How Many Unique bit.ly Combinations Are There?
I was thinking randomly about how many bit.ly combinations there are and how much unique shortened URLs they can generate given their current construct. Here’s their construct:
- Up to 6 characters after bit.ly/
- Any mix of capitalized letters, lowercase letters, and numbers
If you limit the combinations to only ones where bit.ly is the domain (and not partner domains), and you presume they can go up to 6 characters (i.e. 1–6) as opposed to exactly 6 characters – how many total combinations are there? Any math whiz out there who can figure it out pretty quickly and enlighten us in the comments section? My small math brain was getting cramps thinking about it.
Given that they shorten 40–50 million URLS per day, I also wonder how long they can last on this construct. Probably a long time I suspect even including their growth. Random thought for the day, and thanks for the help.
My Trip To Haiti
I wasn’t originally planning on blogging about my trip to Haiti as the decision to go was more of a personal one. But, having been back for a week now, I figured if blogging about it could help in some way, then I might as well. So, here it goes:
I spent a week in Haiti serving through a collaboration between two organizations – Jordan International Aid (JIA) and J/P Haitian Relief Organization (J/P HRO). Our sending organization, JIA, has been sending medical teams to Haiti every third week of the month since the earthquake first hit Haiti. Our receiving organization, J/P HRO, manages one of the larger tent cities in Haiti – Petionville. The two organizations collaborated such that our team at JIA would be staffing the hospital and triage clinic at Petionville – a tent city of 50,000 people. J/P HRO also enabled us to set up some mobile clinics at other tent cities where the refugees in many cases had never received medical care.
When we first landed in Haiti and drove around Port-Au-Prince, I was struck by how the city looked frozen in time a full six months after the earthquake. There were buildings that had been pancaked from the earthquake and others clearly damaged beyond repair – just sitting there untouched. I was struck by the lack of both demolition and construction. The earthquake could have happened the day before. Port-Au-Prince, itself, was terribly congested with a mix of cars and people owning the broken streets. Our team stayed at what used to be an orphanage – needless to say, we felt lucky to have some semblance of running water, power, and intermittent Internet access at our home for the week.
The team was principally comprised of doctors, nurses and a couple pharmacists from the Bay Area, alongside a few non-medical folks (like me) from my church. Our principal role was to help staff and run the “hospital” and “triage clinic” at the Petionville tent city. If you can imagine M*A*S*H, you’d get the idea of where we were serving. They were basically tented areas with stretchers and boxes to sit on. Every day hundreds of people would line up from the tent city, and often wait for hours to receive care. We had the usual pediatric issues of fever, dehydration, diarrhea, etc. We would often also see lacerations, burns, and blunt trauma. There were individuals we treated with longer-term issues like AIDS, cancer, and stroke. There were a number of babies also delivered during our time. And underlying all of the traditional physical issues – there were serious issues like post traumatic stress disorder that were prevalent. Each day, we would see about 150–200 patients at Petionville. We also had the opportunity to set up mobile clinics at other tent cities in surrounding areas.
Though Haiti was just a 2 hour flight from Miami, I couldn’t have been further from my little world of Boston private equity. And, that is a good thing. It was really helpful for me to see the plight of the Haitians and hear their stories. So many people stick out in my mind from this trip. The boy who came in without complaint, despite having a severely burned arm from top to bottom. The woman who gave birth to two very premature twins who did not ultimately survive. The girl who couldn’t have been older than 13 years old, coming in with her three younger siblings – all orphaned. The deaf and mute boy on the Petionville grounds whose spirit could not have been brighter. Our many Haitian friends and staff at the hospital and Petionville who had lost loved ones.
I’m sure many people have given money to Haiti – but I came to appreciate that giving time in many instances is worth a lot more because it’s through time that you build relationships and start to really care. I also came to appreciate that in situations of devastation like Haiti, anyone who has an interest to help, can help. I’m back in the saddle at work now, but I think about Haiti every day – wondering if there’s a broader way to help that country. I’m quite sure I don’t have the answers, but somehow I think thinking about it is a good thing.
Why Do Some Relationships Fail?
