Frederic S. Mishkin ISBN 0321422813 678_V63biCQC Mastering financial calculations: a step-by-step guide to the mathematics of financial market instruments Bob Steiner ISBN 0273704443 oyUEG619s3cC Beyond the Random Walk: A Guide to Stock Market Anomalies and Low-Risk Investing Vijay Singal ISBN 0195304225 eUoolrxSFy0C The origin of wealth: evolution, complexity, and the radical remaking of economics Eric D. Beinhocker ISBN 157851777X QS0YcvonSm4C Mathematics for finance: an introduction to financial engineering Marek Capiński, Tomasz Zastawniak ISBN 1852333308 WpmtKSoM4KcC Asset pricing John Howland Cochrane ISBN 0691074984 aGiU29x-m4kC Corporate finance Jonathan B. Berk, Peter M. DeMarzo ISBN 0321416805 ENydi0hFhAMC Equity Valuation, Risk and Investment: A Practitioner's Roadmap Peter C. Stimes ISBN 0470226404 OWmaOlvT9XEC The Blackwell encyclopedic dictionary of managerial economics Robert E. McAuliffe ISBN 0631214836 AEqZjqQrJo4C Quantitative methods for finance and investments John L. Teall, Iftekhar Hasan ISBN 0631223398 7OQCrPNidF4C Financial engineering and computation: principles, mathematics, algorithms Yuh-Dauh Lyuu ISBN 052178171X NZnk5C2r8qEC International economics: theory and policy Paul R. Krugman, Maurice Obstfeld ISBN 0321553985 ND2aoovv9W0C The Oxford guide to financial modeling: applications for capital markets, corporate finance, risk management, and financial institutions Thomas S. Y. Ho, Sang Bin Lee, Sang-bin Yi ISBN 019516962X PYS6S1L62akC Beginning Mac OS X programming Michael Trent, Drew McCormack ISBN 0764573993 G5I91YaDkrgC The Handbook of Exotic Options: Instruments, Analysis, and Applications Israel Nelken ISBN 1557389047 1gGiKQyAoJAC Investment management for insurers David F. Babbel, Frank J. Fabozzi ISBN 1883249473 5qj02oqoTFsC Bond Portfolio Management Frank J. Fabozzi ISBN 1883249368 Rh6zKZgJhzEC The handbook of equity derivatives Jack Clark Francis, William W. Toy, J. Gregg Whittaker ISBN 0471326038 9sccOKmyUcoC Stocks for the long run: the definitive guide to financial market returns and long-term investment strategies Jeremy J. Siegel ISBN 007137048X Wl4b8BVI5SoC Stock market liquidity and the macroeconomy: evidence from Japan Woon Gyu Choi, David Cook, International Monetary Fund, IMF Institute Tgom7z7wuPAC Asymmetric returns: the future of active asset management Alexander M. Ineichen ISBN 0470042664 2Rk3A0B4epwC The handbook of fixed income securities Frank J. Fabozzi, Steven V. Mann ISBN 0071440992 uGTrQmGVy6AC Developments in Collateralized Debt Obligations: New Products and Insights Douglas J. Lucas, Laurie S. Goodman, Frank J. Fabozzi, Rebecca Manning ISBN 0470135549 uGgrMwDfBRsC

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#3) On July 01, 2009 at 11:10 AM, cthomas1017 (77.02) wrote:

Alstry... is that you!?!

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#4) On July 01, 2009 at 12:10 PM, Mary953 (66.50) wrote:


Your intellect is staggering and you make the assumption that everyone is at your level.  They are not.  This is why Ayn Rand couched her philosophy in terms of fiction in Atlas Shrugged.  Jesus set his lessons into parables, Aesop taught in fables. 

You have produced a staggering book list for the true student of economic theory, but less than 1% of CAPS will be able or willing to tackle the subject matter at this level.  True, this may be the 1% that actually is able to make a good living in the market, but perhaps you might consider the rest of us as well.

We would be truly grateful to learn some portion of what you have to teach, but the math is more than I can deal with.  Perhaps there are others like me who could learn from a simplfied version of your academics.

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#5) On July 01, 2009 at 5:01 PM, portefeuille (99.56) wrote:

In comment #3 above I have simply listed the latest additions to my google books library.

