I have been trying to go on a diet  for awhile and invariable find myself in a situation where I get invited to go out for dinner. There is absolutely no way to win in the scenario where you don't want to eat but yet you are obligated to be social. I find that this is one of the most awkward circumstances to negotiate without looking like a complete jerk. Let me briefly explain.

First off for some unexplained reason people are offended if they don't eat together and even more bizarre at the same time.  Second your helping has to be comparable in size so if you just eat a small salad or soup and finish before everyone else it is considered rude. You will find yourself sitting and watching everyone eat trying not to talk so much why people get upset when you ask them a question when they have food in their mouth. Even if you order a regular sized portion and decide not to eat it then everybody really gets offended about how wasteful you are being. 

Second everyone assumes that you are cheap if you don't order a main course.  You get treated like you are trying to skip out on the bill or something. I once went out to dinner with a bunch of guys at a nice restaurant in New York City. I was not feeling that great after a few drinks so I ordered a lobster bisque soup. Everyone else ordered brontosaurus sized steaks. In the end they decided to split the bill and stiffed me for $80. The most expensive soup I ever had.

Third the waiter gets all offended because he thinks his tip will be smaller.  I barely can get the waiter to pay attention to me if I don't order a normal sized meal.

There is just no way to win if you are not hungry and you are expected to go out. My advise is to play sick and stay home.

Tags: etiquette, dining, hunger, awkward

Why is it that almost every car commercial features a vehicle skidding or hydroplaning out of control? Isn't this an undesirable feature of a car? I don't know about you but I don't want my car sliding off the side of the road in the rain or skidding donuts into a parking spot. Perhaps all the car commercial makers are all Dukes of Hazard fans.

Tags: car, hydroplaning, commercial

For 5 years, I commuted over 120 miles to work every day on the I-95 in South Florida. I saw everything from refrigerators, couches, wheel chairs, and laundry machines lying in the middle of the highway. I am not exactly sure how this debris even makes its way off or to the side of the road. Nobody makes any effort around here to report these hazards or to even slow down traffic. They swerve as fast as possible at the last possible moment and jus keep on driving (so as to not tip off any trailing drivers of the danger that lurks ahead.) The thing that fascinates me the most about South Florida driver’s is their inability to understand the basic principles of aerodynamics namely - drag and lift.

I can’t even begin to count the number of times I have seen people driving with mattresses on the roof of their car. Is there some kind of underground business  that generates money transporting mattresses on the highway that I am unaware of? Why isn’t there a rule or law that prohibits the transportation of mattress in anything other than a truck? Don’t mattress vendors pickup your old mattress when you buy a new one for free?

A mattress is like a poorly designed airplane wing. When attached to the top of your car only two things can happen either the mattress or the roof of your car is going to fly away. Based on preliminary calculations the car below could actually get airborne at speeds over 85 miles an hour.

I have even seen people driving with one hand on the steering wheel and the other hand holding down the mattress through the driver’s side window.  This demonstrates zero understanding of physics and extremely dangerous behavior. If you don't understand how dangerous it is to drive with a mattress afixed to the roof of your car search google or read the following articles. 

Fallen Mattress Leads to Accident
http://findarticles.com/p/articles/mi_qn4179/is_20030818/ai_n11801671

Mattress Causes Road Accident
http://mattresszine.com/mattress-news/mattress-causes-road-accident/

Tags: highway, mattress, flying, hazard

I often wonder how is it that human factors engineers never considered standardizing the buttons within an elevator. An elevator is one of the most used transport mechanism next to an escalator in the world.

In the United States...
-There are an estimated 700,000 elevators and 35,000 escalators.
-Over 325 million riders take an elevator daily.
-Over 245 million riders take an escalator daily
-About 210 billion riders travel on elevators or escalators each year in the North America.
*Source: National Elevator Industry, Inc. Website (March 2007)

Yet, every elevator has a unique and often confusing way to display the buttons within the control panel.  I wonder if the Elevator Escalator Safety Foundation has ever looked into this? (Yes this organization actually exist.)

Is it some sick twisted joke to increase the anxiety and fear of individuals like my wife who already have Clautophobia or Claustrophobia? Try finding the "open door" button in a last second scramble when somebody starts running toward the elevator to join you. This happened to me the other day and I truly could not find the button in time. Now I am embarrassed every time I run into that person. He probably thinks I faked the effort so I could continue on my way without delay. (Not to say that I have not done this in the past.) To illustrate my point and the "Elevator Button Chaos Theory" I have included  some real-life examples of button arrangements I have found:

This elevator must go sideways? Oh and look there is a special button for handicap riders. I wonder what that does?

