Speculative Returns in the US Residential Housing Market

Lately my primary struggle seems to be separating the wheat from the chaff for investing assets. Scarcely is there more chaff than in the US residential housing market.

As empiricists we must be vigilant against the sales pitch disguised as generally accepted wisdom. When you buy a home, the conventional wisdom is: “at least you aren’t throwing money away on rent”. That statement ignores many factors, but I’m isolating the speculative capital appreciation component of housing returns in an attempt to answer the question, “Is residential real estate a good investment for the typical individual?” Just because your home is an investment doesn’t make it a good investment.

Methodology

I simulated 1000 5-year periods that behaved roughly like the period from 1987-2016 from the S&P/Case-Shiller Home Price Indices (Percent Change) available at:

S&P/Case-Shiller 10-City Composite Home Price Index© (SPCS10RSA)

The experiment approximates the returns an average individual can expect to receive. If they happen to live in a hot market or have a reliable source of discounted real estate, fortunes will abound. Though, relying on the returns of a hot market or others' ignorance of …

Why I'm Nuts About Alexa (Amazon Echo)

So, the Amazon Echo (or as I call her, Alexa) has changed my world in ways that nothing has since the iPhone.

I actually wasn’t all that excited about the device when I bought it. I thought, neat another bluetooth speaker with a virtual personal assistant, that’s pretty cool — preorder. But once I received it, it became immediately clear that this device was a little more interesting.

I plugged it in, played some music, got used to the voice controls. Fine, it does everything you expect and does it pretty well. But it stuck me that there’s about 99.9% of the stuff that I want her to do she doesn’t do yet (and yes, I’ve completely anthropomorphized her). So, being an industrious sort of person, I cracked open the API and got to work.

Like many people, there are a series of numbers I monitor all day long. Stock prices, bitcoin price, intra-day numbers for companies with which I’m affiliated. So, the first thing I did is start wiring her up to pull all those numbers for me.

Cue the Jarvis moment. This is when she …

part of my slow release of software I wrote over the past decade that others may find useful

In high performance systems, it it often useful to serialize and externalize logging of values to a database table. This program permits client to send messages in JSON that will be logged to a database table.

There is no authorization, so it is very important this daemon runs on the loopback and isn't accessible to the outside world.

Messages will be accepted in the form (JSON):

{
    "table": {
        "fieldname": fieldvalue,
        "fieldname": fieldvalue,
        "fieldname": fieldvalue,
    }
}

Project Link

https://github.com/joshua-peck/etrelay

INSTALL

Obtain mysql-python from: http://sourceforge.net/projects/mysql-python/files/

tar -zxvf MySQL-python-1.2.3.tar.gz
cd MySQL-python-1.2.3
sudo python setup.py install

$ sudo easy_install python-daemon
$ sudo easy_install pyzmq

Also requires json, which I already had on my system, but you may not have on yours

You can test by running in the foreground with ./listener.py

USAGE

Database

Needs a MyISAM database table (or memory, or other which supports INSERT DELAYED).

mysql> create database etrelay_test ;
mysql> use etrelay;
mysql> create table vendor (datetime datetime, field1 varchar(50), field2 varchar(50), field3 varchar(50 …

Learning Programming and Logo

I recently caught a thread on Reddit. The general question posed was, "Why has this got so much harder to do? Why kids don't program any more." You can read the discussion and see the original post on the site with the aforementioned link.

He really asks two questions:

1. why are simple (fun) things hard to do with today's computers
2. why aren't kids excited about programming

The way the question is asked exposes the bias of the author, who obviously thinks that the complexity of today's software is to fault for the lack of enthusiasm. Summarizing, he believes that because technology has become more complicated and inter-dependent, children are less able to do interesting and fun things with computers. That may be so, but I think there is a much simpler answer:

1. computers aren't new anymore
2. computers are fun without knowing how they work

When I was young, the computers we had didn't have a lot of software written for them yet, and the software written for them was expensive (for a 10-year-old). But they were new, kind of interesting, and didn't have an internet connection. Without a lot of software to play with, and no …

Technology as a Means to an End

I admit I find technology a little less exciting than I used to. I reminisce about the good old days; staying up all night hacking in the latest programming languages and IDEs, trying the latest versions of all the cool operating systems, and applying all of this knowledge to my daily projects.

Maybe I'm burnt out on the rapid changes in all technical arenas. Maybe I'm disgusted with the specialization that HR and recruiters seem to require. Maybe I'm just becoming a better technologist...

There seems to be a natural progressions for nerdfolk out there:

1. Learn a lot about technology
2. Reach critical mass of tech knowledge
3. Relax and realize it's just a tool
4. Reject technology and become a yeoman farmer

Earlier in my career I was both more excited and less learned. I see this combination in almost all technology professionals coming up today, so I'm calling it a trend. It seems to be the nature of the beast that the most energized and motivated people -- those who push the envelope of technology -- also cause the most downtime/bugs/negative outcomes.

This passion is both the greatest asset of the young technology professional …

It all started innocuously enough. I was talking to a colleague recently and through no fault of our own, the conversation turned to intellectual property.

He boldly stated:

"What you really need to do is to apply for a patent for your [software] technology"

Grrrr...

