The LEGO Story

Those of you who know me from my childhood may know that I had an obsession about LEGO when I was a kid. It was pretty much the only toys that mattered to me. I actually slept with some of the things that I built. This is probably true for some of you as well. I still have my huge box of LEGO set at home and every once in a while, when kids come to visit at my place, we still take it out for them to play.

I still think it is one of the better educational toys in existence today. I don't need to tell you that with LEGO, your imagination is the only limit. Well, of course, if you have a big enough set. Even if you didn't, it just meant that you had to stretch your imagination a little bit further.

In any case, below is the story about how LEGO started in commemoration of its 80th anniversary this year. Truly an inspiration to those of us who are starting businesses. In face of setbacks and desperation, the only solution possible is to never give up.

A Company With No Bosses?

Awesome. All you gamers out there must have heard of Valve. What you probably didn't know was that the company has no bosses:

Like many tech companies, Valve Corp., a videogame maker in Bellevue, Wash., boasts high-end espresso, free massages and laundry service at its offices.

One thing it doesn't have: bosses 

Valve, whose website says the company has been "boss free" since its founding in 1996, also has no managers or assigned projects. Instead, its 300 employees recruit colleagues to work on projects they think are worthwhile. The company prizes mobility so much that workers' desks are mounted on wheels, allowing them to scoot around to form work areas as they choose.

Monkey Business in India

This story about monkeys more or less taking over Delhi is so sad to the extent that it is borderline funny. OK, not in a humorous way, but in a tragic way. Here is the extract:

The monkey population of Delhi has grown so large and aggressive that overwhelmed city officials have petitioned India’s Supreme Court to relieve them of the task of monkey control. 

“We have trapped 13,013 monkeys since 2007,” said R. B. S. Tyagi, director of veterinary services for Delhi’s principal city government. Nonetheless, Delhi’s monkey population has only increased. 

The reason is simple: People feed them. Monkeys are the living representatives of the cherished Hindu god Hanuman, and Hindu tradition calls for feeding monkeys on Tuesdays and Saturdays.

...

Roopi Saran, a Delhi resident, has seen monkeys steal candy from the hands of her children. And tribes of monkeys often take over her yard, preventing her and her children from venturing outside. 

“So we sit inside our house like caged animals, like we’re the ones in the zoo and they’re the owners outside looking at us,” Ms. Saran said. 

With the city’s trapping program a failure, some residents are getting a bigger monkey, a langur, to urinate around their homes. The acrid smell of the urine scares the smaller rhesus monkeys away for weeks. But the odor is no bouquet for humans, either, and as soon as it disappears, the rhesus monkeys return.

Amar Singh, a langur handler, was sitting across the street recently from one of his langurs in Delhi’s diplomatic neighborhood while his monkey systematically stripped the leaves off a tree in the yard of well-tended home. The langur, a large monkey with a black face dramatically framed by white fur, was tied to a pole with a six-foot leash. Mr. Singh cautioned against getting anywhere near the animal because “a langur’s slap is so hard, it can send its target back by five feet.”

Langur = Badass

How Can Investment Bankers Survive Bonus Cuts?

This article from Bloomberg about how the cut in investment bankers' bonuses are affecting their lives was published a while ago, but I still can't get over how funny it is. Not that I am amused by the misfortune of others, but quite simply, I am amused at how unfortunate they think they are. Here are some excerpts:

Schiff, 46, is facing another kind of jam this year: Paid a lower bonus, he said the $350,000 he earns, enough to put him in the country’s top 1 percent by income, doesn’t cover his family’s private-school tuition, a Kent, Connecticut, summer rental and the upgrade they would like from their 1,200-square- foot Brooklyn duplex. 

“I feel stuck,” Schiff said. “The New York that I wanted to have is still just beyond my reach.” 

... 

The malaise is shared by Schiff, the New York-based marketing director for Euro Pacific Capital, where his brother is CEO. His family rents the lower duplex of a brownstone in Cobble Hill, where his two children share a room. His 10-year- old daughter is a student at $32,000-a-year Poly Prep Country Day School in Brooklyn. His son, 7, will apply in a few years. 

“I can’t imagine what I’m going to do,” Schiff said. “I’m crammed into 1,200 square feet. I don’t have a dishwasher. We do all our dishes by hand.”
He wants 1,800 square feet -- “a room for each kid, three bedrooms, maybe four,” he said. “Imagine four bedrooms. You have the luxury of a guest room, how crazy is that?”

... 

“People who don’t have money don’t understand the stress,” said Alan Dlugash, a partner at accounting firm Marks Paneth & Shron LLP in New York who specializes in financial planning for the wealthy. “Could you imagine what it’s like to say I got three kids in private school, I have to think about pulling them out? How do you do that?” 

... 

