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This week I read Bad Paper: Chasing Debt from Wall Street to the Underworld by Jake Halpern. I picked up this book after hearing about it on Planet Money: The Buffalo Talk-Off. The book was better than I expected. I found out about a side of the economy that I would probably never experience, debt collection. I always pay my debts, but most Americans owe money. Debt Market Banks are required to take a loss on a loan after 180 days if you stop payments under generally accepted accounting principles (GAAP). They need to get it off their books. To still extract money from defaulted loans, they will sell them for pennies on the dollar to debt collection agencies. Those agencies try to collect debt and make big profits, but sometimes they can’t collect all the debt and resell what’s left for less than pennies on the dollar. This keeps getting passed to the lower and lower rungs of debt collection agencies until it eventually reaches a lawyer, who will try to sue and get judgment to garnish wages. But there is no paper trail other than a spreadsheet. If you actually show up in court and ask the lawyer to prove their case, they will drop the case, because they can’t. So if you borrow money, ignore debt collectors and show up in court to tell them to prove your case, you never have to repay your loans. You have to be careful about not making a payment, because that could reset the statute of limitations. You’ll just have shitty credit, which doesn’t matter if you deal in the cash economy. Some unscrupulous individuals will try to sell paper without a clear line of ownership and sell the same paper to multiple people. Ex-cons can’t find legitimate jobs except through other ex-cons who run debt collection agencies. Debt collection turns out to be more profitable than selling drugs on the corner. Some debt collections will do illegal things like threatening physical harm or making false statements about jail and lawsuits.
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This wee I returned Effective Modern C++ to the library after only reading the first few items. Wasn’t work reading it unless I was currently in the middle of writing C++ code. I found out what auto means. C++ has changed a lot over the years. I have some catching up to do, but C++98 can still get me somewhere.
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This week I partially read Lombard Street: A Description of the Money Market by Walter Bagehot, because this book was reference in another book that I read. This book was written in 1873. Normally I’d be really interested in books like these. I am, but I need to focus on cut down on nonessential reading since I can’t absorb any information while my mind is somewhere else. It is funny that money hasn’t changed much in over 100 years. What was applicable back then is still applicable today. Amazing. Ties in nicely with how finance enables large scale projects like railroads and how banking is built on credit and trust. Since I moved to privately published posts, I feel no obligation to write more. Like Marie Kondo says, remove stuff that doesn’t bring joy.
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This week I read The ETF Book, because I’m procrastinating. I though this would be a really boring and dry subject, but I learned a few things. I learned that Vanguard has a patent on Vanguard Index Participation Receipts (VIPERs), the structure of their ETFs, which are special class shares of their mutual funds. When you’re buying something, you should know what you’re buying. There are many different type of exchange portfolios as detailed below. | Grantor Trusts | Investment Trust | Exchange-Traded Notes (ETN) | Unit Investment Trust (UIT) | RIC Open-Ended ETF | RIC Vanguard ETF
—|—|—|—|—|—|—
SEC Registration Act | 1933 | 1933 | 1933 | 1940 | 1940 | 1940
Company dividend reinvested | No | No | Implied | No | Yes | Yes
Portfolio pays dividends | Yes | Yes | No | Yes | Yes | Yes
Redemption in-kind option | Yes | No | No | No | No | No
Tracking error | NA | Yes | No | Yes | Yes | Yes
Credit risk of issuer | No | No | Yes | No | No | No
Manager discretion | NA | Yes | No | Restricted | Yes | Yes
Allows concentrated positions | Yes | Yes | Yes | No | No | No
Traditional fund share class | No | No | No | No | No | Yes
Economic Cycle Investing 
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This week I read Light on Yoga by B.K.S. Iyengar, because I want to enhance my practice. This is the bible on yoga. It has descriptions and photos of 200 asanas, different yoga postures. The appendix has a 300 week course if you want to be able to do all the poses. Although many fail to get past week 166. It is recommended that you do your practice under a guru. The origins of the word guru come from gu, darkness and ru, light. You need control over the mind to be absent of desire, fear and anger. It is thought that the loss of semen leads to death and its retention to life. 8 Stages of Yoga
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This week I read Never Split the Difference: Negotiating As If Your Life Depended On It, because I need to get in touch with my emotions. Doesn’t explicitly label and organize within a chapter since stories are mainly a narrative to illustrate techniques. The end of the chapter summarizes points. Can probably just read summary at end of very chapter if you’re busy. Sometimes theory doesn’t match up with the real world. Chris Voss’s real experience as an FBI hostage negotiator was gained by people dying. You can benefit from their deaths by reading this book and finding out what works in practice. Conflict
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I wanted to read The Most Important Thing, but I wound up reading The Most Important Thing Illuminated, which had added unneeded commentary. I can see why you would annotate something like the bible, but this is not really a book you need to add annotations, especially smack dab in the middle of the text, which breaks the reader’s flow. The author, Howard Marks, is a cofounder of Oaktree Capital Management. The book grew out of a series of memos he sent to his investors. Instead of blog posts turning into a book, this is a bunch of memos turned into a book. If you’re looking for specifics, you won’t find it here. This is a collection of a lot of different “most important things” that investors need to consider in order to be successful. It is not one thing that makes you rich, but a lot of small things.
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This week I read Eat That Frog! from SmarterComics, because I wanted procrastinate by reading a book. I intended to read Eat That Frog!: 21 Great Ways to Stop Procrastinating and Get More Done in Less Time the book, but wound up with the comic book instead. Previously I read Getting Things Done, which already put me in the mindset of doing things to become more productive. There’s no explicit list of 21 items in the comic book, so I’ll just assume each panel in the summary section is one of the 21 ways.
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This week I read Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages by Carlota Perez, because it was recommended by multiple sources. I had to pay money to purchase this book since it was not available at my local library. VC blogger Fred Wilson wrote about bitcoin in the Carlota Perez Framework. The book is divided into three parts. Part I talks about technological revolutions. Part II talks about financial capital in relation to technological revolutions. Part III talks about why this reoccurs. It is a difficult book to read when you have ADD, because it is easy to get lost in all the thoughts. Took me a lot longer than expected to get through the book. I think of the book is analogous to what happens when you crossing the chasm as a society due to technological changes. This isn’t an app you’re trying to get someone to use, but a large technological shift that is push and pulled by financial capital. The Sequence The sequence of technological revolution, financial bubble, collapse, golden age and political unrest is a consequence of capitalism, the interaction between technological revolutions and financial capital. It is not innovation, but how innovation spreads that causes this to be cyclical. You can decompose the sequence into 2 periods, each with 2 phases.
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This week I read Bandit Algorithms for Website Optimization, because I wanted more reference material for the Problem of the Month: Multi-Arm Bandit post. This book is a starting point if you find things on the internet too mathematical. It has code examples in Python. The figures in the book are plotted using R.
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This week I read Weapons of Math Destruction by Cathy O’Neil, mathbabe, because she accuses me of building WMDs. O’Neil is a data scientist with a PhD in mathematics from Harvard, who was previously a professor and a quant for D.E. Shaw during the Financial Crisis of 2008. I have a few issues with the book other than it saying that I have fallen to the dark side of big data. The book goes over how models affect a person’s life through their lifetime starting with school, college, courts, work and voting. O’Neil’s main point is that correlation does not imply causation and unfortunate individuals are lumped into groups by association, which damage their prospects for life. For me, there are probably bigger underlying issues that need to be addressed. The models are merely a reflection of reality. Businesses treat people like cogs, because they are cogs. Weapons of Math Destruction