I like to blog about different, random, more personal things on the weekends. Hence, I’m starting a series on books that I think directly or indirectly answer an interesting question with an interesting point of view. The first installment last weekend was Why Are 80% of Harvard Students First-Borns?. Today is the second installment and is about one of my favorite relationship books – The 5 Love Languages by Gary Chapman.
If we look around – it’s pretty undeniable that there are broken relationships within marriages, families, and friends. What’s underlying some of the challenged relationships between spouses, parent/children, etc.? Clearly, there’s not one simple answer. Yet, Gary Chapman lays out a relatively simple but profound theory based on a very straight forward framework that may have broad relevance. First the framework:
He believes that there are 5 primary love languages and everybody has a primary (usually one, maybe two) love language which makes them feel loved. Importantly, their primary love language is not necessarily the way they communicate love to others – but it’s how they feel loved by others. The 5 languages are:
- Physical Touch – hugs, kisses, physical play, affection, etc.
- Words of Affirmation – words of praise, encouragement, adoration, admiration, etc.
- Quality Time – focused, attentive time in a joint activity, conversation, etc.
- Gifts – self explanatory: meaningful, thoughtful gifts
- Acts of Service – helping out with projects, responsibilities, homework, tasks, etc.
So, that’s the framework. The theory on why some relationships are strained is pretty straight forward:
- Everyone has a primary love language – which is how they receive love.
- People tend to communicate love to others with their own primary love language.
- But, if the other person has a different primary love language, they will not feel loved.
For example – your primary love language may be words of affirmation. But, if your child’s love language is physical touch – no amount of verbal praise will replace your child’s need for hugs, physical play, and so forth. Or your love language may be physical touch, but your spouse’s may be acts of service. So, no amount of affection will replace the love communicated through service acts like cleaning up the house, cooking a meal, or taking out the garbage. That’s why two people in a relationship can be trying hard but not communicating love to each other because they don’t recognize the distinction in each person’s primary love languages.
Though it’s a relatively simple framework – I recommend getting the book if it’s at all interesting to you. The book gives more insight into how to determine someone’s primary love language, practical ideas around each love language, and more insight and detail on what each love language means. OK, I never thought I’d write a blog post with the word “love” in it 25 times. I think my next post will have to be about ultimate fighting or something.
Why Are 80% of Harvard Students First-Borns?
That’s my estimate anyways. I remember it like it was yesterday. It was my freshman year at Harvard, and I was going to the first lecture of “Justice” – one of the most popular classes on campus. The lectures took place in Sanders Theater packed by over a thousand students since it’s only offered once every three years. The first question the professor asked – please stand up if you’re the first born child in your family (inclusive of only children). I literally felt like everyone in the entire theater stood up – except me since I’m a youngest child. Why is it that such a high majority of Harvard students are first borns or only children?
Because birth order matters according to Dr. Kevin Leman, author of The Birth Order Book – Why You Are the Way You Are. I’ve been reading it – here’s his framework on how the different orders generally are (noting that not every characteristic applies to every child):
First Child: perfectionist, reliable, conscientious, a list maker, well organized, hard driving, a natural leader, critical, serious, scholarly, logical, doesn’t like surprises, a techie.
Middle Child: mediator, compromising, diplomatic, avoids conflict, independent, loyal to peers, has many friends, a maverick, secretive, used to not having attention.
Youngest Child: manipulative, charming, blames others, attention seeker, tenacious, people person, natural salesperson, precocious, engaging, affectionate, loves surprises.
Only Child: little adult by age seven, very thorough, deliberate, high achiever, self-motivated, fearful, cautious, voracious reader, black-and-white thinker, talks in extremes, can’t bear to fail, has very high expectations for self, more comfortable with people who are older or younger.
Should Bernie Madoff Have Charged 1% or 2% Fees?
The short answer is it depends. Here we go…
On a flight back from London today, my partner showed me a little blurb in the most recent Time Magazine about a bet between two scientists. They bet $300 on whether the first person to live 150 years would be born by 2000. They put the money into an investment account which will presumably be settled by their heirs. So, what will the $300 be worth in 150 years?
