Information Processing

Just another WordPress.com weblog

Archive for October 2006

Bricks and broadband

with 2 comments

OK, I have to admit I’ve been suffering from gizmo envy for some time now. How is it that a connected guy like me has no mobile device with always-on internet and email capability? How is it that even stodgy UO administrators sport fancy BlackBerry’s while a wannabe hipster tech entrepreneur has no way of checking his email at SFO without paying T Mobile for wifi access?

Well, the situation is now remedied with Sprint’s EV-DO data plan. For only $15 a month I get all I can eat broadband (up to 1 mbps or so) through my new gizmo, the admittedly brick-like PPC 6700 smartphone.

So far I’m pretty happy with the phone, despite the large form factor. It has a retractable qwerty keyboard (see link above) and is very functional — I can ssh into my server, run emacs and use gmail. I can even use Bluetooth to get my laptop online, using the phone as a modem. Urbanites in Asia probably find my giant phone very amusing, but, hey, I live in the semi-rural United States, with its patchy broadband and 3G coverage.

I admit, it does make for behavioral problems when you can check your email at all times. I’d hate to know how many times a day I do it.

Advertisements

Written by infoproc

October 31, 2006 at 3:34 am

Posted in Uncategorized

It’s crazy: there’s no close second or third

leave a comment »

Michael Steinhardt, one of the most successful hedge fund managers ever, is from the old school. In this WSJ interview, he has a few things to say about how things are today.

Mr. Steinhardt founded Steinhardt Fine Berkowitz in 1967 when he was 26 years old. In the next three decades his fund, later renamed Steinhardt Partners, boasted average annual returns of nearly 25%…

Now, hedge funds that make [4%] over T-bill rates are doing great. It’s crazy. That’s why the field of money management is today the most highly compensated field in the world times three. There’s no close second. There’s no close third. And I think the expectations inherent in that sort of compensation are absurdly unrealistic.

…I do think there are a lot of inexperienced mangers running hedge funds today. There are a lot of people who do not have a history of superior performance over a long period. While certainly a long period of successful performance is no guarantee for the future, it gives a reasonable amount of comfort. But the fact that you’ve got a lot of young people running hedge funds whom I wouldn’t be comfortable with, that makes one a little bit wary.

Compare to Charlie Munger, another billionaire and Warren Buffet’s longtime partner:

I regard the amount of brainpower going into money management as a national scandal.

We have armies of people with advanced degrees in physics and math in various hedge funds and private-equity funds trying to outsmart the market. A lot of you older people in the room can remember when none of these people existed.

and Carl Fox (Martin Sheen, playing Charlie Sheen’s father in Oliver Stone’s Wall Street):

Carl Fox: Stop going for the easy buck and start producing something with your life. Create, instead of living off the buying and selling of others.

Written by infoproc

October 27, 2006 at 11:44 pm

Posted in finance

It’s crazy: there’s no close second or third

with 3 comments

Michael Steinhardt, one of the most successful hedge fund managers ever, is from the old school. In this WSJ interview, he has a few things to say about how things are today.

Mr. Steinhardt founded Steinhardt Fine Berkowitz in 1967 when he was 26 years old. In the next three decades his fund, later renamed Steinhardt Partners, boasted average annual returns of nearly 25%…

Now, hedge funds that make [4%] over T-bill rates are doing great. It’s crazy. That’s why the field of money management is today the most highly compensated field in the world times three. There’s no close second. There’s no close third. And I think the expectations inherent in that sort of compensation are absurdly unrealistic.

…I do think there are a lot of inexperienced mangers running hedge funds today. There are a lot of people who do not have a history of superior performance over a long period. While certainly a long period of successful performance is no guarantee for the future, it gives a reasonable amount of comfort. But the fact that you’ve got a lot of young people running hedge funds whom I wouldn’t be comfortable with, that makes one a little bit wary.

Compare to Charlie Munger, another billionaire and Warren Buffet’s longtime partner:

I regard the amount of brainpower going into money management as a national scandal.

