You get what you pay for

Joy and I have talked a lot about how we decide what thing to buy when there is a choice. For instance, we bought mountain bikes before we were married and talked over all of the various options and choices. I think our philosophy is that you get what you pay for. We paid quite a bit more than the minimum for our bikes because we wanted bikes that would last a long time and have minimal problems. Joy hasn't used her bike much, but I've used mine to ride to work and so on. I'm very glad we paid extra to save a few pounds and get better components. I've had very few problems.

Now Lance Armstrong uses a bike (or rather several bikes) that is far more expensive with a carbon composite frame and the best components. Cost is really not a consideration for him, since the Tour de France is on the line and every ounce counts. But it would be ridiculous for me to buy his bike, since I'm mostly happy with something far less expensive.

I try to minimize the product of price and problems. For instance, I bought a cheap pair of binoculars at WalMart that got misaligned almost immediately. So I replaced them with Canon's 8 x 10 WP binoculars that are more expensive, but are much more durable. A more expensive pair wouldn't have enough fewer problems to offset the higher price. In fact, it's possible if I'd bought image stabilizing binoculars I would have had more problems, not fewer.

There isn't a magic way to find the optimum price point, but there are some rules of thumb:

• Ask an expert for the one or two most important features and focus on those.
• Don't pay for features you don't understand or care about.
• Don't pay extra for a single, secondary feature.
• Lighter, smaller and simpler tend to be undervalued traits.
• When in doubt, go for the cheap models of a high-end brand.
• Sometimes the off-brand will make really good models that get overlooked (and undervalued).

Joshua's latest picture

Isn't he cute?
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Materialism

Materialists believe that only material things exist. Originally it seems that scientists proposed materialism as a sort of approximation. Since material things can normally be studied profitably without introducing non-material concepts, it turned out to be a very good approximation. For instance, Galileo was able to observe and study sunspots because he ignored the ancient assertion that heavenly bodies are perfect. In practice, material objects are measurable and non-material things are only accessible subjectively.

At some point, people wondered if there might not be anything except material objects. After all, the approximation was so good that many phenomena were yielding to scientific explanation. Perhaps, the reasoning goes, non-material things simply do not exist. Materialists often make exceptions for things like Justice (which is a goal or ideal and does not exist outside of the realm of thought), or scientific laws (which are observable, though not necessarily binding). But they don't allow for a spiritual world or anything more than a Deist god.

Arguments from popularity normally exhibit the bandwagon fallacy, but it is telling that most people have believed in some form of dualism. It's difficult to understand why dualism should be so deeply ingrained in our intellectual history unless people have some reason to believe it is true. The materialist explanation seems to be that people have a need to understand the world around them and when they don't understand something (for instance, why the sun rises every morning) they would rather invent an explanation (a sun god) rather than admit they do not understand. Now that we know how the sun (or rather the earth) moves, we no longer need a sun god.

I'm not really a philosopher, so I won't pretend to be able to refute materialism. But I do think I can show why we should be skeptical about accepting it at face value. Materialist reject non-material phenomena because they don't conform to the level of evidence that is needed for material phenomena. Souls don't exist, since they can't be measured, even indirectly. Material phenomena that can't be explained by a materialist are meerly considered challenges to be solved by newer theories, better evidence and more study. In this way, materialism can resist apperant contradictions.

But why should we think it true? I can construct a simular philosophy of spiritualism in which the material world does not exist. All experiences, no matter how vivid, are meerly the result of realistic dreams. Through meditation, it will be possible to transend the illusion of the material world and assume the true, spiritual form. Naturally, a materialist would object that this is counter-intuitive or is unfalsifiable. But the same arguments may be used against materialism.

Further, the materialist explination for why dualism entered human belief systems seems unconvincing. Why did Aristotle believe in the soul? What was he trying to explain?

