Life Without Global Internet Unimaginable

Added on by C. Maoxian.
Beijing has ordered state-run telecommunications firms, which include China Mobile, China Unicom and China Telecom, to bar people from using VPNs, services that skirt censorship restrictions by routing web traffic abroad

I lived in Beijing from May 2005 to July 2015. The main reason we left was the deadly air pollution, but a contributing factor, and not an insignificant one, was the tightening grip the State had on the Internet. I first began using a VPN in China after Twitter got blocked in June of 2009? (if memory serves). More and more sites got blocked over the following years making it essential to have a VPN, with Gmail being "the last straw" for the few remaining VPN holdouts when it got blocked in early 2015? (again if memory serves).

I cannot imagine living in China and not being able to access the global internet. I certainly wouldn't consider living there now, or even doing a semester of study abroad there, without unfettered access to the global internet (via a VPN). Maybe that's what Xi wants? 

Notes for Chat with Traders, Episode 106

Added on by C. Maoxian.

Episode 106 ... Turney Duff (76:04)

  • Wrote a book called "The Buy Side" in 2013
  • Consulted on the TV show, "Billions," tries to make dialogue and situations more authentic
  • "A Story of Spectacular Excess" the subtitle of his book
  • Grew up in small town in Maine, wood-stove heated house, in the 1980s
  • Three older sisters, simple way of life
  • Went to Ohio University, journalism major, 970 SATs
  • January 1994 moved to NYC, $1,400 in the bank
  • Thought he'd get a job at a magazine
  • Thought Goldman Sachs was a fancy department store
  • Had an uncle (Tucker) in the business, got him 10 job interviews 
  • Had one suit from Filene's Basement
  • Interview at Lehman, saw the trading floor, reminded him of a casino, it was intense, he was hooked
  • Got an offer at Morgan Stanley, PCS, Private Client Services, sales assistant job
  • Lots of admin bullshit, but learned a ton, loved his job, there for five years
  • Bulk of clients were high net worth individuals ($10MM-$100MM)
  • [Duff has a great smoker's voice, wonder how many packs he smokes a day? Newports, he says]
  • Got a call from Galleon Group because they needed a sales assistant, they knew him from Happy Hour
  • $300MM hedge fund in 1999
  • "Expect to be fired every day; it's a good day if you're not"
  • Low man on the totem pole
  • Insider trading was the norm in 1999
  • First year Galleon up triple digits
  • Wouldn't take the time to get to know any new analyst since most would leave within two weeks
  • Gary Rosenback head of trading desk, #2 behind Raj Rajaratnam
  • David Slaine, "dream informant" ... took down 30+ people in insider trading scandal
  • Raj was happy-go-lucky, but capable of extreme wrath
  • Raj would create rivalries between two like individuals in the firm
  • Raj arrested Oct. 16, 2009, sentenced in 2011
  • Appease the public after Wall Street bailout by taking down insider trading rings
  • Galleon's phones were tapped
  • Drugs and alcohol consumed his life, he was "all about the party"
  • One and half year's into Galleon, went from assistant to head trader
  • Later went to Argus
  • He was good at gathering information, making new relationships
  • Take emotion out, you become a better trader
  • First big trade -- shorting Sepracor (buying puts) on generic Prozac news
  • Made a million in 20 minutes in Sepracor
  • Analyst told him hospitals don't hire nurses anymore, it's all contract work through staffing companies
  • Bought a slew of staffing companies, then told handful of buddies about the trade
  • Lots of upgrades, made a ton of money, made sellside guy a hero (he was ahead of the Street)
  • Fellow buyside buddies also made out -- general good cheer all around
  • 2003, he's 33 years old, doing  $50-$60MM a year in commissions, sellside anxious for a share of it
  • Sellside had unlimited expense accounts, any restaurant, any bar, any sporting event, any film festival, any private jet travel
  • Scoring drugs or hookers together with a broker is a bonding experience
  • Spend $10K on the kid [him] a couple of nights, it's worth a million in commissions
  • Do entertaining off the books, no paper trail
  • Thought if he had one more steak dinner or martini, he'd explode
  • Would buy 200,000 SPYs from someone just to get out of going to dinner with them
  • Life of the party, a fun guy 
  • First time he did cocaine, he was thrilled (but sensed it could become a problem), felt that good
  • Drugs, sex, money, alcohol, power -- all mixed into a cocktail that's hard to refuse
  • Took two years before he was using cocaine weekly, then later it became daily
  • Cocaine mainly came from sellside, only had to pay $200-$300 a week out of pocket
  • Hookers once a week, $400-$2,000
  • Born in 1969
  • "Black hole of addiction"
  • Oct. 2006 feigned mugging by throwing self into puddle until bloody to miss work without getting fired
  • Made $1.9MM in his biggest year
  • Made $10MM over seven year period, mostly bonuses
  • "Jump ball" -- 15% of bonus pool up for grabs
  • Went from Golden Boy to forced into rehab
  • Hungover you don't "pick up as many lights" (answering calls)
  • Doing cocaine, you can't sleep, you can't stop
  • "New York, the city that never sleeps. Miami, the city that can't sleep" 
  • Can never match high of first line, feel fantastic for 15 minutes
  • Can never get feeling back later no matter how much you snort
  • Stored his coke in his sock drawer
  • Had a daughter with his girlfriend
  • Lives in middle of Long Island now, two miles from daughter, sees her daily
  • Pays $1,300 a month in rent, just getting by, trying to stay sober
  • Fatburger investment of $1MM a zero
  • Bought house at peak in 2007, $2.1MM put in $500K more, sold for $1.2MM
  • His old Manhattan apartment was 2,700 sqft, paid $9,300 a month in rent
  • Basically pissed away all his money, "living like an asshole for many years"
  • Made $22,000 a year at Morgan Stanley, thought if he made $50,000 all his problems solved
  • When he made $2MM a year, thought if he made $3MM all his problems solved
  • Money makes life easier, not happier
  • Look at your intentions versus your actions [sounds like rehab talk]
  • www.turneyduff.com
  • Twitter: @turneyduff

