Archive for March 2012

Lottery Tipping Point


I’m fascinated by the excitement around a $500M lottery jackpot. I wonder what the tipping point is that causes people to purchase numbers when they wouldn’t do so ordinarily.

Is it a function of the specific size of the pot or of the publicity surrounding the size of the pot?

If it’s the publicity, I get it. Who wants to be left out? But if it’s the size of the pot, it makes less sense to me. Why is winning $500 million different from a $50 million or even $10 million pot? How does the size of the pot matter? What? $10 mill isn’t worth your time?

Anyone have opinions or informed perspectives as to why lottery excitement causes people who wouldn’t ordinarily buy tickets decide to do so?

The Build or Buy Decision

Personal Finance News, Videos, Reviews and Gossip – Lifehacker.

Businesses constantly need to make decisions relating to new capacities they would like to have and whether they should build the capacity themselves or pay for the use of a pre-existing capacity.

Individuals and families need to do this also.

Two popular tools used in business are the Total Cost of Ownership calculation and the Return on Investment calculation. These are quantitative measurements favored by accountants. They only have one problem:

TCO and ROI are usually shitty indicators of value. There are at least two reasons for this:

  • They are based on assumptions that are almost always biased toward the decision desired by the person or team making the calculation. Or they are based on assumptions that conflict with each other because the assumptions are formed by people with conflicting biases. Biases can be something as simple as an “industry standard” or an average or an assumption pulled out of one’s nether region.I don’t think I’ve ever participated in a TCO or ROI calculation that was free from bias. In other words, TCO and ROI don’t often map very well to the real world.
  • They don’t consider other costs that are qualitative or ambiguous. Examples of those costs are opportunity cost, which can be qualitative, the emotional cost of a decision (e.g. morale, the negative emotional consequences when there is low buy-in on a decision, the realities that people often buy things simply because they want it, etc.)

Many years ago, I was involved in helping a leader justify a substantial software purchase. I was in favor of the purchase but there was a lot of resistance to it. I did a lot of research — more than the research conducted by those who opposed the decision. We debated and we had some different ideas of TCO and ROI but in the end, my position was better-argued because I tailored the argument to the biases of the leader. Those opposed based their arguments on “the better system,” which coincidentally was the one we had in place. The leader chose in favor of the purchase.

One of those people who didn’t support the decision later complained that it was a waste of money and we just did the project because it’s what the leader wanted. I asked the individual if he had ever bought a video game that he couldn’t afford (because Xbox was one of his passions). He replied, “Sure.” I asked him how he justified it. He said, “Well, I just charged it.”

I told him, “Leaders are just like you. They buy things because they want them. The only difference is that their checkbook is bigger than yours.”

That’s really what the build or buy decision comes down to: desire.

And the predominance of desire in a purchase decision is what is always ignored in the evaluation of the decision. Yes, desire is assumed at the beginning of the process but it’s not part of the value calculation.  Once the decision to build or buy is made, the level of desire isn’t part of the calculation at all. In other words, there is no factor in the ROI or TCO calculation that attempts to weight and value the level of desire involved in the acquisition of a new capacity.

You could perhaps argue that if your hurdle rate is 12% and the ROI is less than 12% but still choose to build or buy the capacity, you have implicitly factored desire into the calculation. But that begs the question: If you were going to do it anyway, why go through the ROI motions?

I tend to ignore these article not only because they deny the value of desire but they ignore another important kind of value.

This article bases the decision to DIY or hire someone solely on a pro-rated amount of your net salary. They don’t take into consideration whether you have the talent to do it or whether it will actually take more time to DIY (because it ALWAYS takes more time to DIY). Further, the calculation doesn’t consider the quality of the results. Sure, I might be able to paint my walls but every time I’ve painted the walls, I have regretted the mess and the process because at the end of every painting project, the fact that I did it myself is very apparent. So too would the quality have been apparent if I had hired someone to do it.

In addition, there are the potential consequences from a DIY effort: frustration, unfinished projects, arguments with friends and loved ones that last during the project’s duration, damage to property as a result of inadequate skills, the costs of single-use tools that can’t be used in future projects, personal injury, liability from poor work that adversely affects others, and so on.

So, I get the intent of the article and the calculation tool. But it’s incomplete because it doesn’t take into consideration that there is much more at play then merely a pro-rated cost based on one’s net income.

