Sunday, September 21, 2014

Review: Locked In

Locked In is John Scalzi's latest novel. It's a quick fun read, and not very deep, but a good example of how a good science fiction writer can take a single topic, extrapolate it to the world around him, and then weave a decent story.

The story involves Hadens. Much like a movie, the world that Scalzi wants to move in is so complex that it has to have a prologue. Basically, a virus has left a large population of people locked into their bodies, so they can only interact with the world through remote-drones (called threeps), or an integrator, which is a human who's set up to receive remote control just like a threep would be. The intricacies around the plot revolve around what it's possible or not possible to do with an integrator, so Scalzi ensures that you get all that information up front. That's the science fiction part.

The main character, Chris Shane, is a Haden who's a rookie FBI agent. On his first day of work, he and his partner are assigned to a mysterious murder, and as they unravel the plot, we see that it's not just a simple murder, but also implicates that big changes are coming to the world that Scalzi has set his plot in.

The plot is by far the weakest part of the story. Not only is the villain's intentions rather far fetched and unbelievable, the means by which he aims to achieve his goals seem rather amateurish. Certainly, that a rookie agent seems to have had such an easy time unravel-ling the shenanigans makes everything seem very pat.

Nevertheless, it's a fun read and quite compelling. A worthy airplane novel. Mildly recommended.

Saturday, September 20, 2014

The Siren Song of Real Estate

I'm constantly astounded by how frequently people tout real estate as a great investment. Take a look at this example from Quora, for instance:
Buy a single-family, 3 bedroom rental for $180,000. Rent = $1,200/month. That's about 7% rate of return on your investment. Here's the good news: after depreciation, you net income is practically zero (on paper).
Where do I begin? First of all, don't forget maintenance, insurance, and taxes on the home!  If there's a HOA, add that monthly fee in there as well. On average maintenance costs about 1% a year, and property taxes eat another 1%. Add to that insurance, which is another 2.5%. Now that's $4,500 / year.

There's also costs of acquiring a renter, as well as the possibility of not being able to rent out a house for a while. (If your 3 bedroom house rents for $1200/month, it's not in a strong market like the Bay Area) John T Reed uses a 95% vacancy rate as standard, which means that you lose about 2 weeks of rental income a year due to moving people in and out.

So now your numbers look like this: $13,846 in revenue, $4500 in costs, which is $9346, or a 5% return, give or take a bit. But you also paid a real estate agent about $5400 to buy the home, and you'd have to pay the same to sell it, assuming no appreciation. (Typically real estate appreciates 0.4% a year after inflation, and if you're getting a house for $180,000, it's not in a high growth area like the San Francisco Area)

Note that the above numbers from Quora are doctor'd! In other words, good luck buying a house for $180,000 that can rent for $1,200/month, which would imply a price to rent ratio of 12.5. In most parts of the country, price to rent ratio is 15, which means that you'd have to pay $216,000 for that same house. Your property taxes, insurance, and maintenance costs go up proportionately, and you're down to less than 4% return, even assuming you didn't pay brokerage fees for buying the house.

What about depreciation? Well, if you depreciate the property, you have to back that out when you sell, so your capital gains would register that much higher.

(Just in case you were wondering, the price to rent ratio in the Bay Area is currently at least 20, probably approaching 25: it really isn't a good place to buy a property to rent)

Are there any mitigating factors? Yes. If you live in the house for 3 out of the past 5 years, capital gains are exempt from taxes. So if you moved every 4 years and bought a new house each time, and real estate kept going up, you could come out ahead with respect to housing versus saying, buying an indexed fund. But you hardly see any one except John T Reed telling you to do that. Most people, especially families, don't like moving that often.

If you can do exchanges, then trading up is essentially tax free, enabling you to defer paying taxes. That's also nice. But you'd be tying up your wealth in increasingly large amounts of real estate as you do so.

The big reason why most people think real estate makes a huge amount of money is because of personal experience. They put 20% down on a house, watch the house go up in value, and walk out with a ton of money due to the use of leverage. As folks found out when the housing bubble crashes, leverage hurts you a lot as well when the market goes down.

There's no free lunch in investing. Unfortunately, there are lots of people who like to tell you that there is, and they'll make money selling you books, seminars, and other content doing so. Real estate investing has just as many people like that as the financial services industry, so if something you hear (or read) sounds too good to be true, it probably is.

Friday, September 19, 2014

School vaccination rates

When I was touring pre-schools, I was concerned about the levels of immunization in California. Every time I asked a school principal about it, however, I got the brush-off. What I didn't know until Arturo pointed it out was that I didn't have to ask the school, I could get the data directly from the California government web-site.

The data is extremely comprehensive, covering every licensed child-care facility in California as well as public and private schools K-12. Note that while it doesn't tell you what percentage of parents opt out of immunizing their kids, it lists what percentage of parents submit PBEs (Personal Belief Exemptions) in lieu of immunization records, which you can use as a proxy for people who don't vaccinate.