My First Successful Uber Drive

Added on by C. Maoxian.

As I mentioned before, I have begun to drive for Uber, sort of as an experiment in sociology and economics. I'm not sure how long this research project will last, but I'm willing to give it a few weeks or months of very part-time attention.

I turned on the driver app for the first time yesterday and accepted a request. When I arrived at the pick-up point, the kids said they had cancelled the Uber, but I said go ahead and get in since I was just learning the ropes. Uber charges people $5 for a cancellation, and the driver collects $3.84? of that (will have to check the exact number).

Today I turned on the app and accepted a request, which again got cancelled just as I arrived (and a cab pulled up) -- another $3.84. The next request I accepted, I messed up starting the journey on the app at the pick-up point, and totally botched that trip which resulted in *no* money, but it was a short jaunt and a small price to pay for figuring out how to operate the app in real time.

The third request I accepted, I worked the app correctly, and took some kids from the airport to a rental car office. The details from that trip are in the screenshot below ... it looks like you get around $1 a mile, which ain't great, certainly less than I expected ... I will have to collect a larger data sample before I can conclude that it doesn't make economic sense to drive for Uber. 

TV Shows Watched -- Gypsy

Added on by C. Maoxian.

Another Netflix Original Series. I love Naomi Watts, always have ... she's another super-talented Aussie actress. She's exactly my age (ok, two years older) and still looks great, usually ... I mean from some angles, in some lighting, she looks her age, but generally she looks good. 

She plays a shrink here ... a bored shrink, with a boring fake sociopath lawyer husband, and troubled elementary-school-aged daughter. They live in Westchester or Rockland county and commute into the City for work. Big house, fancy clothes, "upper middle class white people." Naomi pops anti-anxiety drugs and steals prescription pads from her doctor friends (she's a Ph.D., not an M.D., so not a real drug-dispensing shrink, more of a cognitive therapist). Her husband may or may not be diddling his secretary (he isn't of course, because he's boring).

She gets involved in her patients' lives in weird, inappropriate ways. She's a nutcase in short, you know, this is a "psychological thriller." Anyway, I don't know where this show is going, it's ten episodes long ... again, I would probably instantly drop it if it weren't for Naomi Watts, who is just *so good* (remember Mulholland Drive? Yes, Naomi Watts did that breakdown scene at the end, where you realize it's all a dream, which still sends shivers down my spine just thinking about it).

Look into my eyes.... 

Look into my eyes.... 

In episode two we learn that Naomi drives a Volvo SUV, masturbates, and can't pronounce "Rorschach," which makes me wonder about her psychoanalytic capabilities. She gets closer to the girl who has such power over one of her customers, er, clients. This is some kind of feminine power play thing I'm not terribly interested in... paid attention to the credits this time to learn that the show was "created and written by Lisa Rubin." Uh oh, a C.W. By thing. I'm not sure if I can keep my interest up for this ... I may be too much of a manly man to deal with this bullshit for much longer. 

Red filter, again

Red filter, again

In episode three we learn that they live in Fairfield county, CT, not downstate NY. Naomi pops some pills she stole from one of her Stepford wife (Soulcycle wife?) "friends," and plans a brilliant birthday party for her kid. But she has a blow-up with the same Stepford wife at the party, very embarrassing. Will lead to permanent ostracism, but Naomi sort of wants that. And there's Blythe Danner, playing Naomi's mother ... she's now the go-to actress for evil WASP moms in their 70s.

This show will appeal to women and homosexual men, but not so much straight guys. Beautiful bored Gen-X women, popping pills in posh suburbs, pursuing lesbian relationships with someone half their age, pining for their lost youth or looking for some excitement in middle age ... I'm not sure how interesting this really is. But Naomi Watts *is* very attractive and talented so I will soldier on.

