A completely creeptastic article from the NY Times on how Target can figure out that your 16 year old daughter is pregnant before she’s willing to talk to you about it, based on what she’s buying and when. Big Brother isn’t a mustachioed Stalinist, he’s a mild-mannered statistician attending corporate board meetings and sending out personalized coupon books that purposefully camouflage just how much his computers know about you and your so-called “private life”.
Tag: statistics
Links for the week of November 19th, 2010
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An Introduction to Retirement Investing for Scientists
After spending a number of afternoons and evenings with friends and family over the last few months reviewing their retirement planning and investments, I’ve gone and done something a little bit crazy: I suggested to the GSC at Caltech that maybe I could give a talk on retirement investing to the grad student/postdoc population. Incredibly, they thought this sounded like a good idea, and so now I’m scheduled to give a talk in a couple of weeks. I’m going to try and write it up here in prose form first, to get it organized. It’s gotten to be a bit long… so I’m going to break it up.
Main Points:
- Taking responsibility for funding your own retirement is arguably more important now than it has been for a couple of generations. 100 years ago we had much more in the way of traditional (family, community) support in old age, and the systems that we put in place after the Depression (corporate pensions demanded by organized labor, social security) show few signs of being fixed any time soon. Generally today you do not even have the option of signing up for a “defined benefit” plan. It’s a 401(k) or the highway.
- Investment returns are for all practical purposes random, unpredictable events, and because of this there’s really no such thing as an “expert investor” in the sense that most people selling their investment management services try and imply. Nobody can reliably beat the broad markets, but you can do a perfectly good job of managing your own retirement funds if you’re willing to spend about 4 hours per year on it, say the other half of the day you spend doing your taxes.
- To maximize your chances of success, you must habituate yourself to spending less than you earn, making investing as automatic as possible, starting early and aggressively, and continuing throughout your entire career, regardless of what life and the markets throw at you. Because returns are exponential and not linear, the difference between starting to save at age 23 and age 32, assuming roughly an 8% rate of return, can be on the order of a factor of two in the final value of your retirement funds. Being comfortable living well below your apparent means makes it possible not only to save money now, but also reduces the amount of money you need in order to have “enough” in retirement, where “enough” means about 25 times your expected annual withdrawals, as you can take about 4% of your money out each year indefinitely.
- Maximizing the returns on your investments largely comes down to managing investment costs: how much you pay the people doing the actual investing (i.e. the mutual fund companies), and how much you pay in taxes. The difference between paying 0.2% and 2% in fees and taxes each year might not seem huge, but over the course of 35 years of investing, it makes roughly a factor of two difference in the amount of money you end up with.
- The two most important tools you have in managing investment risk are diversification and asset allocation. Diversification reduces the overall impact of many kinds of unpredictable events (high oil prices, the demise of the newspaper industry, war between India and Pakistan, collapse of the Icelandic currency… etc.) reducing the overall volatility of your portfolio. Asset allocation (mainly the split between stocks and bonds) allows you to choose what kind of financial risk you are exposed to, and to shift it over time as you get closer to actually needing to live off your investments. With stocks, you get the potential for future growth, at the expense of having to put up with wild fluctuations in their value. With bonds, you get less price fluctuation and less potential for growth, but the ability to draw a reliable income stream. With cash you get little to no price fluctuation, but essentially zero potential for real (inflation adjusted) growth.
