2015 New Year’s Resolutions

I’ve organized my 2015 New Year’s Resolutions into 6 categories: (1) Simplify, (2) Experiences, (3) Innovation, (4) Learning, (5) Wellness, and (6) Selflessness. For each category I tried to come up with at least one quantifiable resolution, as discussed below.

1. Simplify

My first resolution for 2015 will be to simplify how I live. Living a minimalist lifestyle has been one of the recent trends in my life. I have significantly reduced the amount of clutter around the apartment. One big area was converting to an all electronic library of books. There are a lot of opportunities for further simplification in 2015. In particular, I want to accomplish the following goals:

  • Keeping a cleaner apartment (or house, if that purchase occurs this year) and office,
  • Being more organized at both home and work, and
  • Reducing the number of clothes (most of which I never wear) and simultaneously improving how I dress.

2. Experiences

An additional 2015 resolution is to pursue new experiences. This specifically means doing things outside of the apartment. New experiences include:

  • At least 2 long distance vacations (e.g. national parks, other countries)
  • At least 30 cases of local exploration (e.g. restaurants, historical sites, concerts, hiking)
  • At least 30 social opportunities (e.g. entrepreneurial meetings, networking, dating, hanging out)

Photography fits nicely into this resolution. I want to continue improving my photography skills and this means taking lots of photos. The number of photos I capture each year seems to be decreasing. I’d like to reverse that trend this year by finding more opportunities for photography. I would like to get at least 5 pictures that I feel are good enough to be displayed on my wall at home.

  • Taking more pictures with the goal of obtaining at least 5 wall-worthy photos.

3. Innovation

In 2014, I tried to make a list of 365 opportunities for new products. I didn’t come anywhere close to fulfilling this goal. However, I still believe this is an important area where I should focus in 2015. Instead of a specific number of ideas, I want to keep an innovation notebook. New ideas, various innovation exercises, and related analyses will be stored in this notebook. Various techniques (questioning, association exercises and experimentation) mentioned in the Innovator’s DNA book could be recorded in the notebook as well as any notes from additional innovation or entrepreneurial books that I read in 2015.

This gives me a lot of freedom to pursue whatever comes up. For example, if I have a great idea on January 3, I can spend the rest of the year working exclusively on that idea. Otherwise, maybe the notebook becomes a huge list of ideas that are interesting but not really exciting for further development.

  • Complete at least 12 pages each month in the innovation notebook for a total of >150 pages at the end of the year.

4. Learning

I’m really happy with my 2014 progress for learning-related resolutions. I completed five courses in a range of subjects. For 2015, I want to continue to place lifelong learning as a top priority. I want to ensure that my learning activities improve both my breadth (new areas) and depth of knowledge (learning more in areas where I specialize). The learning will most likely be a combination of online courses and reading textbooks.

  • Complete five online courses or textbooks

A new goal for this year will be to perform a thorough review of optics literature. Since I don’t have a subscription to the closed access journals, I will probably focus only on articles published in open journals such as Optics Express. The goal of the literature review is to deepen my knowledge in the field of optical sciences. I think a reasonable goal will be to review one article per week.

  • Review 52 scientific articles.

I also want to continue the progress I’ve made with book reading. I think 52 books in 2014 was overkill and all that reading took time away from other worthy pursuits. For 2015, my goal will be to complete a total of 30 books, with no restrictions on the genre, topic, or format (i.e. audiobooks).

  • Read 30 books over the course of the year

5. Wellness

I did an awesome job this past summer with exercising and nutrition. Although I have been eating better this year, the exercise was only consistent during the summer months. For 2015, the goal will be to exercise consistently throughout the year. For some quantifiable goals, I plan to run at least 300 miles which corresponds to about 100 5km runs or 2 runs each week.

  • Run for over 300 miles in 2015.

I’d also like to also improve my general nutrition including eating more fruits and vegetables, eating less carbohydrates, and drinking less beverages with high amounts of sugar, artificial sweeteners, or caffeine.

  • Drink at least 32 fluid ounces of water each day.
  • Consume at least 365 servings of fruit over the course of the year.
  • Consume at least 365 servings of vegetable over the course of the year.