Let’s presume the $300 was put into a Bernie Madoff-like fictional fund that generates 10% annualized returns any and every year without fail. Let’s also presume for a moment that this is a no-load (i.e. no fees) fund. What would the $300 be worth in 150 years?
- A whopping $485 million.
Now, let’s show the impact if this Madoff fund charged an annual 1.0% fee based on assets under management. What would the $300 be worth in 150 years?
- A surprisingly diminished $123 million.
Now, let’s say Madoff charged a 2.0% annual fee. What would the $300 be worth in 150 years?
- A further diminished $31 million.
Before you go off on the exorbitant cost of paying fees, just note that if the $300 was put into a no load bond that generated 3.0% annualized returns, the end result would be a paltry $25,000. So, it still pays to pay for alpha by a longshot.
Now, let’s get to the question of this post. Should Madoff have charged 1.0% or 2.0% annual fees to maximize his fee income from this client over the investment period?
If the fee was 1.0%, the cumulative fees over the 150 years is:
- $13 million.
One would expect that charging 2.0% annual fees would net Madoff a much better result over 150 years. But, here are the cumulative fees at 2.0%:
- $7 million.
Why in this case would charging a higher fee result in lower aggregate fees? For the simple reason that over time, the higher fees diminish the total assets under management so dramatically, that over the long-run, it meaningfully and negatively impacts aggregate fees. Then why does the answer depend if the math is so clear? Because this is an unusual scenario where the term of the investment is 150 years. As it turns out, for about the first ~75 years, it’s better to charge 2.0% fees. After that, it crosses over and a 1.0% fee generates more cumulative fees as the assets under managements starts to meteorically rise. Yet again, like in all things, time horizon does matter.
Email Signature Gone Wild
This (sanitized) email signature came into my colleague today. I can’t say I’ve seen anything like it.
———————————————————
[First Name] [Last Name]
CEO, Company Name
firstname.lastname@companyname.com
TEL: +44 (0)xx xxxx xxxx [main switchboard]
TEL: +44 (0)xx xxxx xxxx [direct]
MOB: +44 (0)xxx xxx xxxx
FAX: +44 (0)xx xxxx xxxx
SKYPE: ’companyname’
WEB: www.companyname.com
You Tube: http://www.youtube.com/users/companyname
LinkedIn: www.linkedin.com/in/firstnamelastname
LinkedIn Group: http://www.linkedin.com/e/coolhandle
BLOG: http://coolhandle.wordpress.com
Twitter (me): http://twitter.com/firstnamelastname
Twitter (company): http://twitter.com/companyname
Slideshare: http://www.slideshare.net/companyname/presentations
NING: http://companyname.ning.com/profile/coolhandle
———————————————————
Time Horizon Does Matter
Ever since I started in the investment business, entrepreneurs would often ask in meetings, “What’s your typical time horizon for an investment?” To be candid, I never thought this was a particularly relevant question. No institutional VC or growth equity firm will say we’re trying to flip our investments in a year. And, no firm will say we’re looking to hold every company for 15 years. Though every firm with some history will have examples of both taking place. I’d guess that most firms will say their typical holding period is in that 3–6 year range with flexibility above and below that. To that end, I have always thought that time horizon was never that distinctive or critical of an attribute when selecting a firm.
As the years have gone by, and I’ve been exposed to different investment philosophies – financial or otherwise – and I’ve come to appreciate that in many ways, time horizon can be a driving force in one’s strategy or even ideology. Though in my vocational world, time horizon isn’t that distinctive because most firms are within a similar band, in the broader world, time horizon is profoundly implactful. Here’s what I mean…
On investments: What if a firm came along with the resources and focus to invest in companies with a 10–30 year return on investment? All the traditional defining attributes of a firm – stage, sector, geography, etc. – are subjugated to the outstanding fact that this firm is optimizing for the 20 year return, not the 5 year return.
An example of this might be Google. Google bought YouTube for $1.65B in 2006. Since that investment, they have taken much criticism because YouTube continued to burn cash and the business model hadn’t been proven to work. In other words, the YouTube acquisition didn’t make sense if your investment horizon was 3–5 years. But, what if Google’s horizon was 10–20 years, and that’s what they were focused on? What if they didn’t care as much about the economics and importance of video over the near-term, but just wanted to make sure they were dominant 10–20 years later in video? Google is one company that can afford to do that, and a different time horizon leads to a different set of actions.