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Links for the week of December 4th, 2009
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Shared Links for Jun 26th – Jul 7th
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- Christian high school discussion of climate change – Kurt Klein's AP Environmental Science class is reading Richard B. Alley's Two Mile Time Machine, about paleoclimate, ice cores, and abrupt climate change events. (tagged: climate ice science greenland education religion )
- Prefabricated Passive Houses in the USA – Bau Technologies is attempting to bring pre-fabricated (or rather off-site constructed) passive houses to the US. Looks awesome. (tagged: architecture sustainability energy efficiency passivhaus design )
- Yogurt making tips – Detailed instructions on how to make yogurt, and also a source for equipment and cultures. (tagged: food yogurt homemade cooking recipe )
- Climate Wars – A Canadian radio show exploring some of the climate change scenarios which have been studied by the US Dept. of Defense in a personal, "War of the Worlds" kind of way. Be forewarned, this is apocalypse porn, and probably not productive unless you need to get yourself riled up. (tagged: politics climate sustainability future war )
- Our Passive House — the first passive house in Utah. – A Utah couple chronicles the design and construction of their passive house, with blog posts and photos. Great to see these things going up on this side of the Atlantic finally! (tagged: passivhaus sustainability design architecture buildings )
- Will Allen: Street Farmer – A long profile of Will Allen and his intensive urban farming project in Milwaukee: "Growing Power". Aquaponics and vermicomposting of donated food wastes. This is realistic urban farming at a moderate scale. (tagged: sustainability urban food agriculture compost )
- Gini coefficient | Wikipedia – A wonderfully simple and general mathematical measure of the non-uniformity of a distribution, mostly used in economics, but applicable elsewhere just as well. (tagged: economics math wikipedia research science finance )
- Here comes the data: OECD Factbook eXplorer – There are terabytes of interesting data out there that nobody can actually understand, because we don't have good interfaces for playing with it, and poking around. This is the OECD's attempt to offer a window into its own demographic treasure trove. Obviously inspired by the gapminder, from Google and Hans Rosling. (tagged: data maps statistics visualization demographics oecd economics )
- The Choice of Cities – I'm not convinced we really know why the humans are coming to the cities. Whether it's a pull, or a push. How the migrants feel about their lot. Is it, globally, the same as the push we had in this country a hundred years ago? Or was it a pull? What happened when the frontier closed, when all the land was spoken for, and the factories and mines and mills were opened for business.
And what will cities look like once everyone has arrived? If we actually reach that day, when the countryside is emptied, and the flow staunched, then how will cities develop going forward? What will their margins look like? Will the slums filled with newcomers vanish? What will they be replaced with? (tagged: technologie urban design economics history technology poverty )
- Bike Among the Ruins – Detroit is half abandoned. The houses are almost free. The streets are empty and the people are poor. It's also flat. Could a cyclone of bicycles wipe clean the slate, even within the sight of our beloved, bankrupted, and now employee owned husk of an industrial titan… GM? (tagged: bicycle transportation urban design economy )
- Behind the Veil by Eve Arnold – A series of photographs of women, from Afghanistan and the middle east from 1969. Very different from our "Summer of Love"… (tagged: photos islam afghanistan women )
- The Revolution Will Not Be Digitized – Iran is one of the first places we get to see old school blood in the streets mixed with the new age of instantaneous, ubiquitous communication. We've tended to focus on the positive aspects, while briefly forgetting the potential powers of an electronic police state, which is to some degree what Iran has built. No massive army of eavesdroppers and informants is needed in such a regime. A few deep packet inspection boxes from Siemens sitting on the fiber backbone, and a few on the microwave towers from Nokia. Technology is largely neutral. (tagged: technology politics internet privacy government twitter web2.0 iran )
- 55 km to Amsterdam – A day of inter-city transportation by bicycle in the Netherlands. Can it really be that idyllic? (tagged: bicycle transportation netherlands infrastructure )
- 1993 Y Hike Pictures – Wow, pictures of myself from 1993 on the Y Hike. I still remember just about everyone in that group. I look so… young! (tagged: caltech yhike backpacking wilderness sierras )
- Traitor Joe's | Greenpeace – Trader Joe's doesn't make any effort to source sustainably caught fish. Unfortunately, with 70-80% of global commercial fisheries in collapse, it's virtually impossible to sell (or buy) most tasty fish species ethically. (tagged: sustainability fish traderjoes ocean food )
- Organic Farms as Subdivision Amenities – Housing developments that incorporate small organic farms, CSAs even, instead of the usual golf-course crap. How would one adapt this for denser living I wonder? (tagged: design agriculture urban csa food architecture )
- Enphase Energy System Monitoring – Another real-time and historical solar power monitoring system. This one is installed on the roof of one of the Boulder Housing Coalition Co-ops in Boulder. Pretty awesome! Smart grid indeed. (tagged: solar energy technology transparency electricity )