Let me put it this way. I worked for a man who invited me into the real estate appraisal industry. We had some great talks as we worked on appraisals together. Kern told me that he was a bit of a hellion in his youth and as a result he was always poor. He had to fix everything he owned. The one thing that caused him to change the way he lived his life was he decided he didn’t want to have to fix something again. He wanted other people to fix his things. And that meant that he needed to approach his life more responsibly.

In most cases, I would rather pay someone else to do something, even if I could “do it myself” for less money. And that’s because I have found that in the long term, it is better for me emotionally, circumstantially and financially.

The iPad Doesn’t Excite Me


What Would It Take For Apple to Make a New iPad Truly Exciting Again?

This Gizmodo article discusses ways to get the iPad to be “truly exciting.” Some of them are a bit ridiculous, like flexible materials. But others are spot on: a nonsensical, outward facing high-quality camera is of no use on a device this large, and using a cable to synchronize data is absurd when wi-fi and Thunderbolt are available.

The single biggest change the iPad needs is to weigh a lot less than it currently does. It’s beautiful, but it’s too damn heavy. And it’s too big. It’s not comfortable to hold for more than a few minutes, which makes it an inconvenient e-book reader unless you set it down on a desk or your lap.

The problem that I have with the iPad is that I am always aware it’s in my hands. It doesn’t simply disappear from my awareness. It’s always there, heavy in my hands, reminding me that I have a huge, beautiful heavy tablet in my hands.

Books disappear. The iPhone disappears. A steering wheel disappears. The Magic Mouse disappears.

The iPad does not.

I don’t need a tablet to have bendy pages. I want it to have a screen somewhat larger than my iPhone, I want it to be thin and light with a clean interface. All of these need to come together to make the tablet disappear from my awareness. And to give me an experience that delights and amazes me.

It took the Kindle Fire to make me realize I do have a desire for a device that sits between my iPhone and MacBook Pro. The Kindle Fire is decent. That’s all it is. For $200, it’s a decent enough tablet. It does a very good job of serving up Amazon content but the Android experience is severely lacking, mostly because Amazon has locked it down to keep it Amazon-centric. It is not possible to download applications from the Android Store (now inanely called Android Play) and this pissed me off because Amazon doesn’t serve up the Android Facebook app. Seriously: this greatly diminished the tablet experience for me.

What sealed the Fire’s fate with me was my realization that I was aware of it when I held it. It has a smaller form factor than the gigantic iPad but it’s not invisible.

And I thought: Fuck. If I’m going to be aware of my tablet and I can’t get the apps I want to have then I may as well get an iPad. I even went so far as to ask my CFO for a capital expenditure request approval and I drafted an email to give my friendly-yet-scary-zealous Apple bigot, Kevin, a heads up so he could write an excoriating piece of public mockery on my Facebook page.

I almost gave in to the iPad.

And then I thought: Fuck. I made it without a tablet before I had a Fire, so it’s stupid for me to get an iPad just to get a “tablet” because I don’t like the iPad. Why should I settle for a piece of technology that doesn’t satisfy me? The iPad fails to satisfy any of the critical requirements I have for a tablet.

I thought: “Why should I make a $500 concession?”

So I looked into the Samsung Galaxy Tab. After going to Best Buy and fondling the 7″ and 8.9″ models, I ended up buying the 8.9. It’s beautiful, thin, light, has an excellent display, has full-on Android OS (which is much better than I expected) and most important:

It disappears in my hands.

This past weekend, I experienced a number of moments of delight with the Tab. It reminded me of the first time I sat down with the original iPhone.


I spent an additional $150 over the cost of the Kindle Fire but I got a device that pretty much nails what I want from a tablet but couldn’t get with the Fire or iPad. The folks over at Crate understand.

Seven Things I Wish I’d Have Known When I First Became A Photographer « Photofocus

Seven Things I Wish I’d Have Known When I First Became A Photographer « Photofocus.

Lately, I find myself wanting to take pictures but fearing the crap that I will take. Recently, I shot some pictures at Red Rocks outside of Las Vegas. I was pretty happy with them for the most part. Red Rocks is one of those places where it’s hard to take a bad picture.

But when I look at them a month after taking them, there’s a lot lacking. Most of what they lack is better composition. The thing is, the composition would have been better if I had just taken more time with them. But it was bitterly cold and for some reason, I felt rushed so my pics were kind of click click click.

I procrastinate writing more fiction because I can’t stand writing shit. And I feel the same way with photography: I am reluctant to shoot pictures because I hate not getting on “film” what I saw in my mind’s eye. The pathway to being better at something is to fail at something but in order to fail at photography, I need to get behind the camera and push the button.