Hubby still fit despite the chins

Hubby still fit despite the chins

On to episode four, I really don't know what's going on. Nice to see a Zippo lighter being given as a gift, and I was wrong about Naomi driving a Volvo; it's an Infiniti QX60. Oddly they obscured the front badge of it, I guess there are no freebies in Product Placement Land. The hot black (light black) secretary is starting to make a move on boring old married-to-Naomi guy... will he crack?  We also learn that Naomi has a degree from Johns Hopkins. Her weird meddling in her patients' lives seems less sinister in this episode ... it's more like unconventional problem solving now. Anyway, will I be able to get through eight or ten of these episodes?? Not sure.

Drawn in then kicked to the curb, but who will be doing the kicking?

Drawn in then kicked to the curb, but who will be doing the kicking?

On to episode five ... ok, this is basically a midlife crisis story, but instead of a middle-aged married man having a fling with a younger model, it's a middle-aged married woman having a fling with a younger model. Naomi sneaks off again and has dinner at this hippie-dippie commune place (where I wondered who's paying for the wine?) ... she decides there and then to go all-in on the young lass from Sussex. Hubby left at home with idiot football buddies and a sad bag of ancient weed. There was a really good shot of the Infiniti QX60's grille with the brand obscured ... nearly looked like a Chinese Chery!

Splitsville ... I mean personality

Splitsville ... I mean personality

Boring hubby tries to rekindle things with Naomi via a night of hot sex in a swank hotel in episode six. All I could think during the sex scene was, "don't pinch your fingers in the door! don't pinch your fingers in the door!" And of course since both these actors are approaching 50 years old, the scene was totally unrealistic.

Boring hubby is going to Texas for two nights (with hot secretary, so maybe he'll crack there), which gives Naomi a chance to plan something big with the lass from Sussex. Oh, I almost forgot, but the episode ends with Naomi having a panic attack. Blurred vision, rapid breathing, fear of death, the whole thing -- not fun. 

Naughty, naughty and twenty plus years her junior

Naughty, naughty and twenty plus years her junior

Episode seven ... I *loved* this episode, great, great stuff, and not least because of the music. Booze, pot, Blue Is The Warmest Color style sex, infidelity ... it just captured the mood and feelings really well, the pacing was great, I thought. Spoiler: Boring hubby did not crack and give in to the offer from his beautiful black secretary, which was truly dumb, er, heroic behavior. As I said, after the hippie dippie dinner, Naomi *knew* she was going to hook up with the lass from Sussex, there was no stopping her, no second thoughts.

Why they had the black secretary coming out of the other lawyer's room at the end of the episode, I don't know, I thought it was unnecessary, it just makes her out as a slut, which she isn't really, or wasn't ... it makes boring hubby's decision look like the obvious one in hindsight, and it shouldn't be ... he should be second guessing himself about that one into the grave.

Naomi should know that the pot the kids smoke today is nothing like the stuff from our youth (Louis CK has a very funny bit about this). 

Poor bastard looks tortured, doesn't he?

Poor bastard looks tortured, doesn't he?

Episode eight ... I waited quite a while after episode seven before watching it, since I didn't want to ruin the high of that episode ... and now I can't remember what happened, other than boring lawyer Dad's name is mud at the firm, everybody thinks he slept with his secretary even though he didn't. Also we learn that Naomi keeps an apartment in the City under her maiden name (Hart) and her alias "Diane." Her husband doesn't know about this place. Naomi lets her druggie girl patient stay there (see below). The druggie girl repays the favor by digging through all of Naomi's locked-up stuff and discovering some of her many secrets.

Good bones but strung out

Good bones but strung out

Episode nine ... The lass from Sussex posted the surreptitiously snapped photo of her kiss with Naomi on Instagram ... this news oddly doesn't freak out Naomi ... she knows Sam has a gun, but apparently isn't that worried that he'll go nuts ... Blythe Danner does a beautiful job playing WASP Mommy Dearest and reveals that it is she who pays for the upper west side apartment, and that Naomi never went to Stanford, while sticking the knife in in multiple other ways during their pleasant family meal. Writer Rubin no doubt sees WASP family life as incredibly tortured and twisted, which it is only some of the time; I can report from experience.

Weird scene with Boring Lawyer Dad and his beautiful secretary (see below)  ... "I care about you but nothing's gonna happen," what's that all about? Naomi is popping pills trying to hold everything together. The school shrink thinks their kid should be put on Ritalin or something (more Mercedes payments for him!), but Naomi, a PhD psychotherapist, isn't so quick to accept the prescription. The lass from Sussex takes the train out to Darien (we've narrowed it down to the town in Fairfield county now) to pout in Naomi's Infiniti QX60 with obscured badge ... a "Mom car." Next episode is the final episode ... no way they can wrap this all up, must have been angling for a multi-season deal from the start.

Not going to fall in love with her, he repeats to himself while beating off in the shower

Not going to fall in love with her, he repeats to himself while beating off in the shower

Episode 10, final episode of the season ... I've decided that Gypsy belongs in the "Slick but Dumb" file ... the production values are great, the acting is decent, wardrobe, make-up, lighting, sets -- all the technical details -- are very good but the story itself is DUMB or worse, BORING. 

