#66, When Wall Street Goes South

Small Boat At North Shore, Waimea Bay, Oahu, Hawaii, May ‘08, artistic view, map.


Small Boat And Lava Rocks, North Shore of Oahu, Hawaii, May ‘08, artistic view, map.

So it happened! The Large Hadron Collider (LHC) suddenly stopped working, shortly after it was switched on. Some expected things to quickly become vary dark, as in black holes, but initially nothing happened, than a transformer blew up and helium leaked. Now everything is quiet again, and will stay that way for many months to come. No new particles were found, no black holes created – at least that we know about, just another transformer got fried. So for now, let us move this subject of the front pages.

You have heard of another meltdown, this time on Wall Street. And this one is indeed very serious; the well-known financial institutions are collapsing indicating that the whole financial system is in trouble, perhaps reminiscent of 1930’s. The federal government is offering help, assistance, and bailout – whatever you want to call it. Should not troubled institutions be allowed to fail, especially since the failure happened mainly because of their own mismanagement? Why prop something that is not worth much any longer, and is only draining huge amounts of money? Apparently the federal government thinks different, and talks about pumping more money into the bankrupt institutions. The news now is that even Warren Buffett is trying to save another institution in trouble – Goldman Sachs, in a move very uncharacteristic for that extraordinary investor. And truly, what are we supposed to think about this country if Wall Street is beginning to crumble?

Aloha everybody!
Another subject. The Hawaii Superferry is in full operation, after many long delays. We thought we write a word about it, since in the past only troubled news was available. Not anymore, from Honolulu on Oahu to Kahului on Maui the service is working fine, with $49 to $59 fares, twice daily. If only people were visiting Hawaii as often as they used to! So the Superferry and Wall Street are linked together after all, we are not talking here about isolated events.

You already know that the weather in Hawaii can change dramatically in a very short time. It never changes that fast in California, for example. You need to be prepared, or you can find yourself in a dangerous situation. For example, flash flooding is one of those situations that comes to mind. Same is true when swimming in some places, North Shore east of Haleiwa, and Sandy Beach are two places from our own experience, that can be quite unpredictable, and where one should take appropriate precautions. If you follow several simple safety tips, things can be very enjoyable. Now wash all the sand of your body, actually this seldom works well at the beach, drive back to the hotel, and keep washing away all remaining sand that refuses to go away. The places it tends to stick to, we are not going to write about on those pages.
Mahalo everybody!

Book: Steve Caplin, Art & Design in Photoshop, Focal Press, ISBN 978-0-240-81109-3. My favorite art book at this moment.

MP3 music: http://002e972.netsolhost.com/ .

#65, Uncertain Times

Nothing To Do At Ewa Beach, Ewa, Hawaii, October ‘07, artistic view, map.


Under An Orange Cloud, Sunset Beach, North Shore of Oahu, Hawaii, October ‘07, artistic view, map.

These are indeed uncertain times. Some of that sentiment has already been reflected in newspapers, on TV, in videos, on the web, and even in this blog. Today we are going to add an additional data point to our discussion on uncertain times. Let us look at the stock market that I mention on these pages from time to time, although recently you have to have plenty of optimism to see anything positive on the horizon. Actually this work started near two years ago, on 11/18/06. Back then I decided to prepare several model stock market portfolio and track those portfolios for almost two years. Today we can show how well you would do if you invested in any of those portfolios. For the simplicity, we decided to invest a million dollars in every one of the mentioned portfolios. It is an easy amount to remember, and not the real amount that somebody may have invested. All stocks bought on 11/18/06 were held, nothing was sold, but some companies stopped trading during that period. We did not reinvest the money. Now about the portfolio choices. Two well-known investors were modeled through those portfolios: Warren Buffett and Bill Gates. Also, Joel Greenblatt’s well-publicized Magic Formula of investing is looked at for comparison. How reliable is our information? It is based on information published on the web, and in investing books and literature. It is believed to be fairly reliable but certainly is not 100% accurate. All investing details, I am sure you agree with me, are not revealed to the public.

These are companies and shares included in the Buffett’s Portfolio: American Express 3067, Ameriprise Financial 484, Anheuser-Busch 879, ASD* 202, Coca-Cola 4047, ConocoPhillips 362, Costco Wholesale 104, FDC* 202, Gannett Co. 69, General Electric 154, H & R Block 229, Home Depot 82, Iron Mountain 102, Lowe's Companies 14, M & T Bank 134, Moody's 971, Nike 47, OSI* 37, PetroChina 14, Pier 1 Imports 67, Procter & Gamble 2023, Sanofi-Aventis 9, Sealed Air 14, SunTrust Banks 64, SVM* 79, The Western Union 202, Torchmark 67, Tyco International 202, United Parcel Service 27, USG 132, Wal-Mart Stores 402, Washington Post 34, Wells Fargo 3857, Wesco Financial 114.
The five biggest investments in this portfolio are: Coca-Cola, Procter & Gamble, Wells Fargo, American Express, and Anhauser–Bush. Companies marked with * no longer trade.