- Caltech Building Dashboard – A near real time view of the power being generated by Caltech's 200 kW PV installation on the Holliston parking structure. Also shows historical data and weather information. Pretty cool. Would be great to just have the raw datastream available via an API too… and be able to see all the Caltech's per-building consumption too. (tagged: energy solar caltech pasadena technology transparency data internet )
- How To Destroy Half the Planet for the Low, Low Price of 5% of Global GDP – Never mind the possibility of unforseen climatic consequences. Even if the pessimistic IPCC scenarios are right, and even if they "only" reduce global GDP by 5% over the next 100 years, that purely economic metric is not sufficient, because it turns out you can wipe 2.5 billion people and their nations off the face of the Earth, mainly in the tropics, and only reduce global GDP by 5%. Cold comfort, that. (tagged: climate economics gdp )
- Walter Mebane's statistical analysis of Iran's election results – Walter Mebane at UW Madison has done several statistical analyses of the Iranian election results, and finds significant irregularities in the Ahmedinejad results. (tagged: election iran statistics democracy fraud system:filetype:pdf system:media:document )
- Carbon Cap and Trade Debate – Ralph Cavanagh (legislative council for NRDC) and Jim Lazar, an economist, debate the merits of Cap and Trade, for an hour and a half. Looks interesting, but don't have time to watch it at the moment (tagged: video towatch climate policy economics )
- Property Assessed Clean Energy Bonds – PACE bonds are a way of overcoming the capital intensivity of many energy efficiency retrofits which make sense in the mid to long-term, but not on the typical short term investors time horizon. They also allow homeowners who may move before their investment in efficiency has paid for itself to pass on the obligation to future owners, instead of losing the investment. They also shift the costs of doing energy efficiency from capital expenses to debt servicing, which is advantageous in many jurisdictions for tax purposes. Berkeley, CA and Boulder, CO pioneered them for municipalities, but they can also work in a commercial context. (tagged: energy efficiency sustainability finance green debt investing bonds )
- It’s Now Legal to Catch a Raindrop in Colorado – Colorado has taken its first tentative steps down the road to legalizing… rainwater harvesting. I hope they go all the way. I'd hate to have to end up breaking yet another immoral law. (tagged: environment colorado water law sustainability rain green architecture design )
- Welcome to Tällberg – A "conference" analogous to the WEF in Davos, but held in Sweden, in the woods, and with sustainability as the given goal, instead of economic growth. Would be an interesting stop on the Green Cities Bike Tour. (tagged: green economics technology politics policy design conference )
- Power Struggle – A commentary on Steven Chu's position that we need major basic scientific and technological breakthroughs to successfully tackle our energy problems in the context of global warming. The hope is that in the short term, the vast array of incremental changes we have available is enough to get us started, and that by mid-century, the major breakthroughs will have been forthcoming. Ah, non-linear dynamics. (tagged: technology science energy climate non-linear sustainability policy )
- The Great American Bubble Machine – An article from Rolling Stone, by Matt Taibbi, on the endless bubble building shenanigans that Goldman Sachs has engaged in over the years, and their supposed current machinations to engineer a bubble in the as-of-yet uncreated market for greenhouse gas emissions. Markets, I like. Markets run by some Great American Gangster Kingpin, not so much. Especially not this particular market. Remember: Nature doesn't do bailouts. (tagged: economics finance goldmansachs capitalism climate bailout )
- The Economics of Ideas – An article about Paul Romer by Kevin Kelly, musing on the problems and benefits of having an economy which is primarily driven by informational goods. (tagged: economics technology non-linear )
- Paul Romer: A Theory of History, with an Application – Paul Romer talks about two different kinds of informational goods: "technology" and "rules". The former being knowledge about how to re-arrange the material world to increase its value to humans, and the latter being constraints on the ways we interact with each other. His "new/endogenous growth" theory suggests that overwhelmingly, wealth creation throughout history has been due to these two kinds of goods, and that they are virtually infinite resources. What he does not explicitly admit in the talk though, is that much of our increased apparent wealth has come at the cost of virtual liquidation of material resources. Truly sustainable growth absolutely must close the materials loop somehow. Better sooner than later. The rest of his idea is wonderful: we need a system which enables rule set entrepreneurs, or we aren't going to get sufficient innovation in the field. He suggests myriad autonomous city states, and I agree emphatically. (tagged: economics urban society non-linear politics longnow )
- The Swimming Cities of Serenissima – Improvised and chaotic houseboats built from found bits, floating down the Mississippi (2006-2007), or the Hudson (2008), or sailing the Adriatic from Slovenia to Venice (2009). Like a tiny maritime Burning Man. Only a couple of boats today… What if it were an armada? (tagged: art boat performance sailing )