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#6) On July 01, 2009 at 5:20 PM, portefeuille (99.56) wrote: Principles and Practice of Clinical Virology A. A. Zuckerman, Arie J. Zuckerman ISBN 0470517999 pDBZ0j4Vc-4C

I guess this shows that some of the books listed are somewhat unrelated to the intended subject ...

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#7) On July 01, 2009 at 6:20 PM, TigerPackFund (< 20) wrote:


Please send the 5 "best" blue-chip or mid-cap stock picks you can dream up to the email address creation at your leisure.

Adding 4 or 5 long-shot biotechs won't help us get the high accuracy score I would find most appealing.  Try to pick 5 stocks that will outperform the market by 10%-25% the next 12 months.


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#8) On July 01, 2009 at 6:28 PM, portefeuille (99.56) wrote:

okay. I will send you 5 new ones.

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#9) On July 01, 2009 at 8:31 PM, portefeuille (99.56) wrote:

Having read the preface I am already fairly convinced that I will like the book by Mandelbrot.

The second last sentence of the "preview" above really made my day!

The layout, by the way, appears to somewhat resemble that of my posts ...


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#10) On July 02, 2009 at 2:16 AM, checklist34 (99.73) wrote:

porte if you read all those titles you can be my hero for a day.

what I wonder is this:  if I expand my understanding of investing beyond that that I've picked up by and lrage from osmosis, reading here and there, and here again, talking to my advisor (who is in mensa), and reading Dreman...

will i be better at it, will I make more money, or not?

complicator -vs- simplifier, limited capacity of the human beast to process information, and the analysis paralysis and subsequent over-conservatism in thought and action that often seems to afflict those higher up on the education rungs. 

I politely observe that my returns so far bettered those of any fund I am aware of since I began.  If I was an edumucated man, broadly knowledgeable in all that the investing world had to teach, would that be true?

Or would, in all my worldly knowledge, I have been too scared to plow money into ASH, XL etl al earlier in the year and instead have loaded up on WMT?

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#11) On July 02, 2009 at 4:29 AM, portefeuille (99.56) wrote:

I think I can accommodate both knowledge and naïveté (people still tend to call me "Spielkind"). No reading has kept me from buying stuff like that so far. Please let me know when you start noticing a shift in the character of my list!


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#12) On July 02, 2009 at 10:16 PM, checklist34 (99.73) wrote:

i hadn't seen the list before, I don't think... or if I had I hadn't scrutinized it. 

I can accomodate any level of intellectualism except ignorance and the paralysis that comes with education and achievement, and apparently leads to "being wrong" being a very negative event -vs- an "oh screw it, try again" event.

In a former life as a chemist (in which I am not trained, but a field in which I have had alot of professional success) I will note that a typical pHD is very gun-shy about trying things and brainstorming, they tend to revert quite quickly to "efficient market" logic like "if its that easy why aren't people doing it?" or "thats been tried before".  4 year guys have a more productive attitude of "oh what the hell, it won't kill us to try".

its as if success in education and academia breeds fear of failure, as if trying or guessing and being wrong would be too painful to bear, so they become stagnant.

In their stagnation, they definitely do not tend to reach (bell curve) the top levels of success, and then they become angry and develop a sort of counter-culture bearish-on-society attitude.  

It is, my very intelligent friend, the story of thinkers-vs-doers.

Imagine a world in which there were only two kinds of people.  Thinkers and doers.  Thats it.

For the example and disucssion below, i'd like to ask any reader to assume that both "thinkers" and "doers" are intelligent, in fact above average intelligence.  That will become important later to prevent thinkers who read this from labeleing and boxing and belittling doers (which in my experience is a typical outcome without this disclaimer).

To imagine what I mean by "thinker" and "doer", just imagine a college keg party, two boys, and one cute girl (in and among the 50 or 100 others).  The boys are split, one a thinker, one a doer. 

Our fine-feathered thinker looks at the cute girl and thinks "boy, i'd like to go out with her.  but what should I say when I go over there, should I say she's pretty?  no, that turns girls off, should I say i'm cool?  am i cool?  do i look ok?  i'm definitely a great guy i got good grades and i'm cool but what do i ..."

too late, the doer just walked over and said "hey, whats up, lets go talk on the couch".