6. Selflessness

A few months ago I became concerned that I wasn’t placing enough emphasis on being selfless. I read a few books specifically in search of ways I could lend a hand or money to help others. Ironically, the books actually diminished my initial enthusiasm as they discussed many of the complications associated with traditional forms of charity. Despite the smothering effect of the charity books, in 2015 I would like to work on various areas of being selfless including increasing empathy, embracing altruism, and consistently give to charity.

  • Stick to charitable plan devoting time and money to something other than myself.
  • Being polite and considerate of others.

December Resolution Update

1. Reading (Resolution Success)

In December, I completed 7 books to bring the annual total to 55 books. This surpasses my revised resolution of completing 52 books and greatly surpasses my original resolution of completing 30 books. The list of books I completed in December is shown below. Of these, The Martian was my favorite. This is a book that tells the story of an astronaut abandoned on Mars and his battle for survival.

  • The Naked Sun (Asimov)
  • Caves of Steel (Asimov)
  • Red Seas Under Red Skies (Lynch)
  • The Innovator’s DNA (Dyer)
  • Out of Our Minds: Learning to be Creative (Robinson)
  • The Lies of Locke Lamora (Lynch)
  • The Martian (Weir)

2. 365 Opportunities (Resolution Fail)

I didn’t actively add any new ideas to the list in December. The total count stands at 103, which isn’t too shabby but way less than the original goal. The resolution was more difficult than I originally anticipated although I didn’t devote as much effort as I should have for this resolution.

3. Exercise More Consistently (Resolution Success)

I ran five times in December for a total of 19 miles. This was way less than my summer running but still respectable considering the colder temperatures and shorter days. Overall, I’m proud of my progress with exercising this year. I ran much more than I ever expected over the summer and lost a lot of weight and have been able to keep the weight at a reasonable value since then.

4. Classes (Resolution Success)

I successfully completed the Data Management for Clinical Research class bringing my total class completion to five for 2014. I learned a lot in all these classes and I am happy that I have made important progress with regards to lifelong learning.

5. Build Something (Resolution Fail)

The goal of this resolution was to balance the book-ish learning of the Classes and Reading resolutions with experimental learning that comes with building widgets, programming applications, etc. Unfortunately, I let the book-ish side win in 2014 and did very little building (work not included). This is something I will have to work on in 2015.

October and November Update

I never provided an October update so I will combine the October and November update into one post.

1. Reading

I completed 8 more books in October and November bringing the total to 48 books this year. This number is right in line with my goal of reaching 52 books by the end of the year.

  • Daring Greatly: How the Courage to Be Vulnerable Transforms the Way We Live, Love, Parent, and Lead by Brene Brown
  • Born for Love: Why Empathy Is Essential and Endangered by Bruce D. Perry and Maia Szalavitz
  • The Price of Altruism: George Price and the Search for the Origins of Kindness by Oren Harman
  • Toxic Charity: How the Church Hurts Those They Help and How to Reverse It by Robert D. Lupton
  • Tricked (The Iron Druid Chronicles #4) by Kevin Hearne
  • Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty by Abhigit Banerjee and Duflo Esther
  • Zero to One: Notes on Startups, or How to Build the Future by Peter Thiel and Blake Master
  • The Slow Regard of Silent Things by Patrick Rothfuss

I chose many of the books in an effort to understand effective charity. These books introduced the many intricacies for giving time and money effectively. Ironically, the books suppressed my initial enthusiasm for pursuing more selfless acts. Giving money directly can lead to dependency.  Some of the books describe studies showing that the poor of the third world will often direct the money for useless items like cigarettes and alcohol rather than education for their children. The books didn’t provide any insight on what direction to take but at least gave me a much better understanding of many pitfalls and limitations associated with charities. Of all the books, I liked Toxic Charity by Robert Lupton the best.

2. 365 Opportunities

I added a few ideas but no significant progress on this list the past two months. At this point, I’m not actively pursing this goal anymore although I do plan to jot additional ideas into this list.

3. Exercise More Consistently

I really fell behind on my running in October and November. I believe the colder temperatures were mostly to blame. In December, I will try to be more active either by doing some runs (when temperatures permit) or working my scrawny muscles with the dumbbells.

4. Classes

I finished the Introduction to Computational Finance and Financial Econometrics from the University of Washington. I ended up dropping the Giving 2.0 class and taking a class on Data Management for Clinical Research from Vanderbilt University. It was a perfect time to take this class as many of my tasks at work are related to clinical research. I am a week or two away from completing this class, which will fulfill my New Year’s Resolution of completing 5 courses in 2014.