Beautiful Naomi may be leading a sort of double life, and messing with her psychotherapy patients in weird ways, but who really cares? Episode seven was good, but one episode does not make a great season, and I certainly won't be watching the next one. 

I felt pretty weepy myself by episode ten, crying for the lost time

I felt pretty weepy myself by episode ten, crying for the lost time

Everything I Ate in July 2017

Added on by C. Maoxian.

This is another one of my nutter posts, but I don't think I've ever recorded everything I ate for an entire month. Let's see if I can do a full 31 days.

Friday, July 7

  • Egg, one, boiled, white only
  • Eggs, two, scrambled in one-half teaspoon of butter
  • Bread, one slice, farmstyle (Wegmans), toasted
  • Yam, baked, 75 grams
  • Yoghurt, 4 ounces, Noosa brand, salted caramel flavor
  • Amazing Grass, immunity, one glass
  • Prunes, three, Sunsweet brand, pitted
  • Bread, one slice, farmstyle (Wegmans), toasted, with garden strawberry jam (D'arbo brand)
  • Sausage, breakfast (Larry's), patty, 5 ounces cooked
  • Bread, one slice, farmstyle (Wegmans)
  • Broccoli, large bowl
  • Cookies, Pepperidge Farm Milano brand, double chocolate, five
  • Milk, small glass, Fairlife brand
  • Tacos, homemade, three
  • Marzipan, Milk Chocolate Covered, four squares, Niederegger Lubeck brand
  • Whisky, quite a few sips, Nikka Coffey Grain
  • Muffins, poppy seed, homemade, two

Thursday, July 6

Wednesday, July 5

  • Eggs, two, boiled, whites only
  • Oatmeal, one-third cup, steel cut, Quaker brand
  • Maple syrup, two tablespoons
  • Amazing Grass, immunity, one glass
  • Prunes, three, Sunsweet brand, bite size pitted
  • Strawberries and cherries, one bowl
  • Chicken, drumstick
  • Pork, small slab
  • Bread, one slice, rosemary olive oil (Wegmans), toasted
  • Salad -- greens, tomatoes, cucumber, carrots, avocado, olives, pesto, dressing (Briannas brand)
  • Soda, six ounces, IBC root beer
  • Yoghurt, 4 ounces, Noosa brand, blood orange flavor
  • Popcorn, large bowl, oil popped
  • Yam, baked, 70 grams
  • Creamsicle cooler (raspberry sherbet with vanilla ice cream), small, King Ferry
  • Ice cream, one-half kid's vanilla cone
  • Shrimp
  • Rice
  • Spinach
  • Chicken, drumstick
  • Watermelon, two slices
  • Whisky, quite a few sips, Nikka Coffey Grain
  • Eggs, two, boiled, whites only
  • Marzipan, Milk Chocolate Covered, one square, Niederegger Lubeck brand
  • Seaweed snack, three packs
  • Candy, at least 10, Ricola Honey Herb drops

Tuesday, July 4

  • Oatmeal, one-third cup, steel cut, Quaker brand
  • Maple syrup, two tablespoons
  • Amazing Grass, immunity, one glass
  • Yoghurt, 4 ounces, Noosa brand, blood orange flavor
  • Eggs, two, boiled, whites only
  • Submarine sandwich, six inch, Subway brand, chicken bacon ranch
  • McNugget, one
  • Dorito, one, nacho flavor
  • Beer, 12 ounce bottle, Ommegang brand, Rare Vos Amber Ale, three
  • Beer, 12 ounce can, Founder's brand, All Day IPA, one
  • Funyuns, two and three eighths ounce bag
  • Rhubarb pie, one large slice
  • Soda, one half can, Dr. Pepper
  • Oreo ball (mint flavor)
  • Eggs, four, deviled
  • Chicken, drumstick
  • Potato salad
  • Ice cream, one bowl, Jeni's brand, Middle West Whiskey and Pecans
  • Eggs, two, boiled, whites only

Monday, July 3

  • Eggs, two, scrambled in one-half teaspoon of butter
  • Bread, one slice, rosemary olive oil (Wegmans), toasted
  • Amazing Grass, immunity, one glass
  • Eggs, two, boiled, whites only
  • Yoghurt, 4 ounces, Noosa brand, lemon flavor
  • Prunes, six, Sunsweet brand, bite size pitted
  • Yam, baked, 70 grams
  • Beef, 3 ounces cooked, tenderloin, fried in one teaspoon of butter
  • Salad -- greens, tomatoes, cucumber, carrots, avocado, olives, pesto, dressing (Briannas brand)
  • Hi-chew, one piece, mango flavor
  • Milk shake, small, banana flavor, (King Ferry)
  • Carrots, one
  • Hummus, two tablespoons, Ithaca brand, lemon & garlic
  • Sausage, sweet Italian (Larry's), patty, 7 ounces cooked
  • Bread, one slice, farmstyle (Wegmans), toasted
  • Ice cream, 140 grams, Jeni's brand, Goat Cheese with Red Cherries
  • Couscous, one-quarter cup
  • Ham steak, 6 ounces cooked, Larry's
  • Green beans
  • Candy, at least 10, Ricola Honey Herb drops
  • Pistachios, at least fifty, unsalted
  • Caramel, one, Béquet brand, celtic sea salt
  • Eggs, two, boiled, whites only
  • Chex Mix, handful, Savory Traditional
  • Ramen, one packet, Nissin brand, Oriental flavor