These are companies and shares included in the Gates’ Cascade Investment Fund Portfolio: Alaska Air Group 261, Canadian National Railway 3470, Crown Castle International 8103, Fisher Communication 149, FS* 144, ICOS* 1772, Otter Tail 497, Pain Therapeutics 613, Pan American Silver 1690, PNM Resources 1223, Republic Services 5985, Schnitzer Steel Industries 161, Seattle Genetics 1165, Six Flags 3383, Sprint Nextel 4225.
The five biggest investments in this portfolio are: Crown Castle International, Republic Services, Canadian National Railway, Pan American Silver, and Sprint Nextel. Companies marked with * no longer trade.

These are companies recommended by the Magic Formula of investing site: Alon USA Energy, Biovail, BSG*, Career Education, CGI Group, Fording Canadian Coal, Freeport-McMoRan, Frontier Oil, H & R Block, Headwaters, Holly, Kinetic Concepts, King Pharmaceuticals, K-Swiss, McClatchy, Net 1 Ueps Technology, NSS*, Pacer International, Palm, Patterson-UTI Energy, Southern Copper, Teck Cominco, Thor Industries, Western Refining.
An equal number of 1422 shares were used for all companies in the portfolio.

All portfolios were set up on the Morningstar.com portfolio.morningstar.com web site and all data comes from that site.


Value Of Three Model Portfolios, Santa Clara, California, September ‘08, real view, click to enlarge. The time scale is from Oct. 1, 2006 to Oct. 1, 2008. The initial investments were equal to $1.0 million. Note that all three model portfolios lost money in the last two years.

This is how those three portfolios performed in the last two years. The magic formula worked wonders for many months, then started to go down very fast, and now is the worst choice of all. The Buffett’s Portfolio did not do much in the first year, but then is started to go down, and still remains off from our initial investment. It is however, the best choice of all three model portfolios. Gates’ Cascade Fund was doing poorly basically all the time, and still remains off. These portfolios might indicate that in uncertain times, perhaps nobody does well. If you know of better examples let me know. But only the hard data, please, and not good stories told by somebody.

Berkshire Hathaway, Inc.: berkshirehathaway.com .

Book: Joel Greenblatt, The Little Book That Beats the Market (Little Books. Big Profits), John Wiley, wiley.com, ISBN-10: 0-47173-306-7.

Magic Formula Investing website: magicformulainvesting.com .

MP3 music: http://002e972.netsolhost.com/ .

#64, Most Popular Tags In Blogging

Rain In 5 Minutes - Sun Back In 10 Minutes, Waikiki, Hawaii, October ‘07, artistic view.

I saw a list of most popular tags used in blogging, on Technorati.com. Below is a slightly polished, and reformatted version of that list. All foreign language words, and multiple-listed words have been removed. If you are looking for good tags for your own blog, they are most likely already listed here.

Apple, art, articles,
blog, blogroll, books, business,
celebrities, culture, current affairs,
daily, design, diary, dreams,
education, entertainment, events,
family, fashion, film, food, football, friends, fun,
games, goals, Google,
home, hopes, humor,
Internet, iPhone,
jobs,
life, links, Linux, love,
marketing, media, Microsoft, miscellaneous, mobile, movies, music, MySpace,
news, nightlife,
parties, people, personal, philosophy, photography, pictures, plans, podcast, poetry, politics,
quiz,
random, relationships, religion, reviews, romance,
school, science, shopping, software, sports, survey,
technology, thoughts, topics, travel, TV,
video,
web, weblog, WordPress, work, writing,
YouTube .

MP3 music: http://002e972.netsolhost.com/ .

#63, And Black Holes

Looking Up, East Oahu, Hawaii, October ‘07, artistic view.


Sometimes Things Tend To Bend, North Oahu Near Kaena Point, Hawaii, October ‘07, artistic view.

How many of the Hawaiian Islands can you name? Probably most from the well-known islands, tourist places. However there are many more, from North to South: small islands, atolls, and reefs - Kure Atoll, Midway Atoll, Pearl and Hermes Atoll, Lisianski Island, Laysan, Maro Reef, Gardner Pinnacles, French Frigate Shoals, Necker, Nihoa; main islands - Niʻihau, Kauaʻi, Oʻahu, Molokaʻi, Lānaʻi, Kahoʻolawe, Maui, and Hawaiʻi. And there are also plenty more small islets. Total of 137, although higher numbers are sometimes quoted as well, low tide, high tide?