5. Build Something

I fail at this one every month. At least my failure is consistent! That counts for something… maybe?

Markowitz and Me

Setting the Stage

When I was graduating high school, my dad had a moment of genius. He gave me a small amount of money to open a brokerage account to start investing in the stock market. Even though the amount of money was small (maybe $1000), I was given a valuable opportunity to jump in and learn a lot about investing, without much at stake.

Back in 1998, I invested in a small number of stocks. I didn’t have a real strategy other than I wanted to invest in companies I liked and that I felt would continue to grow in the future. Most of my decisions were based on qualitative reasoning. For example, in the late 90’s, the internet was just emerging as the huge success it is today. I chose to invest in FedEx because I believed that more people were going to buy stuff online rather than traditional brick-and-mortar stores and all that stuff would need to be shipped by either UPS, FedEx, or the Post Office. The growth of China was also constantly in the news so I thought that Caterpillar (CAT) would prosper due to all the construction equipment they would be selling to China as the country developed its infrastructure. That was the degree of thought that led me to buy these particular stocks.

Around that time, I bought the following stocks. As I’ve always taken a buy-and-hold approach, I still own most of these stocks today. For the most part, I split my initial investment evenly between these five stocks.

Caterpillar, CAT
FedEx, FDX
Microsoft, MSFT
3M, MMM
Barnes and Noble, BKS

For the past month or two, I’ve been taking an online course from the University of Washington titled Introduction to Computational Finance and Financial Econometrics. I’ve learned a ton in the past 9 weeks from both the lectures and the programming exercises in R. After taking this class on computational finance, I thought it would be interesting to compare the results of that initial portfolio with what could have been achieved using the Markowitz theory and the assumption of constant expected returns.  Essentially, the goal is to determine the optimal mix of a given set of stocks to minimize the amount of risk you are taking to achieve a given return. The crazy thing is that even after all this high-level analysis, there is no guarantee that you would be better than just dumping your money in an index fund or selecting some random mixture of the stocks.

How did the original portfolio perform over the past 16 years?

The following chart shows how much $1 invested in the summer of 1998 is worth today (end of October 2014). For example, $1 invested in CAT in 1998 is now worth approximately $5.75. Alternatively, 1$ invested in BKS is only worth about $1 today. With that $1000 investment split evenly between these 5 stocks, the current value of that portfolio would be $3969.  For comparison, the same money invested in the S&P 500 would be worth $2308. Ironically, this portfolio would have significantly outperformed the S&P500, although I am confident this was simple luck, nothing more.

Stocks5

If it was 1998, what would be the global minimum variance portfolio?

The minimum variance portfolio is the mixture of stocks that is predicted to be the least risky. To calculate the MVP, we need to figure out some statistics of the stocks. We will use the data from 1993-1998 to quantify the statistics. The average and variance of monthly returns for these five stocks are shown below.

CAT FDX MSFT MMM BKS
Mean 0.0196 0.0145 0.0416 0.0152 0.0199
Variance 0.0046 0.0063 0.0065 0.0028 0.0096

Using these statistics, we can determine the global minimum variance portfolio – the mixture of stocks that have the lowest risk based on the statistics from the past five years. The weights of each stock in the global minimum variance portfolio are shown graphically below. The predicted performance of this portfolio was 1.7% per month with a standard deviation of 3.9% per month.

global_min_varWhat would be the efficient portfolio for these stocks?

The efficient frontier is the maximum expected return you can expect to achieve for a given risk level, as measured with the portfolio standard deviation. The global minimum variance portfolio is the left-most point on the efficient frontier shown below. As you can see, there are other options along the efficient frontier with greater potential returns but with greater risk (x-axis). The exact portfolio you choose is basically determined by your risk tolerance. If you don’t mind taking on more risk, you can potentially get much larger returns. When all said is done, because the stock returns are all over the place, even the efficient frontier has a lot of uncertainty.EfficientFrontierHow would the global minimum variance portfolio would have performed since 1998?

The global minimum variance portfolio would increase from $1000 to $4911, which is much better than both my equally weighted stock portfolio ($3970) and the S&P500 ($2308).  Recall that the global minimum variance portfolio was intended to represent the least risk although it did amazingly well over that 16 year time horizon. I admit that 16 year time horizon is probably longer than typical but these are definitely nice results. With that being said, I’m still going to be piling all my savings into index ETFs.