Just incase you can't read the numbers on the button this elevator has a great labelling system. I wonder how many people push the black label instead of the button every day?

 

At least some elevator engineers have figured out that if you put the label on the side you can conserve vertical space. By the way what does the "Star" next to the first floor indicate? Did you notice that it was on the third floor in the first picture? My guess is that it indicates the ground level or the floor where most of the action occurs. I am not sure but I have seen this indicated in the past by the G, L, M, or LL buttons. Anyways I think by now you are ready for the ultimate elevator button test. Look at the next elevator control panel below and answer the following questions as fast as you can. (Hint: this elevator has two doors one in the front and one in the rear.)

1. What button do you push to get to the first floor?
2. How many floors are there on this elevator?
3. What does "L" stand for?
4. What does "P" stand for?
5. Where is button "4"?
6. Which button opens the door?
7. What is the difference between the alarm and the help button?
8. How many people try to cancel a cell phone call by pushing the "Call Cancel" button?

Elevator Button Chaos Theory states that when designing a control panel for elevators never take into consideration what other engineers have done in the past. In this way, the human race can always evolve the elevator button console into something different but not significantly better in the future.

Tags: elevator, chaos, standards, engineering

Tags: Knowledge, Seat Belt, Instructions, Tip

My wife and I have been considering buying property now that the housing market appears to be bottoming out (at least in Miami).  We have been struggling for a long time on the decision whether or not to continue renting. I have done the math on both sides of the equation and have used over a half dozen "rent vs buy" calculators available on the web.  As expected, based on my preliminary calculations, the result is tightly coupled with the model assumptions regarding "Home Appreciation Rate" and "Number of Years Expected at Property". If you are interested in performing these calculations for yourself a good example can be found at the following link Rent vs. Buy Home Finance Calculator .

I am amazed at how polarized people are on this topic as it sparks the same kind of emotion surrounding discussions about abortion, politics, or religion. An interesting debate to illustration my point can be found at the following two websites.

• Rent Vs. Buy Myths That Ruined the Housing Market
• The Nonsense of “Rent Vs. Buy Myths That Ruined the Housing Market 

After doing months of research and exploration into this topic I have developed a Theory which I call "The Three Fives" or 555 theory.  The 555 theory is purely based on mathematics and does not take into consideration personal preferences or obligations.  The following assumptions were made in the development of the 555 theory. The 555 theory assumes that the monthly mortgage payments are equal to or less than 30% of your combined monthly income. The 555 theory assumes no association fees and an average monthly maintenance cost of less than $300 a month.

If any one of the rules listed below evaluate to false than consider seeking financial consulting from a trained professional before making a decision to rent or buy property.

1. First Five - If you are going to live in a location greater than 5 years consider buying.
2. Second Five - If you can acquire a loan with an annual percentage rate of 5.x or less consider buying.
3. Third Five - If the difference between the Minimum Annual Expected Appreciation Rate of the House and the Current Inflation Rate (www.inflationdata.com) is greater than 5% then consider buying.

Additional Rent Biased Information

Wall Street Journal: Your Home Isn’t the Nest Egg That You May Think It Is
New York Times: A Word of Advice During a Housing Slump: Rent
New York Times: Is it better to buy or rent? (graphical calculator)
The Motley Fool: The Worst Investment Ever
SmartMoney.com: Renting Makes More Financial Sense Than Homeownership
CNN Money: Stocks vs. Real Estate
Priced Out Forever: Renting vs. Purchasing

Additional Buy Biased Information

ABCNews.com: Five Ways to Get a Good Deal on a Home

Tags: Renting, Investments, Buying, Home Owner

This one of my favorite investment strategies. The box position was historically used to delay taxable events. I have discovered an alternate use for this position to realize huge gains if used in conjunction with trailing stops when a significant change in the stock price is expected (i.e. quatrerly earnings reports, result of a legal case). Before I get into my trading strategy lets take a closer look at the definition and prior use of this technique.

Definition

The act of short selling securities that you already own. This results in a neutral position where your gains in a stock are equal to the losses. For example, if you own 100 shares of ABC and you tell your broker to sell short 100 shares of ABC, you have shorted against the box. An alternative to short selling against the box is to buy a put on your stock. This may or may not be less expensive than doing the short sale.