Christianity of death

I ran across an interesting review of The Passion by a Jewish rabbi who finds fault with the movie's celebration of Christ's death. "The Christianity of life concentrates on what Jesus taught his disciples about to how to living virtuously, the Christianity of death distillates the Christian message into the single maxim that Jesus died for mankind’s sins." I haven't seen the movie, but my impression (and the reason I've avoided it so far) is that the suffering of Christ is portrayed without balancing it with His resurrection. If Jesus did not conquer death, He would have been a common criminal, not my King.

But I suppose I am an advocate of the "Christianity of death", because the Christian message really is that Jesus died for mankind's sins. Obviously Jesus had lots of things to teach us, and I wouldn't for a moment discourage anyone from learning them, but His work was not finished until He had given Himself over to death. A careful examination of what Jesus actually taught makes me wonder how anyone could expect to live up to His standards. Hope, for Christians, comes not from His life, but from His death.

I know why a modern Jewish rabbi would want to find common ground with Christianity, but the same differences that existed between Christians and Jews 2000 years ago are still separating us.

Fish

Among the things I thought about on my vacation (while driving through Nevada and such), is that fish are the only predators that I even occasionally eat. I had sort of assumed that the reason was because the meat of a carnivore tastes bad, but I think it might have more to do with the difficulty in sustaining large populations. Fish are an exception.

I had a pretty successful trip in terms of catching fish in large part due to having a high quality rod and reel. Joy gave them to me as a second anniversary present. (Thanks, dearest.) Longer casts and fewer tangles meant that my lure spent more time in the water attracting fish and less time in the air attracting dragonflys.

Gmane

I'm vaguely involved with a pretty cool project, Gmane. Actually Lars Magne Ingebrigtsen, who rewrote Gnus, did all of the work and deserves all of the credit.

One of my earliest experiences with the internet was when AOL added newsgroups and mailing lists to their content. At the time, I remember being confused because it seemed like two different things that served the same purpose. Both required you to "subscribe", both were for talking with lots of other people and both consisted of threaded messages. AOL also had message boards, which are spiritual ancestors to web boards.

And of course, they do serve the same purpose. But since each one works slightly differently, people develop preferences about which is better. For instance, web boards offer the discussion owner the most control over content and presentation and newsgroups the least. It's possible to line them up in a series of spectra:

Control:         web  mail news
Ease of setup:   web  mail news
Ease of use:     news mail web
Universality:    web  mail news
Commitment:      mail web  news
Spam prevalence: mail news web
Centrality:      web  news mail
Archive:         web  news mail

This isn't set in stone of course and there are some subjective elements to the lists, but you can see how people would have strong preferences for one or the other of these methods. I really like using newsgroups now that I have a good newsreader, which means that when I come across an interesting mailing list or web board, I have to decide if I want to endure the pain of reading discussions that way.

The cool thing about Gmane is that I don't have to decide. Or at least there's a chance that I can read a mailing list with my newsreader. And if I need or want to use a web browser or search archives or avoid spam, I've got that too.

Defensive Win Shares

Thinking about the impact of the Dodgers trading away Lo Duca, I noticed how much of his value is on defense, at least by the Win Shares method. As of Saturday, he had 3.4 fielding and 8.9 offensive Win Shares. I just don't think of him as being a brilliant catcher.

The Hardball Times has been updated since then but it looks like Lo Duca is especially strong on the defensive side. Montreal's Schneider is the only catcher in the National League who has contributed more on defense. In fact, the Win Shares system shows him to be the best defensive player with (or rather, formally with) the Dodgers. That's right, better than Beltre, Cora, Izturis or Bradley. Which doesn't seem right.

I don't really know the answer, but I wonder if this indicates that catchers get too much credit in the Win Shares system for team defense. Bill James created Win Shares in part to help evaluate the defensive contribution players make to their teams. He explains it all better than I can in sample pages from the book. Basically a teams wins are multiplied by 3 and divided between offense and defense based on the contribution of runs scored and runs allowed to the teams wins. Then defensive shares are divided between pitchers and position players, and finally between individual players.