We have armies of people with advanced degrees in physics and math in various hedge funds and private-equity funds trying to outsmart the market. A lot of you older people in the room can remember when none of these people existed.

and Carl Fox (Martin Sheen, playing Charlie Sheen’s father in Oliver Stone’s Wall Street):

Carl Fox: Stop going for the easy buck and start producing something with your life. Create, instead of living off the buying and selling of others.

Written by infoproc

October 27, 2006 at 11:44 pm

Posted in finance

It’s crazy: there’s no close second or third

leave a comment »

Michael Steinhardt, one of the most successful hedge fund managers ever, is from the old school. In this WSJ interview, he has a few things to say about how things are today.

Mr. Steinhardt founded Steinhardt Fine Berkowitz in 1967 when he was 26 years old. In the next three decades his fund, later renamed Steinhardt Partners, boasted average annual returns of nearly 25%…

Now, hedge funds that make [4%] over T-bill rates are doing great. It’s crazy. That’s why the field of money management is today the most highly compensated field in the world times three. There’s no close second. There’s no close third. And I think the expectations inherent in that sort of compensation are absurdly unrealistic.

…I do think there are a lot of inexperienced mangers running hedge funds today. There are a lot of people who do not have a history of superior performance over a long period. While certainly a long period of successful performance is no guarantee for the future, it gives a reasonable amount of comfort. But the fact that you’ve got a lot of young people running hedge funds whom I wouldn’t be comfortable with, that makes one a little bit wary.

Compare to Charlie Munger, another billionaire and Warren Buffet’s longtime partner:

I regard the amount of brainpower going into money management as a national scandal.

We have armies of people with advanced degrees in physics and math in various hedge funds and private-equity funds trying to outsmart the market. A lot of you older people in the room can remember when none of these people existed.

and Carl Fox (Martin Sheen, playing Charlie Sheen’s father in Oliver Stone’s Wall Street):

Carl Fox: Stop going for the easy buck and start producing something with your life. Create, instead of living off the buying and selling of others.

Written by infoproc

October 27, 2006 at 11:44 pm

Posted in finance

Does string theory predict an open universe?

with 5 comments

New paper! See here for related discussion.

The first two pragraphs:

If, as suggested by recent results [1], string theory exhibits a landscape of over 10^500 distinct, metastable vacua, its status as a conventional scientific theory is in jeopardy. Scientific theories must make predictions which are falsifiable by experiment. Such a large diversity of vacua means that essentially any low-energy physics might be realizable from string theory. Even ultra high-energy physics experiments may not yield additional information, since scattering at trans-Planckian energies leads to black holes [2] of ever increasing size, whose subsequent behavior (evaporation) is controlled by the low-energy physics of the ambient vacuum state. If recent results are any guide, string theory will be extremely difficult to falsify.

It is therefore important to carefully consider any robust implications of the string landscape. One of these, recently elaborated in [3], is the testable prediction that our universe must be open, with negative curvature. A recent analysis combining WMAP and Sloan Digital Sky Survey data gives Omega =1.003 +- 0.010 [4], but improved future observations could yield a statistically significant central value larger than unity, implying positive curvature. Would this rule out string theory?

hep-th/0610231
Authors: R. Buniy, S. Hsu, A. Zee

It has been claimed that the string landscape predicts an open universe, with negative curvature. The prediction is a consequence of a large number of metastable string vacua, and the properties of the Coleman–De Luccia instanton which describes vacuum tunneling. We examine the robustness of this claim, which is of particular importance since it seems to be string theory’s sole claim to falsifiability. We find that, due to subleading tunneling processes, the prediction is sensitive to unknown properties of the landscape. Under plausible assumptions, universes like ours are as likely to be closed as open.