Steve Jobs answered the rumors about his death by quoting Mark Twain during the San Francisco Apple event – “The reports of my death are greatly exaggerated.” Unless that was fake_steve_jobs?

And how dangerous are those black holes that are created in the Large Hadron Collider (LHC)? Well, there are many rumors, you’ve heard them all by now, I am quite sure. Some people are plain scared; some smart scientists are explaining that those are very tiny, and not dangerous. How do they know, nobody has ever seen anything like that? Last night I am certain, I heard something in the bushes that was making loud chewing noises. No, it was not a dog, or maybe it was a dog being chewed up. I ran away, I am not going back today to check. Could one of those black holes be already in my neighborhood? We will be watching!

Happy birthday to me!

MP3 music: http://002e972.netsolhost.com/ .

#62, Another Fairly Hot Night

Another Lazy Afternoon, Waikiki, Hawaii, October ‘07, artistic view.


The Horizon May Be Tilted, But Who Cares!, Waikiki, Hawaii, October ‘07, artistic view.

Yet another hot day, and the same is supposed to be true again tomorrow. We will survive for sure, but the evening exercise part has to be moved well deeper into the evening, since it is quite unpleasant at earlier hours. The cooler air breeze turns your mind away from daily routine activities, and into a very relaxing mood. Do not forget to go back to sleep, because walking till very early morning hours suddenly sounds very tempting.

Do you write your blog entries in text, html, or use a special software that generates the html code for you? I noticed myself that in order to prepare a fairly good-looking blog, you need to use a bit of everything. Using a simple text editor is the simplest method, but it has some disadvantages. It probably has no word spelling, for example, and you do not want to publish what you just typed in, so a Microsoft Word comes handy. You can arrange your thoughts now, check spelling, move paragraphs around, etc. The title, picture captions, and tags are also checked at this stage. Also copyright info is enclosed. No need to pay much attention to formatting at this stage, just paragraphs separated by extra empty lines. Next all text is printed and corrected till it looks acceptable. I never generate the html code directly from Word, although it could work fine. Then, I have html templates prepared in plain text in BBEdit, from previous blog entries. The templates are reusable, thus save some time. Now I place all text from Word into BBEdit, without paying much attention to formatting. Inside BBEdit, I usually add all extra html code that is needed, for example from Google Docs, formatting, extra links. This can now be previewed for the very first time, and most obvious mistakes corrected. There are still no pictures in the blog.

Then everything goes to Blogger. Then pictures are added. Adding more than a single picture involves some juggling around, try it. Now the real preview is undergoing its moment of truth. Actually the previewing part is not exactly 100% correct. What you see on screen is not what is going to show up in the final version. This is not good! If you publish your blog at this time, you risk showing your subscribers a half-baked product. You really do not know how the final thing is going to look like. You can check if the extra-added html is actually doing what it is supposed to, whether Google Docs is updating to the latest version of your document. It is also time to make some words and sentences bold or italic so they would stand out. All of this is not perfect, but by trial and error you can get very near your imaginary goal. Is WordPress better? If somebody is thinking about software that would be an interface to Blogger, for example, then remember that every time somebody at Google changes something, you need to change as well, otherwise your product is always going to be handicapped. So we managed to publish yet another blog, ads are flashing in front of our eyes, and advertisers' money keeps rolling in – oh, really?

Are my entries too short, too long, too random, or in “what are you doing” category, get a life? Every time I start to write, those things come to my mind. You need to be in sync with whoever reads your entries, you want to be informative, a little bit entertaining. I make sure that you can actually use something in your own work. That is my silent goal! Hope this works!

Two pictures for this entry are already prepared. Sometime along the way, I am going to discuss how the pictures end up looking the way they look like. It is another useful piece of information.

An iced tea with lemon, always tastes good this late at night. And a glass of cold Sauvignon Blanc. Now the editing and publishing time, following steps I just described.

Google™ is a trademark of Google, Inc.
Microsoft™ is a trademark of Microsoft Corp., Inc.

Microsoft Word from Microsoft Corp., Inc.
BBEdit from Bare Bones Software. It doesn’t suck.^®

MP3 music: http://002e972.netsolhost.com/ .

#61, How Not To Get Wet

Memorable Sunset At Ewa Beach, Ewa, Hawaii, October ‘07, artistic view.

After promising last time not to jump head first into ads, you notice something new on top of this page. Yes indeed, those are Ads by Google. Now I am officially selling condos in Hawaii, vacation packages to Hawaii, and if first two are too expensive for you – sheet music. Prices would be approximately $700,000 and up for the condos, $120 and up per night for a stay in a hotel, and $4.95 for the sheet music. I’ve been using the last two options – both are good, with the very last one enhancing your artistic creativity. If you go ahead with the first one and buy an oceanfront property in Hawaii, on any of the several islands of your choice – congratulations, just send me a note and include lots of pictures. I promise to use them in my blog once I up the colors a little bit in Photoshop.