Historical Reference and Explanation

Also known as "shorting against the box".
 
Investopedia Says...     Before 1997, the sole rationale for shorting against the box was to delay a taxable event. According to tax laws that preceded 1997, owning both long and short positions in a stock meant that any papers gains from the long position would be removed temporarily due to the offsetting short position. All in all, the net effect of both positions is zero, meaning that no taxes need to be paid.

Let's say that you have a big gain on some shares of ABC. You think that ABC has reached its peak and you want to sell. However, the tax on the capital gain may leave you under-withheld for the year and subject to penalties. Perhaps the next year you expect to make a lot less money, putting you in a lower bracket and causing you to want to take the gain at that time. However, the Taxpayer Relief Act of 1997 (TRA97) no longer allows short selling against the box as a valid tax deferral practice. Under TRA97, capital gains or losses incurred from short selling against the box are not deferred. The tax implication is that any related capital gains taxes will be owed in the current year.

Short Against the Box for a Profit

Here is an example of how I use this technique to realize gains surrounding a significant change in the price of a stock. A significant change in the price of the stock can occur in either direction as a result of a earnings report, a media event, or volatile market condition. In the case of the stock depicted below I established a short and long position of equal weight at $39.00 per share. A bad earnings report was released after hours followed by a dive in the stock price the following day. Trailing stops were placed at 5% on both the short and long position establishing a 10% no profit channel. The long position stops out at 5% loss and profit starts on the short position. Cover the short at anytime after the stop out to capture profit. See figure below for further details.

Note: Most brockerage firms will not allow a box position to be taken on a stock. You may need to setup two separate accounts to handle this type of transaction (i.e. long position with TDAmeritrade and short postion with Scottrade). Also beware of the risk if the trailing stop is to close to the short and long position price (i.e. 2% on both sides). This may result in the stock oscillates in both directions stopping you out of the long and short positions. There is also a risk that the stock price may gap the next day resulting in the trailing stop activating at a much higher percentage of loss than expected. For example the stock price could have gapped and opened at $31.50 resulting in a trigger of your trailing stop for the long position at 21% rather than 5%. This technique is best played when the change in stock price occurs during market hours.

Tags: Stocks, Investments, Short Selling, Box Position

"Knowledge is proportional to the speed of processing of information surrounding any event, and is limited exclusively to awareness of such events. Therefore, if an observer is not aware of an event or does not have the ability to process the information surrounding the event, faster than it has occurred, then the observer is unable to see beyond the - knowledge horizon."

- Jeffrey Austin White

Tags: Knowledge, Information

Newton's equations predict that the gravity at the center of the earth is zero! All gravitational forces will cancel and be equal and opposite at the earth's center of mass. Unfortunately, it is impossible to test because of the extreme heat and pressure at the core.  My guess is that these equations don't apply in predicting internal gravity of a planet. Nevertheless a fun exercise in math. Suppose you could drill a hole through the Earth and then drop into it. How long would it take you to pop up on the other side of the Earth?

Your initial acceleration would be the surface acceleration of gravity

but the acceleration would be progressively smaller as you approached the center. Your weight would be zero as you flew through the center of the Earth. For our hypothetical journey we will assume the Earth to be of uniform density and neglect air friction and the high temperature of this trip.

For a spherically symmetric mass, the net gravity force on an object from that mass would be only that due to the mass inside its radius, and that would act as if it were a point mass located at the center. When this is analyzed in detail, you find that the gravity at any radius r less than REarth will be linearly proportional to the distance from the center.

Taking positive r as outward from the center of the Earth:

This is the same form as Hooke's Law for a mass on a spring. It would cause the trans-Earth traveler to oscillate back and forth through the center of the Earth like a mass bobbing up and down on a spring. The angular frequency and period for this oscillation are

For this case the period of oscillation is

The traveler accelerates toward the center of the Earth and is momentarily weightless when passing through the geometric center at about 7900 m/s or almost 17,700 miles/hr. The traveler would pop up on the opposite side of the Earth after a little more than 42 minutes. But unless he or she grabs something to hold on, they will fall back for a return journey and continue to oscillate with a round-trip time of 84.5 minutes.

As a further feature of this fanciful journey, suppose a satellite could be put in a circular orbit about the Earth right above the surface. Ignoring air drag and the terrific sonic boom that would accompany such an orbit, suppose it passed overhead just above the falling person as they popped up out of the hole. The period of such an orbit would be such that it would be passing overhead every time the oscillating person popped up on either side of the Earth.