Sunday, July 2

  • Eggs, two, scrambled in one-half teaspoon of butter
  • Bread, one slice, rosemary olive oil (Wegmans), toasted
  • Amazing Grass, immunity, one glass
  • Eggs, two, boiled, whites only
  • Sausage, sweet Italian (Larry's), patty, 7 ounces cooked
  • Bread, one slice, farmstyle (Wegmans), toasted
  • Carrots, one
  • Hummus, two tablespoons, Ithaca brand, lemon & garlic
  • Yoghurt, 4 ounces, Noosa brand, lemon flavor
  • Eggs, two, boiled, whites only
  • Prunes, six, Sunsweet brand, bite size pitted
  • Yam, baked, 75 grams
  • Beef pho (homemade
  • Brussels sprouts
  • Strawberry, one
  • Ice cream, 100 grams, Jeni's brand, Goat Cheese with Red Cherries
  • Whisky, a few sips, Nikka Coffey Grain
  • Candy, at least 20, Ricola Honey Herb drops

Saturday, July 1

  • Eggs, two, scrambled in one-half teaspoon of butter
  • Bread, one slice, rosemary olive oil (Wegmans), toasted
  • Amazing Grass, immunity, one glass
  • Sausage, sweet Italian (Larry's), patty, 3 ounces cooked
  • Bread, one slice, farmstyle (Wegmans), toasted
  • Carrots, baby, 88 grams
  • Hummus, two tablespoons, Ithaca brand, lemon & garlic
  • Eggs, two, boiled, whites only
  • Seaweed snack, three packs
  • Cherries, 95 grams (with pits)
  • Eggs, two, boiled, whites only
  • Salad -- greens, tomatoes, cucumber, carrots, avocado, olives, pesto, dressing (Briannas brand)
  • Chicken, breasts, fried in one teaspoon butter, 9 ounces cooked
  • Honey hot sauce, three tablespoons, Sweet Baby Ray's brand
  • Grapes and cherries, one bowl
  • Hi-chew, one piece, melon flavor
  • Pistachios, at least a hundred, unsalted
  • Strawberry, one

Dirty Dozen, Long Only Portfolio, End of June 2017

Added on by C. Maoxian.

One change to the Dirty Dozen portfolio, selling Chipotle (CMG) on July 3rd.  Amgen, Gilead, and Twitter remain on the sidelines for now. Starbucks, which was bought on June 1, isn't looking particularly well, but we will have to wait another month before deciding whether it should be sold.

Changes in 2017 include selling Twitter in January, while getting long Chipotle and Tesla in February, Facebook in April, and Starbucks in June. The Chipotle sale in July, after five months of holding, will more or less be a "scratch" ... no loss, no gain.  

TV Shows Watched -- Sense8

Added on by C. Maoxian.

My buddy Theo recommended this one to me.  A Netflix Original series. Whoever did the opening credit music also did the House of Cards opening credit music, more or less exactly the same song, maybe a two-for-one deal for Netflix.

This is by the Wachowski brothers, you know, the Matrix guys. It's a similarly mend-bending alternate reality, parallel reality, time twister, whatever kind of deal. Features eight! different people on eight different continents (I know, I know) who all share this bond with Darryl Hannah, their "birth mother" of sorts. I love D. Hannah because she's exactly my age (ok, ten years older) and still looks great, though she doesn't have much screen time here.

The show is intriguing enough to watch another episode, though I have a sinking feeling.

Blonde lady from The Ring

Blonde lady from The Ring

OK, the eight guys on eight continents thing is a little overwhelming. Why didn't the Wachomatrix brothers make it six or even four? There's a black character and an Asian character and a transgender character and a gay Latin lover character (talk about Sesame Street), but all the gay sex doesn't grate too badly ... it's the gratuitous violence I can do without. I will soldier on to episode three.

Great package (stuck a sock in it)

Great package (stuck a sock in it)

One of the characters is a Korean woman who is corporate chieftain by day (her Dad's company) and cage fighter by night. Somehow the eight linked characters can zap around the globe taking one another's places. Another character is in Kenya? maybe and the Korean girl takes his place in a fight. Time space flipperoo just when you need it. Not sure how many more of these episodes I can get through, but season one ain't 22 shows long at least! To be continued...

Nice sheen of sweat but she ain't ripped

Nice sheen of sweat but she ain't ripped

Driving for Uber

Added on by C. Maoxian.

Uber will be legal in my neck of Appalachia starting at midnight tonight. I've applied to be an Uber driver and am still waiting for the text or email that tells me I'm approved to drive. I have already submitted the scary driver profile pic and am anxious to go! 

I'm still waiting.... 

I'm still waiting.... 

All clear.... 

All clear.... 