There are three actions I need to take in relation to the list in this article:

  • Know my camera’s functions inside and out
  • Focus less on gear and more on composition
  • Find the light first, then the background then the subject

I don’t need more crap. I need to think more about my composition.

Portraits of Little Girls and Boys with Their Pink and Blue Things

Portraits of Little Girls and Boys with Their Pink and Blue Things

The parents of these children are out of control. Kids do these kinds of things because parents allow it or encourage it. This is not art. It’s documentation of fetishism and hoarding.

William Eggleston Digital Pigment Prints Fetch $5.9 Million at Auction

William Eggleston Digital Pigment Prints Fetch $5.9 Million at Auction

After reading several articles about pictures that have fetched high prices in auctions (including PetaPixels’ post of the sale of Gursky’s photo of the Rhine for $4.3M), I have come to the conclusion that photography collectors have absolutely no sense of what makes a photograph compelling, much less worth exorbitant amounts of money.

Ultimate Garage

Ultimate Garage on Pinterest.

Chicks rule Pinterest. It’s basically an 80% female to 20% male ratio. So, it’s loaded up with all kinds of girly things: clothes, romantic sayings and food galore.

Consequently, I decided to bring some testosterone to Pinterest.

For years, I’ve joked that when I am wealthy, I want to have a different BMW for every day of the week.

I decided to build out my ultimate garage as a Pinterest board. So check it out here: Pinterest Ultimate Garage

What Greece Means –

What Greece Means –

I have been one of those pundits intoning with great wisdom that Greece is a cautionary tale for us, although I’m more of a wanna-be pundit than a real one.

I’m not one of those people who keeps up with all the rhetoric of sound-bite conservatives so I don’t know exactly what they have asserted. But in my reading, I’ve not seen anyone say that we needed to invoke Greek-like austerity measures. I agree with Krugman: it would be misguided for us to employ austerity measures to the same degree as what Greece is required to apply. However, it would be prudent if we spent less than we do. The “yeah-but…” objections to the Bush wars, valid as they may be, are immaterial because the mentality in Washington has been “me too” retaliatory spending. The cycle goes on and on with both parties playing heavy hands.

Yet Krugman admits Greece has no good choices other than leaving the Euro. In other words, though he doesn’t like austerity, he has no solution for how to get Greece out of their economic calamity. He makes the somewhat silly assertion that Europe could help by demanding less austerity and “do more to boost the European economy as a whole,” as if Europe, and Germany in particular, were somehow withholding a stronger economy from Greece and themselves.

Where Krugman errs in his analysis is that he fails to identify why Greece is in the condition it is in. He identified that Spain’s issues were caused by a troubled private-sector but didn’t offer a similar assessment of what brought Greece to where it is at today. Unless I have missed something, the cause of Greece’s calamity has been profligate government spending.

Further, he makes the comical observation that because we can borrow even more at “historically low interest rates, we we don’t need to enter a downward spiral of austerity and economic contraction.” It’s funny because politicians, like Krugman apparently, also are astute at justifying debt to pay in the future for expenses today and the problems we have now are the result of both party’s use of debt to appease their constituents.

The cautionary tale of Greece and of the past five years is that when governments, banks and businesses are leveraged with debt with a view to future payoff, and global economies happen to tank at the same time, those countries with too much debt are at risk. Given the interdependency of economies, it amazes me that American economists still justify debt with the arrogant swagger that says, “our currency is hella strong, yo.”

We don’t need to invoke austerity measures. We simply need to spend less.

Governments and Colleges Want Facebook Access


Red Tape – Govt. agencies, colleges demand applicants’ Facebook passwords.

This is silliness. It’s easy to create an alternate Facebook page and give the people what they think they want.  It’s easy to let the coach’s designated assistant be a friend and then block that friend from seeing much of anything.

But that’s not really the point. The point is that this is a one-sided level of personal exposure. It is a demand from an employer that they have full access to a candidate’s personal life without reciprocating with a similar degree of transparency. It implies that the employer is the only entity with something at stake when they make a hiring decision.

It would be very interesting for a candidate to respond to a request for Facebook access by saying, “I’d be happy to log in here so you can review my Facebook page as long as the person who would be my manager will log in and let me see his or her Facebook page.”

I understand that times are tough and there are people who would be willing to do just about anything to get a job. But an organization that demands this kind of revelation is not someone I would want to work for.