The period of the orbit is calculated from

which is the same as the period of the oscillating body.

Tags: Gravity, Newton, Earth

After a half of decade of researching investment strategies, I have finally developed a highly predictive model for short-term stock trading with small reproducible positive gains. I have tried all of the popular stock trading strategies without success including: Chart Patterns, Delta Phenomena, Adam Theory, Moving Average Crossovers, Technical Analysis, etc... Although the more traditionally technical analysis techniques were helpful, I was never able to achieve reproducible results.

One day I was reviewing chart patterns on some of my most miserable purchases, when I serendipitously noticed a re-occurring chart pattern. For six months I collected stocks charts with a similar pattern and progression. After several weeks of mathematical analysis I discovered a real-time technique for finding and trading these types of stocks. I had given a name to the stocks that exhibited this behavior - Anomalous Unsolicited Directionally Indicated Breakdowns in Long-term Executing Stocks (AUDIBLES). I will dedicate several blog post to explain the techniques for investing and realizing short-term gains with AUDIBLES. Below is a typical price chart pattern for AUDIBLES along with the CCI, ADX, and MACD indicators.

Notice the sinusoidal wave pattern of recovery occurring after the 17% drop in stock price in the chart below.

See if you can apply the theory below to determine the buy and sell time of the stock in the chart above.

AUDIBLES Theory

The basic theory of AUDIBLES is that the frequency response of the stock is proportional to the price of the stock before breakdown given the following five criteria:

1. Stock price decreases more than 10% within single day of trading. (Preferably at the beginning of the trading session.)
2. Stock price between $3.00 and $25.00 with an average trading volume greater than 500,000.
3. ADX greater than 30 and less than 70. (Directional Movement System)
4. DMI- crosses above DMI+, coinciding with drop in stock price.
5. Stock price must show a positive trend with minimal volatility for greater than 1 year. (Linear regression slope > 0.1 with R2 > 0.5)

Buying and Selling AUDIBLES

• Purchase stock at 0.25*Period of Audible Frequency (T1) and Sell stock at 0.75*Period of Audible Frequency (T2) if CCI goes above -60 and continues in upward direction.
• Audible Frequency is calculated as -0.12*LN(Stock Price in Dollars)+0.4821 (The Audible Period is 1/Frequency)

NOTE: Release of negative news or earnings report within 5 days of stock drop is a poor indication.
NOTE: Heavy insider trading, particularly sales, within 1 month of stock drop is a poor indication.

Derivation of AUDIBLES Frequency

I was able to derive the AUDIBLES frequency by obtaining a representative number of stocks that have exhibited the behavior described above with the given criteria. I then determined the frequency using the period and length of the wave from the price chart. By plotting the stocks price before drop against the stocks frequency I was able to determine the dependent relationship depicted below. The red equation is the linear regression best fit and the blue equation is the logarithmic best fit.

"In a nutshell, I am able to predict with a high degree of accuracy when the high and low of the stock will occur from the AUDIBLES frequency only by knowing the price of the stock before it drops."

By now you are probably thinking that I am crazy. I could not believe it myself, especially after seeing the strength of the trend (R² from Pearson's linear regression). I will explain examples of use and why I think this phenomenon occurs in later posts.

Tags: Stocks, Investments, Technical Analysis, Chart Patterns, AUDIBLES

Welcome to the blog of Jeffrey Austin White. Please feel free to leave comments on any of the ideas posted on this website.
The goal of this website is to share my ideas before they are lost or forgotten. Hopefully you will find my ideas/opinions usefully or entertaining. Please be aware that I allow anybody to contribute to my website.  I do not assume any responsibility or liability for any blogs, opinions or other commentary posted on this website or any website linked to this website and makes no express or implied warranty or guarantee about the accuracy, copyright compliance, legality, or any other aspect of the content.

I have decided to create this website because I realized several years ago that keeping a written journal is sub optimal for the following reasons:

1. My handwriting is almost illegible now. The more I use computers the worse my handwriting gets.
   
2. I am always tired after a full day of work and rarely have the energy to write my ideas on paper.
   
3. This might be sexist but I feel like writing in journals is for woman. Men share ideas through publications, patents, programming languages, or over a pint of beer.
   
4. Paper can start on fire.