Now seriously, all of this is very experimental and I am learning more and more every day about all aspects of the blog and web sites. Writing blog entries is actually quite fun; it forces you to an extra mental activity almost every day for at least an hour, and sometimes longer. Deciding on a blog appearance, taking care of pictures, etc. is also fun. I like to depart from regular, very technical activities, and spend time on artistic aspects of web sites, music, and photos.

Regular shopping is done for today. Have you noticed how much prices are going up on almost everything grocery related? Week by week the prices are higher, and the recession is supposed to peak around December. That what I heard, or read somewhere. Let us hope things are going to improve at the beginning of 2009!

On the radio, I am hearing even on a classical music channel, how to save gas by driving slower. It is a very unusual subject for such a radio station. You can play any music at any tempo, even prestissimo, but drive slow, you mean like 30 mph all the time? Indeed bizarre!

September is usually quite sunny and hot in California with no signs of rain. If you happen to take your vacations at that time, you are very lucky. However, most people traditionally take time off during June, July, and August. So if you are smart, you can get an excellent weather and slightly lower prices since September is a bit outside of the season’s peak. You can get the whole beach to yourself, and even get naked if you like! No, please do not do that, and don’t tell anybody who sent you! There is no sign of wind around, but something blew me way off course. Hope you put your clothes on by now. A beautiful suntan everywhere, remains.

Time for a walk, it is much cooler now at night. Did you find a clever way to avoid those pesky water sprinklers that turn on at night? Every time I walk, I end up wet because those tend to spray water all over the place. Maybe somebody could invent red/green lights when to stop and when to go! Otherwise it is hit-or-miss.

Now the exciting editing and publishing parts begin.

Google™ is a trademark of Google, Inc. Swarovski™ is a trademark of Swarovski AG.

MP3 music: http://002e972.netsolhost.com/ .

#60, Thoughts From The Mall

Walking On Ewa Beach, Ewa, Hawaii, October ‘07, artistic view.


3 For $5, Waikiki, Hawaii, October ‘07, artistic view.

It's again another hot day, and a sticky one on top of that. Not the one I like most. 75F is fine with me but 90+F is a bit too much. Need to get something to drink, fast.

Spent this morning preparing a package to be shipped to an eBay customer. It has been a while since I sold anything through eBay. The site has changed, it is actually more difficult to sell, and item prices are higher than they were before. In a nutshell, not as cool as it used to be. More corporate, the entrepreneurial phase is long gone. My deal went smoothly, I already got paid through PayPal, and a digital camera got shipped. Only I could not slide my credit card in and out of the shipping Post Office’s machine in a smooth movement and almost gave up and assumed that I would have to go somewhere else. Luckily, the Postal employee explained to me how to use it, and after several tense moments, everything completed satisfactorily. Till next eBay deal!

Now switching to a different subject. How do you decide if you should make your own web site or if you pay somebody experienced to handle it for you? I am in a situation like that right now. Certainly I can handle simpler designs on my own, but more advanced and better-looking websites require a bit more experience than I got. There is no need to learn everything on your own since this approach takes time and only delays the time when you will be able to see your website up and running. But if a simpler is good enough, then it may also be quite acceptable, and no doubt cheaper. Did not decide yet which way to go.

In my last blog, I used Google Docs for the very first time. Actually to display certain types of data, Google Docs could be fine. The good feature is that it is updated every 5 minutes, so it could be used to capture near real time data. I have to think about that. Some Google API’s will no doubt be needed. There are many new possibilities because of that.

I looked around the web for information about ads in blogs. The most honest bloggers will tell you that you need to have traffic to your site of over a million visitors before anything can be made to work. Below that threshold, essentially nothing is going to happen. This advice appears to make lots of sense. Before you have a pretty good traffic, do not bother with any ads. It is unlikely that the ads alone would attract new people to your site. Basically I got some time before a full-blown ad campaign starts on this blog! Lucky you.

I try to stay, on this blog, away from politics. Not that I have nothing to say or know nothing about it. Quite opposite! But it would be better to have that vast subject omitted here. You may have heard that at work you never discuss politics and religion. I think it works better for people who just do that, from my own experience. Since blogs can be read by anybody, also your employer, it is better here as well to omit those subjects. It is amazing, however, that in the country with so many freedoms, you are better of if you just keep quiet! Enough on that subject, already said too much.

Now watching JillBolteTaylor_2008_480.mp4, who is showing a real human brain. Will not spoil any more. Very interesting, you should watch too, recommended on Twitter by BrookeAlley.

eBay™ is a trademark of eBay, Inc. Google™ is a trademark of Google, Inc.

MP3 music: http://002e972.netsolhost.com/ .