The Cost of a Cardiac MRI

Added on by C. Maoxian.

Earlier this year I had a cardiac MRI. You slide down the MRI tube and they inject gadolinium through a vein in your left hand. There's a cold sensation that runs the length of the left side of your body, which is fine until it reaches your head (brain). You sort of want to cry out, but you also don't want to be a wimp about it, and it passes. 

Here's the bill: $7,056. I always think about medical bills in terms of Mercedes payments. You can see that my cardiologist pays about $2,846 a month for his S600, so the cost of the cardiac MRI will make almost exactly two and a half car payments for him. Guess who doesn't want a Single Payer healthcare system in America? 

Notes for Chat with Traders, Episode 107

Added on by C. Maoxian.

Episode 107 ... Anthony Saliba (110:14)

  • Options in China as the last frontier
  • 120MM retail investors in China
  • Jan 1998, last day of floor trading in Australia
  • Lives in Milan but has house in Chicago
  • Helped exchanges around the world make switch from open outcry to screen-based trading
  • Only ASX gave Saliba's company credit for successful transition
  • Believes options are a great product
  • Was a stockbroker right out of college, 21 years old, in Indianapolis
  • Era of Jimmy Carter, Stagflation
  • Read a lot about options
  • Closing prices came in the newspaper the next day
  • Clients did call and ask where prices closed
  • Bally was the hot stock of the day
  • Client invited him to trade on floor in Chicago (CBOE)
  • Guy he caddied for also worked on CBOE
  • Partnered with guy he caddied for, made half a million dollars by 1981, bought him out
  • Had a mainframe available that he could plug into for theoretical values
  • Teledyne another hot stock of the day (IBM, Honeywell, Hewlett-Packard)
  • He would trade bigger than peers because he'd use spreads
  • Personal computer became a thing in 1984, hired a programmer to write software
  • On the CBOE floor for 13 years
  • Glossed over almost busting out early on
  • Started out with $50,000 dropped quickly to $15,000 over five weeks
  • Filled with loathing and despair
  • Started out with someone else's money, "Julian Good"
  • Switched from Teledyne to Boeing, trading one lots
  • Goal of making $200-$300 a day
  • Wrestler and cross country runner in high school, so he's disciplined
  • Went back to Teledyne pit but using his Boeing pit discipline
  • Made six figures a month or more
  • Punting is anathema to him, just chip away day after day instead
  • Realized trading not as easy as he thought, lots of introspection
  • Son of a carpenter
  • When you get hurt (lose money), trade smaller and chip away 
  • Still trading Teledyne in 1984
  • Short squeeze in Teledyne, rallied 50 points, Saliba got scared by this
  • Leon Cooperman the Teledyne analyst at Goldman Sachs in 1984
  • Teledyne eventually hit $320 a share in three months
  • Tried to trade currency options like he did equity options, got killed
  • Sep. 1985 move in Yen (4-5% rally), he got his ass kicked
  • Had Quotrek machine by his bed
  • No respite when you trade currencies
  • Lost $2MM in two years trading currency options
  • He likes to give back, loved the CBOE, did marketing trips to regional brokerage offices
  • Edmund Andrews wanted to write story about an options market maker
  • By chance, Andrews happened to be in Chicago day after 1987 crash
  • Andrews followed Saliba around on Oct. 20, 1987 (day after crash) ... Saliba was age 32 then
  • Andrews' story on cover of Success magazine, January 1988 [I will look for this in library]
  • CBOE didn't like it, market makers supposed to be low profile
  • Looking in pictures like the cat that had eaten the canary (this was frowned upon)
  • Lot of people on the floor who never knew what they were doing
  • He saw the structure of the market differently from others
  • Some were slaves to the Greeks: delta, gamma, vega
  • Others were trading directionally using technical analysis
  • Saliba tried to create low-cost spreads with easy-to-understand risks
  • Left floor in 1991
  • Not a quant guy
  • Not good at math in school
  • But he's very disciplined ... later on used a lot of automation
  • "Necessity is the mother of invention" 
  • Youngest brother works for Goldman Sachs (in options)
  • "Staying spread is staying alive"
  • In 1988 tried to train a group of traders, frustrating, wanted to automate it
  • Spent money on programmers to build simulator, cost more than he expected, had to figure out how to sell it to others 
  • Germany was on Unix using Sun systems
  • Saliba arrived in Frankfurt (Deutsche Bank) 1989, trained them all
  • Charles Cottle "The Risk Doctor" his partner in this venture
  • Mentions Shelly Natenberg book
  • Teaching the mechanics of options making, better risk management
  • Had no Holy Grail that he was exposing by teaching others
  • Traits of a good trader:
  1. Discipline (stick to a plan),
  2. Creativity (coming up with a plan),
  3. Humility (willing to scrap a plan),
  4. Good sense of humor (can't take it too seriously when you miss things),
  5. Intelligence,
  6. Diligence
  • "Swivel chairing" -- one platform for idea generation, one for trade execution
  • Markets are less forgiving today than when he started out
  • Discipine: sticking to risk and size guidelines, sticking to the plan
  • Can't determine why you make or lose money if you don't stick to plan
  • Why did pros he know miss the Trump win that night? It was a shock, Saliba was scared too, not sure correction overblown
  • Night of Brexit, Saliba identified it as hand-wringing and should be bought
  • He has always adapted, hates the term "re-inventing" oneself
  • Has developed and sold a lot of software products that solve problems 
  • Wife says he has too many ideas
  • Kissed a lot of frogs on the way to the princess (talking about investments, not his wife)
  • Has lots of very diverse investments now (golf courses, insurance, healthcare, etc.)
  • Nephew and brother have found a lot of deals for him
  • He was born poor (but in America, not in a global sense), father lived hand to mouth, had seven kids
  • Upbringing helped him respect the value of things
  • Don't be a curmudgeonly scrooge type, but you have to stay grounded when you make big money
  • He wouldn't have been as driven as he was without being born poor
  • His own kids are entitled, don't have his drive or hunger
  • "Success skips a generation"
  • Millennials don't have the hunger, they ask "what does the world owe me?"
  • Saliba is gracious, humble, honest ... and says some nice things to Aaron in parting