Written by infoproc

October 24, 2006 at 1:03 am

Posted in physics

Proximity, ecosystems and Silicon Valley

with one comment

If you’re a young tech entrepreneur, move to Silicon Valley. The Times article I’ve excerpted from below is not exaggerating in any way. You not only have better access to venture capital in the valley, you have access to a whole ecosystem of other startups, entrepreneurs, technologists, attorneys experienced in startup issues, and big tech companies that are your potential acquirers. Note that both Google and YouTube are Sequoia companies. The article is also correct in pointing out that, beyond proximity and the ecosystem, the entire attitude toward risk is different in the valley. There’s a startup culture. People have seen startups succeed, have seen their friends get rich, and expect to be able to do it themselves. That positive attitude can make all the difference. If, instead, you’re cranking away in Minneapolis or Pittsburgh or even Boston or LA, dreaming of a sweet exit, it’s just that much harder to believe that it’s actually going to happen.

Lucky for me Eugene is only an hour flight from the bay area. But even that hour (and having to book a flight in advance) sometimes makes scheduling meetings a nightmare compared to driving from our Oakland offices down to Palo Alto.

FIBER networks cross the world. Data bits move at light speed. The globe has been flattened, and national boundaries obliterated. Yet in Silicon Valley, the one place that is responsible more than any other for creating the network technology that supposedly renders geography irrelevant, physical distance is very much on the minds of the investors who provide venture capital.

Meet the “20-minute rule” that guides fateful decisions in Silicon Valley. Craig Johnson, managing director of Concept2Company Ventures, a venture capital firm in Palo Alto, Calif., who has 30 years of experience in early-stage financings, said he knew many venture capitalists who adhered to this doctrine: if a start-up company seeking venture capital is not within a 20-minute drive of the venture firm’s offices, it will not be funded.

Mr. Johnson explained that close proximity permits the investor to provide in-person guidance; initially, that may entail many meetings each week before investor and entrepreneur come to know each other well enough to rely mostly on the phone for updates. Those initial interactions are fateful. “Starting a company is like launching a rocket,” Mr. Johnson said. “If you’re a tenth of a degree off at launch, you may be 1,000 miles off downrange.”

Capital and attention are lavished on entrepreneurs in the Valley as in no other place. Ten years ago, when Dow Jones VentureOne began a quarterly survey of where venture investments landed, one-third of all deals in the country went to the San Francisco Bay Area. Since then, the same share of deals has gone to the same place, almost without variation. Most recently, in the first six months of this year, Silicon Valley still pulled in 32 percent; the region with the second-largest total, New England, was far behind, at 10 percent.

…It’s convenient for venture capitalists to have entrepreneurs close by, but the reverse is true, too, said Allen Morgan, a managing director of the Mayfield Fund, which manages $2.3 billion in venture capital and is also on Sand Hill Road. Mr. Morgan made the case by pointing out that a prospective entrepreneur would, on average, need to have three to eight meetings with a venture fund before he or she was successful, but would have to go through a similar process with 5 to 10 firms before finding the one that approved the funding request.

Even if the process goes smoothly and requires only 15 meetings — the fewest possible, given the lowest range of possibilities — and even if most of those meetings are set up in advance, the time consumed in getting to Sand Hill Road, even using local highways, can be significant. The problem is that much worse when, as often happens, a meeting is called with just an hour or two of notice. “If you live in Santa Clara, it’s doable,” Mr. Morgan said. “If you live in Dubuque, it’s not.”

Entrepreneurs who live in Silicon Valley also find the technical talent they need faster than they can in any other place; they pay more for that talent, but speed is the sine qua non for success. Seth J. Sternberg, the chief executive of Meebo, an instant-messaging company in Palo Alto that is backed by Sequoia, described Silicon Valley with the fervent appreciation of a recent transplant from New York, where he had suffered three separate bad experiences with start-ups, none of which had attracted venture funding.

The ecosystem in Silicon Valley, Mr. Sternberg said, includes “incredible techies, who live here because this is the epicenter, where they can find the most interesting projects to work on.” The ecosystem also includes real estate agents, accountants, head hunters and lawyers who understand an entrepreneur’s situation — that is, emptied bank accounts and maxed-out credit cards.