I really like this top-down approach and I suspect that the system makes pretty good approximations. But it is hard to evaluate since there are so many little details. For instance, on a team with several ground-ball pitchers, you can expect more double plays. So the system discounts the value of double plays for shortstops and second basemen on those sorts of teams. It's logical and fair, but complicated. And all of that complication is hidden behind an innocent little number.

Evaluating a catcher's defensive contribution is especially complicated, since the common wisdom going back to the earliest days of baseball is that the catcher is the defensive leader of a team. As a consequence, catchers get more credit for team defense than other players. They even get some credit for team pitching, since they usually help the pitcher decide how to approach the batters they face.

Needless to say, the Dodgers have had exceptional defense over the last few seasons. So if catchers are given unfair credit for team defense, it wouldn't be surprising if Lo Duca is overrated defensively by the Win Shares method. On the other hand, if he's as good as the system suggests, we should see a dip in the Dodger's defense, Florida's defense improved and Lo Duca's August and September Fielding Win Shares approximate the first part of the season.

We'll see.

Cubicle Cooking

For the last half-year or so, I've been expanding my lunch horizons a bit. I'd like to think I've invented the art of cubicle cooking. (Don't bother doing a Google search. Somehow the one of the hits was a porn site and the another was about "cooking the books".) Since I'm making it up, I'm defining cubicle cooking as the art of preparing food in an office environment. At a minimum, you need a microwave and a source of water. Hot water and a refrigerator are helpful, but not needed.

I started cooking at work after Joy got me a Small Micro-Cooker so that I can heat up ramen noodles. She uses it to make macaroni and other types of pasta. The pour spouts and strainer lid are really handy, but just about any microwave-save container should work.

If you've got a box of macaroni and cheese, you can cook it in the microwave by following the directions. But it's a hassle to take butter to work. Instead, I substitute plain yogurt, which is easier to transport. (This idea originated with a friend who uses sour cream. Joy uses yogurt instead because it has a bit less fat.) I really like the sour taste, but I can understand if you don't.

This week I brought eggs to work. Obviously they improve ramen, but today I added an egg to my oatmeal. I'm pretty pleased with the result, except I should have used less oatmeal. Cook the oatmeal first with a bit extra water, add the egg, and poach the egg in the microwave.

The rest of the trade

The Dodgers completed their trades minutes before the trade deadline. The sent Tom Martin to Atlanta for minor-league pitcher Matt Merricks and Dave Roberts to Boston for a minor-league outfielder, Henri Stanley. The big trade was aquiring Steve Finley and Brent Mayne from Arizona for minor-league players Koyie Hill, Reggie Abercrombie, and Bill Murphy. Murphy of course just came over from Florida. Here are the Win Shares or the Major League players moved yesterday:

Rank  Player         Team   POS    Bat  Pitch Field  Total  ExpWS    WSP  WSAA
459   B Mayne        ARI    C      0.0    0.0   0.5      0      3   .089    -2
512   S Finley       ARI    OF     6.9    0.0   1.8      9     11   .396    -2

 90   D Roberts      LAD    OF     7.4    0.0   1.4      9      7   .621     2
434   T Martin       LAD    P      0.0    1.1   0.0      1      2   .348    -1

So the Doders gave up 10 and got 9 Win Shares, plus whatever effect the minor league players will have in the future. Mayne has been a backup catcher, so presumabely he'll earn more than 0 Win Shares through the rest of the year. It seems to me that these deals hinge on the long-term prospects of the minor league players gained and lost, but is likely to be evaluated on the Dodgers playoff results. I wonder if they should have stopped before getting Finley, who is nearing the end of his career.