On economics: Let’s say that you are sitting in Tim Geithner’s seat (U.S. Treasury Secretary) at the start of his term last year. And, he has a simple question – do I bail out the banks? I would argue that the question to drive the answer is – what’s your time horizon? Are you aiming to stabilize the U.S. economy in the 1–4 year horizon – over Obama’s term, or is your priority to create the stage for a strong and vibrant economy over the 20–30 year horizon? Clearly the nature of politics dictates a nearer-term horizon, and hence, the logical decision is to bail out the banks and deal with the consequences later. But, if your primary objective is to optimize the long-term (20–30 years) health of the economy, one could make a strong argument that bailing out the banks is not the right thing to do. This is not about big or small government, left or right ideology, populist or otherwise – this is simply about time horizon.
On poverty: Let’s say you want to help the homeless in Boston. Again, I’d argue that time horizon is a big driver. If your objective is to help today – you’d probably walk outside and lend a helping hand through money, food or clothing. If your objective is to help this year, maybe you’d support or volunteer at a homeless shelter. If your objective is to help over the 20–50 year horizon – then you’d probably focus all of your energies on a structural issues like education and jobs. Sometimes I wonder if different ideologies on poverty (e.g. Democrats and Republicans) are really just differences in time horizon rather than core philosophy.
If you look at all different aspects of life – career decisions, child rearing philosophies (think about sleep training), relationships, etc. – different time horizons leads to different decisions. Hence, while I tended to be dismissive about time horizon in the past, now in many ways, it’s a starting point for making decisions. I’ve come to appreciate that it’s a healthy thing to ask in any decision making process – what’s my time horizon?
What Is Your Personal Profit Per Hour?
Was thinking about some useful household finance metrics as the new year approaches…
From the day anyone starts working, we’re quickly educated on the concept of an hourly wage. Whether we start at minimum wage or otherwise, we’re conditioned to the idea of compensation being denominated in the time interval of hours. Even as many folks transition to being paid on a salaried basis, it’s not hard to calculate what you effectively make per hour. For example, if Bob’s after-tax bi-weekly paycheck is $1,500 and Bob works 50 hours per week, then he makes $15.00 per hour. This example presumes Bob has no other sources of income other than his paycheck.
The household metric that is often missing from the equation is the flipside: spending per hour. The most simple way to calculate this number is to take all of your expenses for a given period (say a month) – mortgage/rent, credit card charges, car payments, ATM withdrawals, utilities, insurance, interest payments, tuition, healthcare, charitable giving, etc. – and do the basic math to denominate that spending on an hourly basis presuming the same “spending hours” as “working hours”. To use the same example, if Bob spends $3,000 per month and has the same 50 “spending hours” per week, then a little basic math says Bob spends $13.85 per hour.
That takes us to the most important metric: profit per hour. Bob makes $15.00 per hour and spends $13.85 per hour which means he makes $1.15 per hour in profit. The reason I prefer the hourly denomination of profit more than a month or year is that it’s more practical for all of those little spending decisions we make every day. Congratulations to Bob for being profitable! Just knowing your hourly profit metric is an achievement in and of itself. But, let’s go on to a couple second order ideas for those interested.
First, you can say that spending hours and working hours are not the same in reality. If Bob spent $13.85 every hour of every day (24 x 7), he would end up spending $10,000 per month instead of $3,000. So, the key to making the math work is to limit your spending hours per week to the same as your working hours per week. If you work 50 hours per week, pick the 50 hours per week where spending is allowed and fix them. It might be 5 specific hours on each weekday and 12.5 hours on Saturday and Sunday. Once that is selected, the question is how much can you spend per hour in those “spending hours”.