 

 

The quote of the day from Theodore Roosevelt:

It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.

September Resolution Update

1. Reading

I completed three additional books in September bringing my total book count up to 40, which puts me on target for completing 52 books this year.

  • A Dance with Dragons (re-read) by George R.R. Martin
  • The Broken Eye by Brent Weeks
  • Living High and Letting Die by Peter Unger

Living High and Letting Die was a philosophical book about the morality of providing for the underprivileged, particularly in Third World countries. The book contains many interesting scenarios that forces you to critically consider what is important. For example, if you saw a child drowning, you would be morally obligated to save that child. However, there is no such moral drive to help save a child living on the other side of the world from malnutrition and starvation. One life has no more value than the other but we have huge differences in how we respond to these crises.

2. 365 Opportunities

I added 12 new ideas to my list for a total of 102 ideas. Although I fell short of my goal for the month, I do think I had some better quality ideas this month. For October, I plan to generate 15 new ideas.

3. Exercise More Consistently

I exercised consistently until the last week of this month, when the exercise routine fell apart partly due to stuff at work and partly due to laziness. I plan to re-start the exercise tomorrow – I definitely do not want to let my fitness to deteriorate to where I was earlier this year.

4. Classes

The Introduction to Computational Finance and Financial Econometrics from the University of Washington is going well. I am approximately half way through the class and am learning some interesting concepts in financial analysis. I also signed up for my 5th class of the year which is called Giving 2.0, which is a class on philanthropy provided by Stanford. This class helps me fulfill my resolution of completing 5 courses this year in addition to working on being more selfless.

5. Build Something

Nothing outside of what I build at work. October is a new month.

TODO: Increase Selflessness

As I continue to assess my 2014 resolutions, I have a growing concern that they are too self-centered. Reading a certain number of books and completing a number of classes are resolutions related to life-long learning. Improving my fitness level to live an active lifestyle in my later years is the motivation behind the exercise resolution. Building things and brainstorming entrepreneurial opportunities are intended to improve my creativity. This last category may be selfless if geared toward helping others, but I have not approached the resolution in this manner.

More emphasis on selfless and altruistic goals is needed. Unfortunately, knowing where to start is difficult. The easiest and most obvious solution is to give money to charities yet I am reluctant to do this. Departing with the money is not the problem – it’s the fact that giving money is effortless. It seems that helping others should require some minimal amount of effort and consideration. For example, how do you effectively help others without being demeaning or potentially harmful, that is, causing the recipient to become more dependent on charity? How can you maximize the return on charitable giving of money or time? Are there metrics to track the effectiveness of a particular activity?

Remember that old proverb about giving versus teaching:

Give a man a fish and you feed him for a day; teach a man to fish and you feed him for a lifetime.

Both giving and teaching are altruistic but teaching has much more value for the recipient over time. A judicious and well-reasoned approach to charity can help ensure future activities have the greatest impact possible.

I’ve been dwelling on the uncertainty of how to proceed for several months. For September, I want to formulate a plan and start taking practical steps in the right direction, rather than continue wallowing in this uncertainty as I have in the past.

For my first step, as a geek, I intend to find some books that relate to these issues. Here are a few relevant books that look interesting and have been added to my to-read list:

  • Living High and Letting Die by Peter Unger
  • The Price of Altruism: George Price and the Search for the Origins of Kindness by Oren Harman
  • Born for Love by Bruce Perry
  • Daring Greatly: How the Courage to Be Vulnerable Transforms the Way We Live, Love, Parent, and Lead by Brene Brown
  • Toxic Charity: How the Church Hurts Those They Help and How to Reverse It by Robert Lupton

The hope is this initial research will provide a roadmap of how to proceed. This WordPress site is intended to be both a repository of ideas and a means to hold myself accountable by tracking my progress. For whatever weird psychological reason, I am more likely to accomplish a goal if I write it down, particularly on this site, as has been illustrated with this year’s resolutions. I will be careful not to disclose too much of what I am doing, especially as I don’t want to broadcast my good deeds. Fortunately, I can’t remember the last time I had a visitor to my site, so that shouldn’t be much of a concern.