Lo Duca trade

Yesterday, the Dodgers traded Paul Lo Duca, Guillermo Mota and Juan Encarnacion to Florida for Hee Seop Choi, Brad Penny and a minor-league pitcher, Bill Murphy. Using the Win Shares list from The Hardball Times for this season so far:

Rank  Player         Team   POS    Bat  Pitch Field  Total  ExpWS    WSP  WSAA
 37   G Mota         LAD    P     -0.5    8.5   0.0      8      4  1.082     4
108   P Lo Duca      LAD    C      8.9    0.0   3.4     12     10   .626     2
375   J Encarnacion  LAD    OF     6.3    0.0   1.4      8      9   .429    -1

 38   H Choi         FLO    1B    11.9    0.0   1.0     13      9   .751     4
 82   B Penny        FLO    P     -2.4   10.3   0.0      8      6   .694     2
  -   B Murphy       -      P       -      -     -       -      -   -        -

Obviously Murphy hasn't established any sort of value, but is worth more than nothing. So the Dodgers gave up 28 to get 21+ Win Shares. But look at the last column, Win Shares Above Average. I'm not convinced the statistic is accurate, but I think it tells the story of the trade. Encarnacion has hurt the Dodgers because he's been taking time away from the other outfielders:

 62   M Bradley      LAD    OF     9.0    0.0   2.8     12      9   .639     3
 90   D Roberts      LAD    OF     7.4    0.0   1.4      9      7   .621     2
 97   J Werth        LAD    OF     4.7    0.0   0.5      5      3   .937     2
263   J Grabowski    LAD    OF     3.4    0.0   0.3      4      3   .538     0
546   S Green        LAD    1B     6.4    0.0   1.2      8     11   .360    -3

Ok, maybe they should have found a way to trade Green as well.

Home improvement weekend

This weekend, Joy and I finally started painting our room. We'd bought the paint months ago, but the task of stripping away the pealing paint and prepping seemed pretty daunting. On Saturday, we finished stripping paint and applied one coat of primer. Our room smelled awful and since we had disassembled our Select Comfort bed, Joy and I slept on sleeping bags in the living room.

On Sunday we bought another can of primer and a new screen door. The old screen door had gotten warped and was falling off its hinges. For some reason, it had been installed in the molding, which is rotting away, rather than the door jam. We bought a vinyl door that matches the window frames our landlord had installed. Not only does it look good and require no maintenance, it was also easy to install. First you mount a bar with the hinges and then you mount the door to the bar. Easy.

Then Joy discovered why the previous door as attached to the molding. There isn't enough of a gap between the main door and the screen door for both to be closed at the same time -- the door knob is too long. There's no hurry to fix it, because I don't have a big enough drill bit to install the screen door's handle.

Tool of the week: paint roller with shield. (You'll have to roll down a bit if you follow the link.) I can't imagine painting a ceiling without it.

Late night reading

Joy fell asleep just now while I was reading Raising Cain. I just finished the chapter on fathers and sons and now I'm reading about mothers and sons. Joy fell asleep because she's been chasing down our very active one-year old.

She's done a great job dealing with Joshua. As the book points out, mothers and sons start out with the closest of relationships and that often doesn't ever change. What does change is the way boys and men learn to express their love for their mothers. Joshua isn't always eager to be held and often pulls away to explore the game cabinet or play with a toy. Joy has been on the lookout for ways she can help him play safely and strikes a good balance between hovering over him and ignoring him.

My own mom struck a similar balance. I remember how hard it was for her to help me fill out applications for the military academies and schools on the other side of the country when I was in high school. But she let me go and helped get Dave and Doug into the Air Force Academy. I know that every time I got on the plane headed for Los Angeles, she cried, but I never heard her complain.

Boys and men have to know that the women in their lives have confidence in our abilities. I've made enough mistakes in life to know that I need people to help me clean things up. Freedom to risk failure is a wonderful gift because it communicates trust.

Getting things out

Looking back at the things I've written here, I'm stuck by how haphazard they are. I've gone back to correct wording here and there, but for the most part I've tried to write things quickly without worrying too much about how they come out. Partially I've done this because "The best is the enemy of the good."

