Investments: 1999 to 2008. Not quite what we expected.

Back in the 90s we thought of ourselves as conservative investors.

We didn't buy that NASDAQ blarney, when prices went crazy we bought less but held our index funds. We figured we'd earn 7% or so a year over a twenty year period, and maybe we might even retire.

One day. Maybe.

Fidelity still talks about that 7% a year number in their marketing materials. It's good for a bitter laugh, but really the humor is wearing thin.

Here's what the S&P looks like from 1999 to 2008 - an era largely controlled by the GOP.

This Yahoo! Finance Charts graph doesn't show losses due to fees and taxes and gains due to dividends, but it gives the general sense of how the market has done:

Click for a larger view, but you can probably see the story. It's been quite a ride, but on average pretty flatline for about 9 years. That's flatline when you don't consider inflation of course.

The trend is likely to continue downwards for a while, so we'll be looking at a flatline decade.

It used to be assumed that index funds held for at least 10 years were a pretty safe investment, but let's take a look at the longer view, again you can click for a magnified view. (Yahoo Charts are a real gem):

Ok, so things got a bit ... stimulating from about 1980 to 1995. No wonder I grew up thinking a 7% return was reasonable, even allowing for the madness of the late 90s.

Now let's drill down a bit at 1968 to 1978 -- including a gap in Yahoo's data. On this scale it's almost as volatile as 2000-2008, but over that decade things are flat to negative. Since inflation in those days ran at 8-12% the real returns were probably much worse than what we see here even after adjusting for higher dividend payments.

Stocks sucked in the 70s.


So we see that the "stocks are the safest investment" over a decade all depends on which decade you're talking about. Really, the long term safe return period is more over fifty years than ten years. So that means by the time a physician gets real income at age 30, they're already too old to bet on a 50 year outcome.

Our current retirement plans are to take up smoking, hang gliding, base jumping and heroin at age 65.

Thank you GOP. You've sure done wonders for us.

Businesses can advertise on Google Maps (hint: iPhone, GPS)

Remember that the iPhone has a GPS built-in, and is very good at displaying Google maps.

Now consider Google's new program to allow businesses to associate data with Google Maps:

Google Local Business Center

Enter your business information below. Your listing will appear to the right. This is just a first step. After this has been completed, you will be able to upload photos and videos, specify categories, payment options and business hours and much more.

If I were a small business, say a Cafe owners, I'd sign up tonight.

This will be very cool when Mobile Map users are able to specify alert criteria, so we get pinged when we pass near retailers who match our criteria ...

iPhone 2.0 not really ready for release?

Every new Apple product I've known of has been rushed out the door before it was done.

The one exception, intriguingly, was iPhone 1.0. It was way more stable than I expected.

iPhone 2.0 may represent a return to form:

Did Apple set developers up for failure? - The Unofficial Apple Weblog (TUAW)

... Anonymous developer sources are reporting that they've been poring over crash logs and discovering that the reported crash has nothing to do with their application. There's a growing consensus that Apple has released a highly unstable 'final' version of the 2.0 firmware...

If you're not in a real rush, it would be good to wait until at least the next major firmware update before buying.

I'll be buying anyway, but I've already decided I won't be able to abandon my Palm for another 6-12 months due to other iPhone limitations. So I'll be ok with a crashy device.

They'll fix it, probably faster than Apple fixed 10.5 (that took over a year).

The law of unintended consequences: iTunes, the Nordic Track, NBC, and Babylon 5

I'd file this one under 'everything is connected to everything else' -- a 21st century theme incorporating memes of complexity, emerging interdependency, and why I spend time blogging.

It began with my back.

An annoying lifelong back problem finally got serious enough that I had to do something about it. This is good. I like exercise, and exercise is what I need. Now I can make a business case for it; I can show it's necessary to keep me functional for the next twenty years. (In our family, this is all that's needed.)

So we moved the kids toys to the dining room (this was recognizing reality) and turned the toy room into a gym. We dragged the thirteen year old Nordic Track out of the attic and hauled the weights out of the garage. (Emily and I spent five years on the Nordic Rack -- we like it and used it. It's the closest I'm going to get to my once favorite sport in our new, warmer, world.)

Now, I had to figure out exercise entertainment. We had a 12" CRT my son uses to watch sports in his 3/week TV slot, that would do fine -- it even has a headphone jack. The question was inputs.

We could add an exercise Netflix, but then I'd have to replace the broken VCR/DVD player with another one that would last 3 months. Too much hassle there. Also, DVDs aren't as good as VCRs at "remembering" where one stopped watching.

I can't deal with the thought of cable TV, DVRs, etc. AppleTV rentals are too restrictive.

So the best option is to start watching a good, exciting, TV series. I don't watch TV, so it's not hard to find one. This can work now that I've finally figured out how to get video out of my old iPod.

Unintentend consequence #1: Battlestar Galactica, my first choice, is an NBC show. NBC and Apple couldn't agree on price, so it's not on iTunes. So long Battlestar, I'll do Babylon 5 instead. I wonder how their decision to forego iTunes distribution is working out for NBC. I'm sure they didn't intend this consequence. It will take years for me to work through B5.

I download a season of Babylon 5.

That's when I notice each episode is a GB or so.

I wonder what my bandwidth cap is. I wonder how much drive space I have left on my backup drives.

I think I need to accelerate my transition to a rotating pair of 1TB external backup drives (for example). I needed to do that this fall, but now I'll need to do it this summer.