You need a vaccination of 95% to achieve herd immunity, so PBE levels above 5% should be considered dangerous. You might think that only poor schools with uneducated parents would get to that level, but several expensive and exclusive private schools including Waldorf in Los Altos have very high PBEs. (Waldorf is at 44%!)

This lets you screen schools easily and quickly, and eliminate schools without even a visit.

(And yes, Bowen attends Villa Montessori in Cupertino, which has 0% PBEs)

Thursday, September 18, 2014

Exploitation

Google, Intel and Apple are appealing Lucy Koh's rejection of their settlement about the anti-poaching case. It's very hard to get sides that don't want to sue each other to sue each other, so my expectations are that the court of appeals will reject Koh's decision.

Many of my former colleagues have said something like "I wasn't really exploited. I'm going to donate my money from the settlement anyway, so it doesn't matter how much it is." This tears me up.  It tears me up especially since the kind of people who say that tend to be white, privileged, and have never really had to struggle to make a living.

When I was 20 and a struggling student (yes, I actually did receive Pell grants), I had to work 2 jobs simultaneously while carrying a full time load to avoid having to take out crushing amounts of student loans. I had a deep aversion to carrying debt at that time and I still do now. I worked for a tiny company in Berkeley called Geoworks over the summer full time as an intern. Geoworks was your prototypical technology startup, and had lots of cool projects, including the idea that you could work on whatever you want and no manager would stop you provided you got your main job time. Of course, that meant that many of us worked 80-100 hour weeks for fun. (Google called this 20% time, Geoworks called it "anarchy time") In fact, the predecessor for gtags was a tool I wrote during anarchy time for Geoworks to browse and navigate the multi-million lines of assembly that encompassed GEOS. For all that, I was getting paid a nominal $15 an hour, but working way more than the 40 hours a week. I think I might have clocked 80 hours a week normally.

At the end of the summer, I was due to go back to school. The management team at Geoworks took me aside and said, "You'll be working fewer hours, and so as a result, we're going to cut your hourly rate because you will not be as focused on your work as you were when you were full time." They proposed to cut my pay to $12 an hour, in addition to giving me only 20 hours a week. I was by no means someone they were trying to get rid of, since they would try to hire me again next year as a full time engineer after I graduated. I was hopping mad. I quit and worked as an undergraduate TA at school instead, reasoning that if I was going to be exploited (Berkeley only paid $10/hour), I'd rather be exploited by a non-profit and help my fellow students and avoid the walk to downtown Berkeley and stay on campus instead.

Years later, other former interns from Geoworks would thank me for my actions, because after seeing someone they thought was loyal walk out over that 20% hourly rate cut, management at Geoworks backed off on that policy.

What relevance does this have today? Back then, tech workers were plentiful and companies didn't need as many. There wasn't as much competition back then as there are now for workers. You'd think that, but you'd be wrong. Just a few years back, one of Google's early SREs left Google and joined Facebook, based on something very similar to my story above. After that event, Google gave everyone on his team a raise. Was that competition helping out? Or was it simply because Facebook refused to join the cartel that Google, Intel, Apple, Adobe, and several others put together? Regardless of how you feel about Facebook as an employer or product, engineers in the valley owe a huge favor to Facebook walking in and breaking the cartel and raising wages as a result.

Here's the thing: Google and Apple have engineers that are the strongest in the industry. You would think that it would be impossible to exploit such an incredibly valued bunch of folks, yet these large corporations got together and did it, and successfully got away with it, getting a slap-on-the-wrist settlement from the government. If these companies get away with murder when it comes to Google-class engineers, what do you think happens to the women and minority in the profession who aren't in the top tier? That marginal worker on average discovers that the low pay and long hours common in the profession does not pay enough to keep him or her working in software development. As a result, the average software career is much shorter than careers in other engineering professions, allowing the industry to claim a shortage.

I don't care if you personally don't need the money from the settlement (I don't, either). But when exploitation of workers happen, call it out. Don't sit back and behave like a spectator: let everyone knows how unfair it is, and how it shouldn't be allowed to happen. By doing so you're not just helping yourself, you're also helping engineers that aren't working at your tier. Otherwise, all the noise about trying to get more women and minorities into the profession is just noise; until you can get fairness in the workplace for the top tier workers, you don't have a prayer of making it attractive for the marginal tech worker or helping those who aren't in the 1%.

Wednesday, September 17, 2014

Review: Airscape Coffee container

I'm too lazy to grind coffee, so tend to buy Costco's Peet's pre-ground coffee at 36 ounces for $13. But I don't drink more than one cup a day, so I need a way to keep it fresh. I bought an Airscape 64oz container hoping to be able to just drop the entire bag in there and keep it fresh.