Perhaps more to the point, ideas that never leave home don't earn their pay.

Why I buy the S&P 500

When it comes to finances, it is always good to have a benchmark. For instance, for emergency savings, there is no reason to settle for less than the interest rate on short-term Treasury bills unless you need the convenience of a checking account. The benchmark for longer-term investing is the S&P 500 index.

When I first looked at the mutual funds availible to me in my 401(k), only one fund seemed like it might surpass the S&P 500 benchmark -- Fidelity Magellan. But Peter Lynch was no longer its manager. With huge amounts of money invested, it began to resemble the S&P 500, but with more expenses. I decided to watch Magellan's progress and invest in the index fund. As it turns out, Magellan has "returned" -3.17% annually to the index's -2.04% over the last five years.

There are three elements in the success and failure of mutual funds to beat their benchmark: 1) investment skill, 2) expenses, and 3) investment domain. The first and second points are obvious and, in theory, counter-balance. An index fund requires little to no skill, but minimum expenses. A managed fund has more expenses, but rewards investors with more gains from investment skill. In practice, many managed funds fail to beat their benchmark even without accounting for expenses.

The third point, investment domain, is a description of what sort of securities a fund is allowed to invest in. Over a long period of time, stocks of small U.S. companies have returned more than government bonds, for instance. So all other factors being equal, a small cap fund will do better over many years than a government bond fund.

An S&P 500 index fund has low expenses, will match its benchmark and invests in the 500 largest public companies in the United States. It may not be exciting, but it has been the bulk of my retirement savings for the last five years.

A parable

There once was a town with one well and everyone was sick all the time. Each citizen of this town survived only because there was an abundance of barely edible roots in the area. No one enjoyed more than a few moments in the day and none slept much at night.

One day, a certain man from that town discovered a spring far from the town's only well. He drank from the spring and the next day he felt a little less sick. So he went to the spring again and felt better still. Soon he was healthy and going to spring every day.

This man began to search farther away for food, and he discovered various fruits and grains that tasted better and were more nutritious than the roots near the town. So he became stronger and more energetic.

In the meantime, the people of the town noticed the change in this one man and they began to say to themselves, "Who does he think he is drinking different water and eating different food? He even is acting differently from us."

When the man heard what his neighbors said about him, he became ashamed. "Come," he said, "let me show you the spring with healthy water and the fruit and grains that make me strong." And some of the people came and saw. But others scoffed, "This man is trying to kill us! We have plenty of food and water right here."

And the town was divided between those who drank from the spring and those who drank from the well, those who ate roots and those who ate fruits and grains, and those who were sick and those who were healthy and strong.

First TES data!

When I got in this morning, I learned we have data from the TES instrument. As I mentioned to Joy, I feel great satisfaction getting this stream of ones and zeros from space.

Andy had set up a mail filter to send a text message to his phone every time we get data. It started going off at 4 in the morning as the guys on the East Coast started catching up on some non-instrument data. We didn't know exactly when the commands would be loaded on the instrument, so he had to keep checking.

The actual TES data came through about the same time as the morning Ground System conference call. He had the pleasure of being able to announce that the data was processed moments after someone predicted it would take 3 hours for the data to arrive. Total turnaround time from command execution to fully processed was less than 45 minutes.

Why I buy Raytheon stock

I thought it would be a good exercise to go over why I have certain securities in my portfolio. Peter Lynch says that if you can't tell a stock's story in a minute then you shouldn't own the stock.

I've been buying Raytheon stock every other week for the last five years, which means I've seen prices from about $75 to about $18. Thankfully I've bought shares mostly at the lower end. Also, I've been dollar-cost averaging into my Raytheon position, so I've bought more shares when the price was low.

Virtually the only reason I own the stock is because I work for Raytheon which matches my 401(k) contribution with company stock. I've sold shares as often as I am able, so this investment represents an opinion in the quality of the company's work environment more than in it's ability to make money for it's owners.