To determine how much you can spend in those spending hours, you have to determine how much you have already spent just by existing. Take all of your “fixed costs” – all those costs that you bear whether you ever take your cash or credit card out of your wallet. This could be things like car payments, rent/mortgage, insurance, tuition, etc. Let’s say for a moment that of Bob’s $13.85 per hour of spending, $10.00 per hour is fixed. That means in those 50 spending hours per week, Bob can spend $3.85 per hour and still maintain his profit margin of $1.15 per hour. Now all of Bob’s discretionary spending decisions can be benchmarked against that $3.85 in hourly discretionary spend that he knows he is allowed. That’s a useful metric whether Bob is looking to get that bagel sandwich for breakfast or that fancy steak for dinner.
The Case For Gold & The Case Against Gold
I’ve been looking unsuccessfully for an article that succinctly lays out both sides of the debate on whether gold is a good asset to own. So, I’m here to ask for your assistance in pulling together an article that outlines the key points on both sides of the debate. I have some ideas, but I’m sure you have more. Just leave any points of view, good articles or predictions in the comments an they will be added to the article. I hope that this article proves to be useful to readers regardless of your current point of view on the topic. If you’re formulating your own opinion on a given topic, hopefully it’s helpful to get the full spectrum of opinions on the topic. And, if you already have a strongly held point of view, surely it’s good to pressure test your convictions with an opposing view every once in awhile. So, here we go:
The Case For Gold
- The devaluing of fiat currencies around the world through unprecedented fiscal stimulus will cause an increase in the price of gold.
- Gold is a safe haven currency that tends to rise in precarious economic times like these.
- International governments will diversify out of their US dollar reserves and buy gold thereby driving demand.
- Hyperinflation is on the horizon – and that drives gold prices.
- The growth of institutional and retail investment demand for gold.
- Lack of growth in the supply of gold from mines.
- Fiat currency has no intrinsic value.
- Others?
The Case Against Gold
- Gold doesn’t pay interest.
- Gold goes up when there’s inflation, and deflation is the far greater risk today.
- A safe haven asset like gold goes up when Armageddon hits, and we have avoided that.
- Over the long run, history shows that gold is not an appreciating asset.
- Asset prices are inflated by the dollar carry trade – gold will come crashing down
- Too much hype – sell high, buy low.
- Gold has no intrinsic value.
- Others?
The Price of Gold/Oz.
- $1,141.70 (11.19.09 – date of post)
Gold Articles
A Simulation Game: Cutting Your Losses
One of my partners led an impromptu game in our team meeting today which illustrates the emotional tension of cutting your losses. For any investor or operator who takes risk with capital, the concept of cutting your losses comes into play at some point.
The simulated game had these ground rules:
- Everyone would have the chance to make monetary bids for a prize.
- You could always increase your bid after hearing other bids. There is no limit to the number of revised bids you could make.
- The highest bid after everyone had finalized their bids would get the prize – in this case my partner offered to pay $20 as the prize.
- The catch is if you are not the highest bid – you would have to pay him the amount of your highest bid. So you could lose money.
- He guaranteed he would theoretically make inordinate amounts of money through the simulation.
So in a room of around ten folks, we started lobbing in hypothetical bids:
- I started with a bid of $5.00, just to see how things would go.
- Another person bid $7.00.
- Then another person offered $19.99 thinking that he could short circuit the whole process.
- Not wanting to lose my $5.00, it immediately occurred to me to offer $20.00 – which I did.
Then all of us had the aha moment that for the person who bid $19.99, if he thought he could win the “auction” by bidding $20.01 – he would certainly rather lose 1 cent than lose $19.99. And, then if he bid $20.01, I would have to decide if I was going to bid $20.02 for the chance to lose 2 cents rather than lose $20.00. But, what if then the person who bid $7.00 decided to bid $20.03 for the chance to lose 3 cents instead of $7.00. And, eventually you could imagine a scenario where everyone in the room bids above $20.00 for what amounts to be a foregone conclusion where everyone loses money (except my partner of course).
In a very simple way, this game illustrates the challenge of cutting your losses. Investors face this in situations when they have to decide whether to invest more money behind a company that is decreasing in value. Managers often have to face this when continuing to invest in business initiatives that are not tracking, but have taken substantial time and resources. I think the lesson learned from the game is if you’re in a no-win situation, cut your losses immediately. But, as the game illustrates, that is easier said than done. And in the real world, it’s often hard to know if you’re truly in a no-win situation or not.
By the way, I would not have bid $20.02.
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