Scheiner said he spends about $500 a month to park one of his two Audis in a garage and at least $7,500 a year each for memberships at the Trump National Golf Club in Westchester and a gun club in upstate New York. A labradoodle named Zelda and a rescued bichon frise, Duke, cost $17,000 a year, including food, health care, boarding and a daily dog-walker who charges $17 each per outing, he said.

Now, you can imagine why you will never have enough money. The animal in us always want what we can't have. Being human is having the discipline to control that urge.

More People Have Phones Than Toilets In India

Despite cellphone boom in India, toilet access still lags - The Globe and Mail: 

"The “houselisting census” asked 246.6 million households a wide range of questions from what their walls were made of to whether they had a radio. Results are now out, and the survey found that 63.2 per cent of households said they had a telephone connection – that’s up from 9.1 per cent a decade ago, and the increase is due almost entirely to the rise in cellphone ownership."

However only 53.1 per cent of Indian households have access to a toilet – either one in their own home or in a shared toilet block. Less than one in three rural Indians has access to a toilet. 

UNICEF says that 640 million Indians are still “open defecators” – people who relieve themselves in fields or next to railway tracks – a figure that remains high despite hikes in government spending on sanitation projects. Local governments have tangled those projects in corruption and bureaucracy, and even in places where toilet blocks are built, people have been slow to adopt use of the new facilities.

Volume 3 Issue 51: Intelligent Investing

The Making Of A Rogue Trader

Who would have thought that doubling down and going for broke in times of desperation is an instinctive response that are found in the yellow-eyed junco (a type of bird)?:

"To know what goes on in the mind of a rogue trader – and that of every reckless gambler – it helps to be a bird-watcher. The yellow-eyed junco is a type of sparrow found in Mexico and the southern USA. Thirty years ago, three evolutionary biologists at the University of Arizona carried out a series of experiments with seven yellow-eyed juncos that had been caught in the south-east of the state. 

"The experiments were designed to test the birds’ gambling instincts, and the results were intriguing. One bird at a time was placed on a perch in an aviary 3.5 metres from two dishes covered with paper so that it could not spy the contents. The bird was trained to realize that if it flew to the first dish, it would always find two millet seeds to eat; if it flew to the second, it couldn’t be sure of what it would contain. Half the time, there would be four seeds, and half the time there would be none. The biologists were trying to discover how much risk the juncos would take in foraging for food – their main activity in the wild. Mathematically, the two choices were identical since a 100 per cent chance of two seeds was the same as a 50 per cent chance of four…. 

"In the first experiment, the birds were kept hungry for an hour and then allowed to start choosing dishes, with the seeds being replenished every thirty seconds. This meant that, whichever one they chose, they would get plenty to eat unless they were very unlucky. The juncos responded by being risk averse: in nineteen out of twenty-five cases, they chose the sure thing – the dish with two seeds – rather than risk finding nothing. 

"Next, the birds were starved for four hours, and the seeds were replenished only every minute. That tipped the birds into what the scientists called ‘a negative net energy budget’ – gaining two seeds each time they made a choice would not provide enough food to satisfy their hunger, and ultimately to keep them alive and enable them to reproduce. The birds responded by flying to the other dish instead. Facing loss, they started to gamble. 

"The scientists, led by Thomas Caraco, now a biology professor at the State University of New York, concluded that ‘juncos in nature will generally avoid risk unless they face difficult energetic stress’. In other words, they will choose the safe option for feeding – the closest natural equivalent to financial traders making money – unless they find themselves in danger, either through hunger or because it is chilly and they face a cold night requiring reserves of energy. 

"The choices are instinctive rather than intellectual, and they make evolutionary sense for the species. ‘Facing the possibility of starvation, animals are willing to gamble on the “strike-it-rich” policy of risk-prone foraging,’ writes Barry Sinervo, a professor of ecology at the University of California. ‘Some foragers will have a string of bad luck and starve. Some will have a string of average luck and still starve. However, there will always be those lucky few that experience a string of good luck. It is those lucky few that survive and pass on genes to the next generation’…" 

--John Gapper, How to Be a Rogue Trader

Maybe that is why some people say that traders have to have good instincts. As for me, I think that is why trading is most definitely not for everyone and is highly risky for the uninitiated. It relies heavily on instincts and emotions. Of course, you can throw in charting and technical analysis to help "remove" the emotional element, but very often, we see what we want to see.

HT: Brad DeLong

Volume 3 Issue 40: Two-Cent Economics

Greece Ran Out Of Ink

Now, Greece is in even deeper shit than they were. They ran out of ink to print tax forms. So, essentially, they don't even have enough money to collect taxes. So screwed.

Suicide Rates in Greece Up By 40%

This story is so sad. But it should serve as a lesson to us all. If Malaysia does not reform its economy, we will become like Greece in about 15-20 years time.

Lunch Break Reading: How to Marry Rich in China

There really is a market for everything. Now there is a class in China that teaches women how to get hitched with rich men. Read here and here.