And here's where the comparison of htinker and doer gets interesting to me.  Maybe the cute girl from this little fable went ot the aforementioned couch to talk to our doer...  maybe she slapped him in the face.  

But, and this is what fascinates me about thinkers, it doesn't matter.  The thinker already hates the doer, no matter what the outcome.  Because the doer possesses the one trait that the thinker ultimately lacks, no matter how much better at everything the thinker may or may not be.  The willingness to try and expose him (or her)self to failure.  

And that willingness to try and fail, the apparent confidence or recklessness that it implies, angers the thinker.  

And we have a massive rift, visible all through our society, and at its core to no small extent is the conflict that thinkers feel towards doers.  I cannot imagine that doers ever really resent or hate thinkers.

In thier professional lives, thinkers tend to gravitate towards attitudes that are anti-society, because always, always, never with any exception, the people that succeed the most in any aspect any arena (besides, perhaps, raw academia like professors or whatever) of society possess at least considerable "doer" traits.  

Thinkers look at themselves and think, i think, "i am good, i am smart, I am intellectual, why is he so much better off" as they look at a doer drunk and stumbling and bellering with glee over the days achievements.  They wonder why the doer has more.

And a rift develops.  Doers are not universally successful.  They litter both the fortune 400 and the gutters of New York City (alongside alot of pepole who are neither thinker or doer, but just plain worthless).  They tend to live lives that have binary outcomes, their lives are diodes.  On or off, win or lose, no middle ground.

Thinkers tend to only have middle ground outcomes.  Too afriad to start a business and risk going broke... too afraid to move to hollywood and just try, they always wind up in the middle, nowhere.  Professors are probably usually thinkers.  The saying "those that can't teach" comes to mind.  

Thinkers tend towards the leftist liberal side, attempting to wreak their revenge on the doers by condemning their "deeds", their "doings".  Anti business, anti society, anti wealth, anti everyting.  Hence, again, professors and their massively liberal-propaganda-infused median curriculum.  Its unreal the deluge of liberal propaganda that hits college kids in this country.

Doers tend to be libertarian and just not care what others do as long as they aren't messing with them (the doer).  

Proabably the most successful people in anything have the strengths of both groups.  A certain amount of lack of recklessness (thinker) and willingness to form a good plan (thinker) combined with the willingness to ultimately take what is at least somewhat a reckless risk (doer) and jump in with both feet (doer).  

Here on CAPs the bears by far seem to exhibit the traits of "thinkers" while most "doers", presumably, don't spend much time posting on the internet and as such are vastly underrepresented on web blogs.  

In extreme cases, I suppose thinkers go with the popular opinion of the day, conservatively, and follow some generic rule about bonds and stocks each being a certain % of their portfolio.  The doers, in an extreme case, probably gamble it all on biotech speculation.  Who konws.

I suppose I possess the worst traits of each group, or if anybody wants to give me a wild benefit of the doubt, the best traits (or best and worst) of each group.  

But excessive education creates thinkers out of what could maybe, possibly, otherwise have been a perfectly productive doer.  And thats a shame that benefits nobody.


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#13) On July 02, 2009 at 10:43 PM, portefeuille (99.56) wrote:

Did you fit me into one of those categories? I am really not he most talented guy. I have mentioned the intelligent people I know in comment #5 here. You would like some of them. The "one of my best friends" guy is of the Stephan Banach kind (see comment #6 of that post). I am sure you would enjoy trying to outlast or outdrink him!

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#14) On July 02, 2009 at 10:55 PM, Mary953 (66.50) wrote:

Checklist - There is not a problem with education.  There is, however, a bit of frustration that comes from education that seems to rely more on demonstrating the erudition of the author/teacher and less on actually conveying information from one person to another.

More than once as a librarian, I referred adults to the children's section to begin with a basic knowledge of a topic.  It was a good way to find a quick easy way to get a grasp of basic terms and framework to fit them into. I recommended this before the "Idiot's guide" series guides came out for essentially the same purposes.

My earlier comment on this blog was a request to Porte, knowing his great ability and knowledge on this subject - not a condemnation on his grasp of the more complex books available.