Cost of Homemade Rice Krispies Treats

Added on by C. Maoxian.

The kids were interested in the price difference between store-bought Rice Krispies Treats and homemade ones. OK, their father was interested in the price difference and got the kids involved.

First we bought a 40-bar box of Rice Krispies Treats for $7.49. We've never done this before; it was purchased strictly to find out how much each individually wrapped bar weighs, and the answer is around 21 grams, so that's 420 grams for $7.49 or $0.01783 per gram ... a little under two cents per gram.

If you eat enough of these, you'll look like the guy on the box

If you eat enough of these, you'll look like the guy on the box

Next we bought a four-stick package of President butter for $5.99, or about $1.50 a stick. The recipe calls for three tablespoons of butter, which is 3/7 of a stick or $0.64 worth of butter.

We bought four sticks in a box (no picture available)

We bought four sticks in a box (no picture available)

Then we bought a 10 ounce package of Jet-Puffed Miniature Marshmallows for $1.69. The recipe calls for one whole package.

The glue than binds

The glue than binds

Lastly we bought an 18 ounce box of Rice Krispies for $3.69. There are around 18.75 cups of Rice Krispies in an 18 ounce box and we can round down to 18 given the spillage that occurs when the kids make Rice Krispies Treats.

Kellogg's, baby ... no store brands allowed! 

Kellogg's, baby ... no store brands allowed! 

So the total cost per batch was $0.64 (butter) + $1.69 (marshmallows) + $1.23 (cereal) = $3.56. The yield of our first homemade batch was 431 grams, giving a per gram cost of $0.00825 ... it would be even lower if not for the spillage allowance.

The bottom line is the store-bought Rice Krispies Treats cost more than twice as much as homemade ones. 

I will update the post with the yield that we get from future homemade batches to see how much variance there is batch to batch. 

UPDATE: the second batch we made was 460 grams, giving an even lower per gram cost of $0.007391! 

TV Shows Watched -- Quantico

Added on by C. Maoxian.

On Netflix. Another form of War Porn ... glorifying the security state and its agents (this time, the FBI). Fomenting fear in the little guy about threats from radical Islamic crazies, which are low probability to nonexistent in reality, but we have a military/security-industrial complex to maintain, and the entertainment-industrial complex is happy to lend a hand.

I probably wouldn't have made it through the first episode, but it stars this stunningly beautiful Indian girl ("subcontinent not Injun," as my friend Carl likes to say) named Priyanka Chopra, and I just like looking at her. She's not good looking from every angle, so they're careful how they shoot her, and she looks kind of dumpy/hippy from behind so they're careful not to get that shot too much, but she has great boobs or wears some kind of shapely push-up bra which makes her chest look outstanding.

The rest of the cast is really white ... there is one token black woman, who is the assistant director of Quantico, but that's it. The story itself is far-fetched and frankly dumb ... it's got mainstream, middle-brow, middle America broadcast TV values, second rate acting, a crummy musical score, all of which grate, but as I said, Chopra is just too gorgeous -- that hair, those eyes, those lips -- *not* to watch. 

It's 42 minutes an episode so clearly "made for commercial TV."  I'll suffer through the second episode and continue my report below. 

Sexy FBI profiler unwittingly screws an unshaven fellow agent in a rental car (why would his car from California be at the airport? One of many sloppy mistakes.)

Sexy FBI profiler unwittingly screws an unshaven fellow agent in a rental car (why would his car from California be at the airport? One of many sloppy mistakes.)

In episode two a token Hispanic agent (female) is introduced as well as a token homosexual analyst, to round out the Sesame Street cast. In episode one we learned that one of the agent recruits is pretending to be gay, and now he has to deal with an actual gay guy around (awkward).

There's some unrealistic violence, a fistfight between Chopra and the Hispanic woman agent (Latina? is that the politically correct term?) -- annoying. Musical score continues to drive me nuts. I'd like to soldier on but season one has 22! episodes ... I really don't know how many I can get through. 