“In New York, it would be extremely difficult to find a law firm willing to defer the first $20,000 of your legal fees,” Mr. Sternberg said. “Here, we got that. It’s a pretty standard thing in Silicon Valley.”

…Predictions of the Valley’s demise have become a perennial, said Mr. Morgan, the Mayfield venture capitalist. “Every five years, Time or Newsweek runs a story: ‘Silicon Valley is Dead,’ ” he said. “But Silicon Valley is bigger and more vibrant and better at creating companies than it has ever been.”

Silicon Valley is not “bigger” in a literal sense. In fact, it remains geographically contained by the Santa Cruz Mountains on one side and San Francisco Bay on the other. The physical features of the place help explain the Valley’s vitality.

MR. JOHNSON, the venture capitalist in Palo Alto, noted that the greater Los Angeles area also has a pool of talented engineers (working at aerospace companies like Lockheed, Northrop and Hughes) and great universities (notably Caltech and U.C.L.A.) and plenty of money to invest. “But in Los Angeles,” he said, “people are scattered across a wide area; everything is more spread out.”

It’s harder for entrepreneurs to meet with one another and with investors, he added. And that means connections take longer, deals move slowly, fewer companies are formed. “Like a gas, entrepreneurship is hotter when compressed.” he said.

Written by infoproc

October 22, 2006 at 5:21 am

Posted in globalization, startups

Income inequality by education

with 3 comments

Here it is, broken down by level of education. Note that even the PhD income increase from 2000-2005 is only slightly positive in real terms. Also, it significantly lags the increase for professionals. See here for previous posts on income inequality.

WSJ: The wage gap between those with business, law, medical or other postgraduate degrees has widened a lot more than the gap between college and high-school graduates. Even excluding capital gains, tax-return data crunched by Emmanuel Saez of the University of California at Berkeley show that the top 1% in the U.S. got 16% of all income in 2004, compared with 9% in 1984.

Before nitpicking emails arrive: No single set of numbers gives a complete picture. The data in this chart cover only cash wages — not health benefits or pensions. If they were included, most of those inflation-adjusted minuses would turn to pluses. But inequality wouldn’t disappear. The best-paid 20% of workers on private payrolls are three times as likely to have health insurance as those in the bottom 20%, and this tally doesn’t count stock options and the like — and you know who gets the bulk of those.

The question isn’t whether the gap between winners and losers in the labor market is widening; it’s why. And it’s no longer as simple as saying: The more education one gets, the more one earns. Something more complicated is driving up pay at the top.

Explanations come in three strains, all of which have some merit. One, it’s more socially acceptable than it was a generation ago for the top-tier chief executive, hedge-fund manager or baseball players to make an enormous amount of money. Two, the world has changed in ways that make the No. 1 or No. 2 — whether a trial lawyer or a rock star — much more valuable than No. 19 and 20. As technology has helped create superstars, the gap between Oprah’s paycheck and those of local talk-show hosts is larger than ever.

And, three, there’s the influence on supply and demand of globalization and technology. At the high end, sharply rising wages suggest demand for the most-educated workers is growing faster than the supply. “The very top is doing very well,” says Harvard University labor economist Lawrence Katz. “It’s changes in demand, combined with the fact that it’s very hard to replicate a lot of that talent… and we haven’t expanded the ranks of those professions as fast as we could.”

At the bottom, where the supply is influenced by the ranks of unskilled immigrants and laid-off workers falling out of the middle class, demand for hotel workers, nursing aides, security guards and the like may be helping to prop up wages even though the minimum wage hasn’t kept up with inflation.

It is in the middle — where many four-year college graduates work — that imports, overseas outsourcing and technology seems to be reducing U.S. employer demand most significantly, and thus restraining wages.

That is the kind of shift in the tectonic plates of the economy that produces political earthquakes.

Written by infoproc

October 19, 2006 at 4:59 pm

Posted in Uncategorized