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#15) On July 02, 2009 at 11:00 PM, checklist34 (99.73) wrote:

porte, i don't fit you into any class or category.  my defining comment on porte is this:

porte, you are a fountain of knowledge that only slowly exposes itself

I am a fountain of opinions, and sometimes, insights, but thats not as good.  :)  You are outstanding in all of the blogosphere.

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#16) On July 02, 2009 at 11:15 PM, portefeuille (99.56) wrote:

I think I have the doer gene to some extent. I have worked for two companies (in semester breaks). In one of those I was to assist the equity analysts. After a few days I was the first to be there in the morning (I was paid by the hour, so it did make sense to come that early). They told me to answer the phone and tell people to call back later. After a few of those early morning calls (usually someone from "the press" who wanted to know "what to expect" for the trading day) they (the journalists) asked me whether I could not tell them something "right now". I told them again that I was just an "intern" but if they insisted I gave them a maybe 5 minute summary of the "overnight action" (late U.S. and Asia trading) and some of the news I had picked up from our Reuters system. I told them that that was "inofficial" and that they should call again in an hour. After a while some of them did not bother calling "the real analysts" later. In the second one I was assistant (or "intern") of the CFO of a small media buying and planning agency. When they were trying to win the budget of a company from the "financial sector" they thought it was a good idea to have me around when we made our "pitch". They liked our presentation and I was made "consultant" for that new customer. Then we found out that the CFO had screwed up and they made me "interim" CFO. And I was a physics and mathematics student!

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#17) On July 02, 2009 at 11:16 PM, portefeuille (99.56) wrote:

You are outstanding in all of the blogosphere.

thank you. that is really too much!

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#18) On July 02, 2009 at 11:16 PM, mistermiranga (98.04) wrote:

checklist- the thinker/doer comment should be a post of its own. nice...

porte- it has taken me awhile but I am starting to get you. a couple of college professors I had stick out...i didn't like them at the time but i regret not taking the time to understand where they were coming from.  

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#19) On July 02, 2009 at 11:25 PM, checklist34 (99.73) wrote:

Mary, I am not condemning education in a blanket-statement manner, I am discussing its limitations.

I had dinner a couple weeks ago with a fairly high up exec from a massive European company (massive like P&G, not massive like fortune 500) who bought my business some time back.  He was, as many Europeans are, highly pro-education, highly condemning of the US (again, as many Europeans are) as being too capitalist, too many poor people (i asked, who's poor here?  you can live for free off the government if you are simply useless, how is anybody poor except by choice?).  

I just pointed out that his company spent a kings ransom to buy a company owned by a couple of uneducated yanks because we'd figured out things they couldn't, despite having the biggest R&D dept in this rarified field extant.  In my opinoin, our success was underlayed by the fact that we entered the field with open minds, whereas everybody else in what is more or less a hypertechnical field had very rigid pre-educated outlooks that prevented them from seeing "orange" in a world of red and yellow.

I don't condemn education, I simply wish to point out its considerable limiations.  As I see them

1.  you cannot be taught to do something truly valuable, because to do something truly valuable requires either A) intangible stills not on any curriculum or B) doing something nobody did before which is, of course, not teachable

2.  it tends to build minds into boxes, it tends to teach them not knowledge or facts, but to think in a certain way and, frankly, to sort of eschew alternate streams of thought

3.  it tends to breed "thinker" behavior in extreme cases, fear of failure.  what does a kid off the street care if he tries and is wrong?  nothing, he has nothing to lose, so why not try?  what about a pHD?  what if a pHD hypothesizes and is beaten by some uneducated checklist?  thats risky (so it seems, to me,in the mind of the pHD).  It breeds inaction, education does, that is.

#1 is the key here.  Information/konwledge is called "google" today, its readily available on an epic scale.  

Whats difficult is application of that knowledge, ...  

You can't train an entrepreneur or an inventor, they need to do something nobody else ever did before by the very nature of their existence and purpose. 

And in my view they are the greatest contributors to societies overall well being.  

And I wonder if education stifles those traits rather than promoting it?