Chopra doesn't look so great in profile, but I may have misjudged her ass in episode one, so I will continue to study it in episode three. She has a great, sexy low voice and is not a native English speaker, fluent of course, just with a lovely non-native accent.  It's nice to see this beautiful foreign woman, speaking accented English, starring in a TV show aimed at middle America. 

All units be on the lookout for a stunningly beautiful Indian girl with amazing hair, full flips, and FBI training

All units be on the lookout for a stunningly beautiful Indian girl with amazing hair, full flips, and FBI training

Quit after finishing episode three. Dumb, improbable story ... second-rate broadcast TV vibe, and I got tired of looking at Chopra ... and the musical cues were driving me nuts! 

Exactly how I felt by the end of the third episode. Time to quit Quantico! 

Exactly how I felt by the end of the third episode. Time to quit Quantico! 

Notes for Chat with Traders, Episode 108

Added on by C. Maoxian.

Episode 108 ... John Netto (55:25)

  • Placed first sports bet at age 8
  • He lost the first bets he placed but didn't discourage him
  • Doesn't bet on sports anymore
  • Father conservative, imparted importance of saving and investing
  • Remembers the 1987 crash, he was 13 then, age 42 now
  • Oliver Stone's movie Wall Street made strong impression on him
  • Stone didn't realize he was turning kids onto the market instead of off
  • He wasn't a bookie, he was a liquidity provider (in high school) [has a sense of humor]
  • "The Netto Number" -- redefining alpha [they didn't explore this idea]
  • Claims creating "Progressive Points Spread," not a binary outcome on sports betting
  • Poor grades in school but worked hard on his bookie business
  • Grew up in East Bay Area, Interstate 80
  • Recorded Stardust casino opening odds delivered via radio
  • Dec 1992 graduated high school and joined the Marines, 18 yo 
  • Classic underachiever, poor grades, low self esteem in high school, so Marines transformed him
  • First assignment in Japan, in two years
  • Learned Japanese language, passionate about it, 1994 (no Google translate)
  • Assigned to Tokyo (embassy detail?), continued to study Japanese, two more years 
  • Came back to US in 1998
  • Opened eTrade account
  • Studied Chinese at Univ. of Washington
  • Wouldn't say he's "fluent" in Japanese (smart to say that), it was just "effortless"
  • 2200 hours to become "professionally competent" in Level 4 language (like Arabic, Chinese, Japanese)
  • Had horrific sense of timing in the markets at first
  • He had no process then, just impulsive
  • Thought he should just do the opposite of what he naturally did 
  • Truth is that throwing darts at the wall with good money management, you'll do ok
  • But held his losers, cut his profits short
  • Left Marines in 2002, joined prop trading group
  • Joe DiNapoli's book really helped him
  • Still uses DiNapoli's Fibonacci ideas
  • Managing risk not a problem for someone with Marine-like discipline once he had a process
  • Trades futures markets and options
  • Uses eight monitors
  • "Protean" trader ... highly adaptable
  • Developed multiple strategies: mean reversion, relative value, momentum, trend following, breakout systems -- uses all of these
  • Key is knowing which strategies to apply to current market environment
  • "Global Macro Edge" -- name of his book
  • He's a fast talker
  • Three keys to be successful trader: operations, analytics, execution
  • (He has a lot of set-phrases memorized, clear military training)
  • Hired programmers to automate things, on a contract basis
  • His wife helps him organize things [she must be an angel]
  • Hires people based on word of mouth
  • Wants people certified on certain APIs
  • "Prow-ess"
  • When to lever things up and lever things down -- that's what it's all about
  • "Market Regimes" -- technical, fundamental, sentiment
  • Spends a lot of money on bespoke research (~$80K a year)
  • Makes $500-600K a year trading [on how much capital? Netto says $1MM in capital]
  • Spends $26,000 a year on his Bloomberg Terminal
  • Uses CQG as well
  • Great asymmetrical trades (paying 5 to 1) come with a great deal of discomfort
  • Wrote a 580 page book, self-published? (yes, self-published
  • Low volatility for years now ... have to adapt to that
  • Make your lack of capital your biggest strength, small positions can be an advantage
  • Trades from home in Las Vegas
  • Has patents on his process, but won't talk about it
  • Global Macro guys can be brilliant but don't know how to manage risk
  • Importance of getting out of your comfort zone
  • Want to be a little bit afraid in a trade
  • Be aware of your emotions, feelings, instincts
  • Does daily "Qualitative Self-Assessment" -- preparation, focus, routine
  • Journal everything constantly
  • Be in tune with yourself
  • You need to be uncomfortable to hold your winners
  • You need to feel the nnnngggggg, but power through it [I know what he means]
  • Overconfidence > complacency > mistakes > losses
  • Respect the market
  • Embrace your losses
  • If you're not losing money, you're not taking the risk necessary to succeed
  • Separate discomfort from fear, confidence from complacency
  • Boy he talks fast, sort of an interesting rapid-fire military cadence throughout  
  • Twitter: @JohnNetto