For me, patents have always been a tradition of a bygone era, almost like a land-line telephone or dial-up internet. Patents addressed a problem that doesn't exist in software and most of modern technology. Sure everyone wants to patent their invention because it seems like the thing to do, but is it really?

Three things happen when you apply for a patent and two of them are bad.

• Someone reads you patent documents, makes a trivial modification to it and uses it in a way that's virtually impossible to prove. (50% probability)
• Your legal fees eat all your profits for the next 5 years. (60% probability)
• Everyone respects your patent, thinks you are a genius, and throws money at you to use your technology. (0% probability)

Conceptually, patents are designed the protect the investment into R&D for a technology, insure that enough lead time is given to permit the owner of the patent to …

Why Nerds Think They Know Everything

I work with technology. I love technology. Making some infernal contraption do my bidding is a puzzle that never gets boring for me. I expect a lot of other technical folks out there can identify with this feeling.

One thing that I couldn't figure out for a long time was the derision technical people faced in the workplace. But I think I have a little bit of an answer. For a long time I've wondered why there is such a gap between corporate IT and the people it serves. Both sides of the fence think the other side is full of egotistical idiots. But why?

I often hear complaints from my non-technical friends about their IT staff "thinking they know everything." I thought about this a little and realized, yes, technical people do think they know everything. But then why do technical people think this? I know that a lot of technical people are very smart, but I know a lot of smart people outside of tech too. How is it that people in the technology world showing their brains off became more offensive than anyone else showing competency in their work?

Alright, I'll …

The MySpace Spamularity

It's finally happened. MySpace has reached a point where it now defies all laws of physics and creates matter (SPAM actually). Recently, for reasons that are beyond explanation, I logged into my MySpace account. This would normally be a non-event, since I have only a few links in my MySpace profile, but this time I noticed a strange occurrence.

During the time that I was logged in on my MySpace site, I receive about 10 SPAM messages from MySpace users advertising various websites (mostly porn). So I logged in the next day to delete the SPAM and while I was logged in, I received another 20 messages that were porn-SPAM.

When users are punished for using your software, but they still use it, that's great Web 2.0.

Ok, this is hilarious. The amount of MySpace SPAM I receive is directly correlated with the amount of time I spend logged into the system. The more I log into the system to delete the SPAM, the more SPAM I receive. Their system actually provides a disincentive to use their site. Awesome!

Here, in a highly scientific graph, I display the effect.

[INSERT IMAGE]

As you can see, as …

On Driving and Management

Against my best instincts, I recently began using Facebook. While on the site, I managed to stumble into a message board where there was some discussion of where the best hamburger in Kansas City could be obtained. My interest was piqued immediately since I do love a tasty burger. I prepared my saliva ducts and began reading the comments, foolishly expecting that the discussion would center on the finer attributes of culinary delight that can be received when the Chef du jour is an acne-ridden 16 year old.

However, within 5 comments, the thread had completely devolved into a discussion of the cultural heritage of the commenter. When reading this, it became clear that there was a major rift between the people who live in Kansas City, Kansas versus those who live in Kansas City, Missouri. By the time the thread reached about 20 comments, the discussion had completely devolved into a discussion of who is the worst driver.

Apparently, all Kansas drivers believed that Missouri drivers were the worst and all Missouri drivers believed Kansas drivers were the worth. Now, we all know that Oklahoma drivers are the worst drivers in the known universe, but …

Document, Automate, Delegate

Everyone I know who works in IT is overworked. Really overworked! Overworked like nothing I have seen before in any other field (excluding hedge fund managers). Is IT the only profession where there is a never-ending supply of urgent work? Has the youthfulness of the IT industry blinded it to traditional work-flow management techniques? Are a few evil-minded overlords afraid they will not be valuable if they do not keep all the secrets hidden?

Why are highly skilled (paid?) IT staff performing repetitious work? Does IT just attract egos who refuse to believe something that was "that hard" to figure out could be done by someone without a degree and without 10 years of experience in the technology field?

Could it be even more simple? If we think about what challenges IT workers, maybe we'll gain some insight into what they like to do. When asked, most IT workers describe the reasons they got into IT as (in no particular order):

1. Solving Puzzles
2. Money
3. Dazzled by wires and buttons

If we understand that IT workers generally tend to think about their tasks in terms of getting them done (solving the puzzle), not in terms of how that …

NAIVE Goals

So, it's that time of year again. I'm beginning to start to put together personal and professional goals for the next year. I tend to do this process every fall so I don't get lost over the winter and watch too much television.

Everyone keeps telling me that I need to have SMART[1] goals, but I don't believe it. Anything really great that I have ever undertaken has started with a goal that was COMPLETELY INSANE at the time. There was no possible way to measure it and that was because I had absolutely no idea what I was doing.

Clearly, I was naive when I attempted these feats, but I'll let you in on a little secret...

I didn't fail at all of them!

Perhaps by trying to relate future challenges to things I already know, I prevent myself from pursuing possibilities that I can't imagine yet? The difficulty of course, is imagining goals that are not natural extensions of your previous life experiences. How could I possibly imagine what doesn't directly relate to my past experiences? Why, by using my own creativity of course! Perhaps this is was the death of SMART for me. Once …