And I am a huge fan of idiots guides.  My one and only guilding book on investing is more or less an idiots guide...  Dremman's mid 90's book on contrarian investing is w/o any doubt an idiots guide.  :) 

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#20) On July 02, 2009 at 11:36 PM, checklist34 (99.73) wrote:

porte:  i never, ever, try to outdrink europeans.  In fact, when sitting down to drink with them, i usually explain that I only drink on celebratory days and aren't very talented at it and warn that they will soon witness an extrmeely drunken american that will probably burn downt eh building.

my theory is:  when I don't burn down the building they are impressed by my restraint.


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#21) On July 02, 2009 at 11:38 PM, portefeuille (99.56) wrote:

I forgot to tell the "almost scary" part of the story. Next to the research guys were the proprietary and "customer" trading guys and I developed a simple arbitrage strategy for them (it worked, but nothing spectacular ...). The main trader was somewhat "impressed" by the spreadsheets I used (people are easily impressed, especially when they don't know anything about a subject). He asked me to make one for him. He did a lot of trading in one particular stock (he was a major part of "the market" for that stock) for a major customer. I made one up that let him enter the number of shares he was supposed to buy or sell and the time period during which the trading was to take place. I asked him whether he wanted to be able to use different "weights" and he said that he just needed it to tell him how many shares he needed to buy in a certain period (so equal weights for all sub-intervals, he did the weighting within those sub-periods himself). So I "designed" a spreadsheet that let him enter the time period and the total number of shares and let him chose between 15 minute, 30 minute and 1 hour sub-intervals. Most 10 year olds could have done that. The scary part is that he did not tell me that he wanted to use it to buy in the order of 1 billion euro per day using my spreadsheet. He told me that only weeks later. So an error in my spreadsheet (say a factor of 2 in a formula) would really have had a "serious" effect. I spent around 15 minutes on that spreadsheet job and I  was paid 10 EUR/h so I spent 2.5 EUR worth of work time on this "billion EUR trading gadget" ...

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#22) On July 02, 2009 at 11:48 PM, checklist34 (99.73) wrote:

porte, please take my compliment and I hope it means at least something to you.

Mister:  thanks very much, I have always liked the thinker-vs-doer commentary since I thought it up.

In one limited way its a case of the Prius vs the Hummer.  The prius is a thinkermobile, the H2 is a doers testament to his/her own achievement.  I think in its day the H2 had 78% owners that were entrepreneurs, which is unreal considering that a vastly smaller % of people are entrepreneurs.  Why would they draw to that big monstrosity?  Because, without any question, it is what it is, its big, its bold, its silly, it veritably screams "look at me, I made a buck my own way".  I know of no other vehicle thats quite like that thing, its one of a kind. 

The prius screams "i know its a $20k car, but its "right" and its the "right" thing to do, and I read it was good, and i'm so good, i'm so good, please tell me i'm good".  A thinkers car. 

I've owned both vehicles, so I can't be condemned for that commentary. Today the prius is destined to the mainstream and, ultimately, oblivion as people realize taht A) there is no global warming and B) a hybrid and its heinous battery pack is hardly enviro-friendly.  The H2 is destined to the trailer courts and then the junkyards as its value plummets.  

tell the truth:  would you think better of someone in a prius or in an H2?  the media sure promots the prius and condemns the H2.

But hte guy in the H2, folks, has a 78% chance of being someone who created jobs, created wealth, created "betterness" for his/her society.  The prius is quite likely someone, in my experience, who hasn't really thought htrough the consequence of their actions or their votes or their view or their opinoins.



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#23) On July 02, 2009 at 11:51 PM, checklist34 (99.73) wrote:

i meant intagible skills, not intagible stills


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#24) On July 02, 2009 at 11:52 PM, portefeuille (99.56) wrote:

The scary part is that he did not tell me that he wanted to use it to buy in the order of 1 billion euro per day using my spreadsheet.

The scary part is that he did not tell me that he wanted to use it to buy in the order of 1 billion euro per day.


And I should not have mentioned that "he was a major part of 'the market' for that stock" that early. I have to improve my timing ...


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#25) On July 03, 2009 at 12:02 AM, checklist34 (99.73) wrote:

i read your first paragraph about your career, porte, thats aweome.  as a poor midwestern farm kid w/o a degree, nobody ever took me seriously until they had to, I love that you got ahead of that curve.

the 2nd part of that story is really good.... hee hee.  the main trader sounds liek what I sometimes call a "hoper",someone who neither takes their own action or necessarly responsiblity for it but who acts in the hope that said action leads them to success.

 here in the Us we havea coin called a "dime", that may be all my thoughts are worht right now.  I'm very grateful thatIbought some puts on SPY yesterday and carried them into today, sold them for a profit.  Because 90% of the stocks in my real world portfolio were down...  but htat helped take the sting off.  