To my horror, Costco's coffee is sold by weight, while Airscape's containers are measured by volume. So I actually needed more than 2 Airscape containers if I wanted to store that much, though if I opened the bag and made a few cups of coffee I could get away with just 2.

The coffee container comes in various different colors, and 2 lids. An inner lid pushes down and has a one-way valve eliminating all the air from inside the container, and the outer lid keeps everything inside while still letting you see how much coffee you have left. As a design it looks great. In practice, when you push down on the inner lid, the valve let's some of the coffee grind out along with the air, so if you push down too quickly you can get a fine mist of coffee around the can.

As far as freshness goes, it's great. I'd keep looking for a better solution, however, since I think the inability to let air out without also letting coffee out is a problem. In practice, I think people actually just use these to store beans, which would have that problem. But I'm still too lazy to grind my own coffee. Do people actually think it's worth it to do so?

Tuesday, September 16, 2014

Health Scare

In late May, on my regular physical, my doctor looked at my family history and decided to do an a1c check.  To my dismay, it came in at 6.1, which meets the clinical definition of pre-diabetes, though just barely. My doctor looked at me and said, "Don't panic. I know I can't tell you to exercise more, but I'm going to have you talk to a nutritionist and we're going to kick this in the butt."

My meeting with the nutritionist needed preparation before hand. For a week or so, I weighed everything I ate and took it down on a spreadsheet. When I met with the nutritionist, she asked for my weight history, and then said that all I really needed to do was to lose about 7 pounds to have a significant effect. (I was 152 pounds) She then gave me a food exchange list and a plan to get my weight down. She also advised what I'd known for years, which was to double up on vegetables and reduce intake of other foods.

I weighed everything I ate for another week to get a feel for what it felt like to get myself at the desired calorie intake level. Once I realized that I should eat until I wasn't feeling hungry any more (as opposed to eating until I was stuffed), ditching the weighing machine was fine. The results were almost immediate, with me losing 2 pounds a week until I started the tour of the alps this year at 145 pounds.

During my tour, my habit of eating less bit me. I didn't realize I wasn't eating enough until the day I rode over the Gavia, when a particularly hearty meal the night before made me climb faster and ride harder and better than I expected, while still feeling hungry by the middle of the day. So I gave up the diet and at everything I saw for the rest of the tour until I reached Zurich at 140 pounds despite all that eating. For the first time, however, I'd lost 5 pounds during a tour and not become weak. I was riding as strong as ever, and my metabolism had sped up.

I expected that I might have trouble coming back into my diet, but it turned out not to be a problem. I kept losing weight until today, when I'm at 135 pounds, which is still 5 pounds more than when I first joined Google way back in 2003. But at 130 pounds back then, I had bone density problems, so I'm not in a hurry to get back to 130 pounds.  Interestingly enough, having lost about 17 pounds has been great for my cycling: I'm climbing faster now than I was in April.

Recently, I did another a1c test and it came back at 5.9, which was low enough that my doctor's office called me and said it was normal. I do intend to keep testing every 3 months to check, but the health scare is in retreat. I'm now optimistic that I can pretty much stay at whatever weight I want, given what I know about nutrition.

You may or may not know this, but Asians get diabetes at much lower weights than Caucasians. As an Asian person, I have to watch my weight far more carefully, and clearly while the average American of my height at 160 pounds is considered "normal", I cannot even approach that weight without health risks. But at least I caught my problem early and know how I can deal with it. For someone with my genetics, forewarned is definitely forearmed.

Monday, September 15, 2014

Review: Tunnel Vision

Tunnel Vision is Aric Davis' follow up to his novel, Nickel Plated. The character of Nickel was so compelling that when I saw it on the Amazon First program, I had to pick it up.

Unlike Nickel Plated, which was told almost entirely from Nickel's point of view, this novel shifts in perspective between Nickel, and the 3rd person perspective of June and Betty, two high school seniors who stumble upon a 15 year old murder of June's aunt Mandy. Mandy was a look-alike for June, and when a group of do-gooders start lobbying for Mandy's self-confessed murderer, June and Betty decide to team up and see if they can dig through to the truth after a case had been closed for 15 years.

The character of Nickel is great, and easily carries the story, and at the start of the novel he comes from a very dark place, having been betrayed by a former business partner and out for revenge. The vicious way he carries out the revenge is very dark for a YA novel, but it was in character. It's the rest of the novel where the transition from an out-for-revenge Nickel to a less extreme personality doesn't make a lot of sense. Sure, there's a budding romance between Nickel and one of the girls, but it happens too quickly and doesn't feel real as a result. In particular, the character of Betty isn't very likeable, and it's hard to believe that Nickel would let her into his life in such a dramatic fashion in the last chapter of the novel.

Nevertheless, this was a quick fun read, and very compelling. I'd pick up the next novel in this series.