I worked as an intern for Raytheon for four summers and when I got out of UCLA, Raytheon Pasadena offered me a job working with JPL. I also was offered a job at the same starting salary with a dotcom startup in Santa Monica called US Interactive. Despite the possibility of a large IPO, I chose Raytheon. After an IPO at about $10 on August 9, 1999, USITQ reached a high of $92 on January 3, 2000. Fortunately I didn't even lookup the ticker at the time. Over the same time, Raytheon dropped from about $68 to about $25 on news of large "one-time charges" on earnings.

Raytheon had bought a number of divisions in the 1990s, including the part I work for which was originally a small "Beltway bandit" based in Maryland. First it was bought by Hughes, which was bought by GM, which sold bits to Raytheon. Both cars I've owned have been thanks to a GM employees discount I enjoy as a result of this convoluted acquisition path.

Raytheon also bought parts of Texas Instruments and an engineering operation, and sold off its Amana appliances division. Not surprisingly, the company had problems integrating all of these businesses. Only within the last year or so has Raytheon shed most of the baggage of acquisition and focused on its core business.

I haven't spent much time analyzing the numbers, but I don't think Raytheon is a good value at current prices. The company has consistently paid out a 20 cent quarterly dividend, which works out to 2.5% yield, but I don't see how earnings can grow. We might be in a long defense boom cycle because of September 11, but the market has already taken that into account.

Meanwhile, shares of US Interactive are not even worth the paper they are printed on, and the Santa Monica office has been closed down. Raytheon hasn't been a great stock, but it's my best investment so far.

Little things

I love being a father! Since Joy came home from The Pampered Chef National Conference in Chicago, I've been feeding Joshua applesauce in the morning instead of Joy breast-feeding him. He can hardly keep himself from leaping out of his seat while I mix in his vitamins and when I start feeding him, he opens his mouth like a baby bird. Once he's calmed down a bit (either because he isn't so hungry anymore or he knows I'll continue feeding him), he hums to himself or babbles, "Ma ma ma!" He likes to lean way over so that there is a shorter distance from the cup to his mouth, and he gently places a hand on my knee.

I'm pretty certain that for Joshua, "Ma" means "food" and "Da" means "play". I suppose there isn't all that much else important for him right now.

He was so worn out from the heat when I got home last night, but he hadn't slept much. I pulled out his helmet so we could take a ride which seemed really exciting to him. He enjoys himself on our bike rides, but on the way home he got fussy. I think he fell asleep for a moment and woke up confused. Fortunately he calmed down when I got home and we snuggled on the hammock for a while.

Last night, he woke up a couple of times before Joy and I went to bed. He practically threw himself on the changing table and back in bed the first time. The second time I thought he desperately wanted to be held, but he just wanted the sippy cup I was holding for him. He broke down when I pulled it out of his hands to refill it after he'd sucked it dry. When he finished drinking, he raced all over our bed trying to stay awake. He was so entertaining that Joy and I were pretty reluctant to send him to his room.

Official Aura launch photo

Here's the official launch photo of Aura. TES came on yesterday and we should get the first bit of data tonight. 

New outlets

I spent part of the weekend installing outlet around the house, including one GFCI in the kitchen. Originally there was only an ordinary outlet in the kitchen, so the hole in the tile was too small for the bulky new receptacle. So I had to file away some of the tile and some of the plastic bits on the outlet with my Leatherman. Finally I used a one-by-four and a hammer to force it in place. I pity the person who has to replace it -- hopefully they'll tear down the house first.

The other outlet in the kitchen was at least has hard. There really ought to be a law against painting screws and the penalty should be harsh. When the screw head got completely mangled, I unscrewed it using the Leatherman's needle-nose pliers. Fun.

I really like screws that have Phillips and flat heads. If I were dictator of the world, I'd require them everywhere.