And like porte I continue to look at the market as relatively boring since april options day.  pretty much flat... 

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#26) On July 03, 2009 at 12:14 AM, portefeuille (99.56) wrote:

And like porte I continue to look at the market as relatively boring since april options day.  pretty much flat...

thanks for the laugh! we are very much aligned on that.

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#27) On July 03, 2009 at 12:33 AM, portefeuille (99.56) wrote:

I am so glad that no one minds the discussions in the comment sections to my blog posts drifting along in a rather chaotic way. Thank you to all past and future participants!

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#28) On July 03, 2009 at 12:36 AM, checklist34 (99.73) wrote:

porte, i doubt anybody finds the comments in your blog boring.  at least, since i post in them often, i hope they don't.


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#29) On July 03, 2009 at 5:53 AM, portefeuille (99.56) wrote:

That trader using my spreadsheet always had a large blue cell phone lying next to his table. I usually had to come to his desk to talk to him because he needed to "watch the market with one eye". When that phone rang conversation was over. "It's them ...". Every once in a while he mentioned that "even his wife" did not have the number of that cell phone. Years later there was a rumour mentioned in the press that an unnamed trader from this company was involved in a major arbitrage bet for that customer that "went wrong" and turned out to cost that customer quite a bit of money when it had to be unwound. It was always "an unnamed trader" and I still have the feeling that that cell phone played a role in that deal. Maybe even my 2.50 EUR spreadsheet but that one was flawless, I had checked it quite a bit after he told me about the size of his trades and the arbitrage that went bad was more of the LTCM kind, not one that was caused by some factor of 2 missing in a spreadsheet. That's all folks ...

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#30) On July 03, 2009 at 12:13 PM, rofgile (99.33) wrote:

Porte: nice blog, good thoughts.

 I'd second the Kashoosek pick of "Godel Escher Bach", and also would like to highly, highly recommend the book "Surely You're Kidding Mr. Feynman"

Feynman is the antithesis of the thought that you can't be both a thinker and a doer.  I love to read autobiographies such as his, because the world truly does have some amazing people in it.  I think Obama fits in this category of truly interesting doers/thinkers - I'm reading his book "dreams of my father" - he wrote this book at age 33 while still in law school.  Its truly a good book/ good read.  I find it amazing that some people can be both great writers, great leaders, great thinkers all at the same time - and spend their lives doing stuff.

I'm working on a PhD right now, to a large extent it has taken over my life - and in some ways I feel the loss of confidence in just doing a new idea.  However, at the same time - it has shown me that it is possible to do most things that I thought took great skill / great training or were beyond me before.  Recently I bought my own kiln and started doing ceramics, just on a whim - and its been really fun and great.  Now I bought a melting furnace and am getting into sterling silver and bronze casting.  

I don't think that its possible to get too educated, or think too much about the world.  Those things don't prevent getting stuff done or make you too academic.  However, it is good not to get bogged down in your work and projects to the point where you lose the energy to enact your own creative goals.  


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#31) On July 04, 2009 at 9:21 PM, Mary953 (66.50) wrote:

Porte and Checklist - My comment/concern early on was that this post would become a booklist and sink into oblivion.  I liked the idea and had a feeling that there was this wonderful conversation hidden and waiting to be explored.  I was headed away from computers and wasn't going to be around so my comment was basically "Don't just stop with a list of books - You have so much to say!"

I'm back, The conversation was fascinating, thank you for letting me listen in!

And my idea of the two most limiting factors on anyone - What you belive that you can accomplish (or believe that you cannot accomplish) and what others believe that you can or cannot accomplish.  The first is the most limiting because it will govern what you are willing to attempt.  The second limits you only in the limit that it puts on what you are allowed to do. 

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#32) On July 18, 2009 at 10:46 AM, portefeuille (99.56) wrote:


a guide to my blog posts can be found in the comment section to this post

(should be or should be close to the last comment)                                                                


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