Noted for the week of January 21st

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  • Kelly Clarkson – Kelly Clarkson sings “My Country Tis of Thee” at the Presidential Inauguration.

  • Sam Harris – The Power of Bad Incentives. A prison is perhaps the easiest place to see the power of bad incentives. And yet in many other places in our society, we find otherwise normal men and women caught in the same trap and busily making life for everyone much less good than it could be. Elected officials ignore long-term problems because they must pander to the short-term interests of voters. People working for insurance companies rely on technicalities to deny desperately ill patients the care they need. CEOs and investment bankers run extraordinary risks—both for their businesses and for the economy as a whole—because they reap the rewards of success without suffering the penalties of failure. Lawyers continue to prosecute people they know to be innocent (and defend those they know to be guilty) because their careers depend upon winning cases. Our government fights a war on drugs that creates the very problem of black market profits and violence that it pretends to solve….

  • S. G. Collins – moon hoax not. “Did people go to the moon in 1969? I’m not totally sure because I wasn’t on the moon then. Did they fake going to the moon? No, I’m pretty sure they didn’t because they couldn’t…What’s dangerous about [believing in conspiracy theories despite evidence to the contrary] is that it blinds you to the real conspiracies.”

A In Depth Reading of Rawls’ A Theory of Justice

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One of my favorite philosophy books when I was in college was John Rawls’ A Theory of Justice. I found it compelling and surprising original in its approach to ethics. However, when I began to submit a post about it on reddit, I realized that I couldn’t recall enough to be authoritative about it.

So what I thought I’d do is re-read the original edition of the book and post some thoughts and outlines here. I’ve downloaded it onto my Kindle, and I’ll try and work on it a little at a time. Over the course of the year, maybe I can have an outline that I really like.

Setting up Anki

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So I’m using Anki and spaced repetition to help me study for the CFA. Here’s some thoughts on setting it up.

1. There are a lot of formulas in the CFA that I may need to flash card. I found a good website on how to get LaTex set up with Anki at http://www.eighthourlunch.com/content/anki-setting-latex-windows-7.

2. I might need to find some good best practices to setting up Anki.

3. I am going to transcribe the flashcards from CFA Level 1 into Anki to help me get it set up.

(As an aside, I was wondering whether I could use Anki to memorize anything else in my life: details about friends, quotes, etc. Maybe I’ll create a deck called Life and just put in things I want to be able to recall.)

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Studying for the CFA Level 2

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So I’m starting my studying for the CFA Level 2. Here will be my general method.

1. Read each section in my Kaplan book quickly.
2. Do sample problems.
3. Create flash cards using Anki in areas that I have problems.
4. Do some more sample problems.
5. When I feel I’m ready, write an outline of the section.

I think this method will help me with recall and understanding for the exam.

I may modify it going forward.

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Buddhism in Every Day Life

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When to practice mindfulness:

  • When coming to a stop light, remember to breathe and arrive in the present moment.
  • When the phone rings, the first ring is to remind you to be in the present moment.  The second ring means approach the phone with dignity.
  • When paying for something, become mindful of how you are exchanging your labor for someone else’s labor and how we are all connected.
  • When entering a building, instead of taking the elevator, walk up the stairs and practice walking meditation.

Warren Buffett on Components of Stock Market Returns

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In 1999, Warren Buffett spoke to friends and business associations on the value of the stock market.  FORTUNE’s Carol Loomis distilled those talks into this article: Mr. Buffett on the Stock Market.

Here’s what I learned from this article:

  • Government interest rates affect not only the value of bonds, but the value of all investments.  If interest rates go up, the equities will fall in value, since the value of equities is inversely tied to the “risk free rate”.
  • The other long term component of stock values is after-tax corporate profits.  Now corporate profits tend to be between 4.5% and 6% of GDP.  However, since the last recession, after tax corporate profits have nearly 11% of GDP.
  • So, in a flat interest rate environment, returns on stocks should equal, roughly, inflation plus dividends plus real GDP growth.

I’ll read through some other Buffett Lettters and write up what I learn in the future.

Outline – The 4 Roads to Success

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The 4 Roads to Success

1. Desire

  • Easy desire or desire without anxiety
  • Better vs.  good
  • Practice vs. Tests
2.  Effort
  • Ambition without action is delusion
  • Effort is not limitless,  but you have more energy than you think.
  • Husbanding and strengthening effort
  • Balance and rhythm
3.  Quality of your mind
  • Monitor your thoughts.
  • Your mind is like a gated garden.
  • Seed to sprout you need to create the right conditions in your mind.
  • Can’t push a button,  but you might be able to lean.
  • Body mind connections.   Posture.   Smiling
  • Be responsible.  Don’t be a slave to your mood.
4. Investigation
  • What’s working?
  • Learning about yourself
  • Complacent? Anxious?