Maybe I need to move forward on a bigger internal drive for the iTunes library server. The iMac is an aging PPC machine, so maybe I should accelerate my purchase of its successor machine.

This is getting kind of expensive for me, and kind of profitable for Apple. Funny how that works.

Life in the modern world is like that.

Well, now I'm really motivated to get my money's worth out of the gym.

Update: My iTunes library is now 40GB. Ouch.

Apple after Jobs: give reliability a chance

Apple has given me good value for my money. That's why I buy their stuff.

They could do better though.

In particular, they could work on reliability. Their dotMac service (.Mac) has a long record of poor quality and unreliable service.

Even their retail service has been flaky. Today the iTunes store told me:

We could not complete ... An unknown error occurred (5002) ... There was an error ...

Apple's hardware quality is industry average at best. Their software quality has been nothing to boast about (design is good, execution is average).

After the iPhone 2.0 launch debacle I wrote:

Even Apple’s discussion servers are crushed …

...In an ideal world, Apple would do some post-mortem analysis of their culture and commit themselves to being a high-reliability organization.

In the real world, we shouldn’t expect Apple to deliver mission-critical services. It’s not what they do.

Jobs is a genius, but he loves innovation, elegance, grace and aesthetics -- not reliability. In time, perhaps sooner than later, Jobs will retire. The media will treat this as a disaster for Apple.

I'm not so sure. The transition will be very hard, but in the world of Software as Service, Data in the Cloud, and distributed memory, reliability matters even more than in the old days of local drives and static files.

If a new Apple can shift their premium price points towards quality and reliability, while preserving a love for elegance and innovation, they'll deliver even better value for my money.

Whether that will translate into continued wealth and growth is another question -- one I can't answer. If I could answer those kinds of questions, I've have way too much money.

Google is done talking with librarians

Google apparently has rather cool relationships with the Librarian community.

They've decided the best remedy for misunderstanding is to stop talking ...

Google Librarian Central

...As you may have noticed, we've taken a somewhat leisurely summer break here at Librarian Central. We've been thinking about how to best communicate with you, our audience, and as a result, we've decided to close this blog in order to focus on our newsletter...

Reading on, it appears that sooner or later they might send a newsletter. Maybe.

I don't know why Google has such poor relations with librarians, but Bethany Poole has written one cold "Dear John" post.

Dapocalypse Now

The Data Apocalypse, aka the Dapocalypse, is a favorite of science fiction writers.

It goes something like this.

Some evildoer plants a data bomb deep into a compiler language. One day they pull the trigger, and Google's data stores are irreparably corrupted. It will take months of labor to restore from deliberately isolated time-delayed offline archives (Google does have these, right?).

By this time Google holds a large part of the world's knowledge, and it accounts for 40% of the metamind's IQ. The lobotomized metamind can't keep a lean mean non-redundant economy running; the economy crashes hard. Google dies in the carnage, so there's nobody to do the restore. An interconnected world crashes, war breaks out, billions die, we return to the 19th century.

Makes for an uplifting story (no Singularity extinction!), but maybe it's not so far-fetched.

I used to control my corporate data. It lived on my drive in thousands of dead-bit documents. Write once, re-read never, though nowadays full-text search brings some of 'em back.

Today, instead of a single document, I may use a loosely-coupled dynamic and shareable collection of smaller documents, linkable blog posts, and long-lived database list views and wikis. It's early going, but I think this distributed approach will win the day.

There's a catch though.

I can't back up the data distributed across the corporate LAN. Can even the very best IT department be relied on to restore a relative handful of critical rows and joins across a petabyte data store?

Restoring a document is trivial. Restoring a distributed data engram across multiple Sharepoint lists is very, very hard. Perhaps prohibitively hard. Entanglement gives meaning, but now data is becoming as fleeting and transient as thought and memory.

I'm good at backup. In perhaps 15 disk crashes I've lost maybe a few hours work. Now though, my personal Dapocalypse feels inevitable. It feels like I'm waiting for a stroke.

I really don't know what to do about this.

Update 11/25/08: Changed my mis-spelled dacopalypse to Dapocalypse when, what do you know, it happened.

Update 1/3/09: Slashdot uses the term "datapocalypse" , but not, alas, Dapocalypse.

Software as service: watch out for Data Lock

Every method of selling software has its own Dark Side.

Microsoft's traditional model favored proprietary data formats (Data Lock), feature mania until competition died, then forced obsolescence every 2-3 years.

Ad-supported software has to get us to look at the ads. If we stop looking, it will get more and more obnoxious. Data Lock helps ensure we can't escape, even as the pain level rises.

Software as a service has technical issues (Gmail was down a few days ago - again), but, above all, Data Lock is a terribly strong temptation. At least on the desktop there are local files that conversion software might run against.

Please note that while all three models suffer the Data Lock temptation, it's strongest in the "Software as Service" model.

So the Evernote example is worth remembering ...

Gordon's Tech: Evernote fails the critical software as service import/export test:

...So Evernote is not an option for my Palm to iPhone conversion, and I'd say it's not an option for anyone on any platform until they demonstrate Data Freedom...

In an important sense, this is not Evernote's fault. The startup has a large mission and limited resources. Their investors are not going to favor a single penny spent on Data Freedom, even if Evernote developers dislike Data Lock. The only way export will be developed is if customers make it an absolute requirement.

Customers don't do that.

In commerce as in politics, the fault lies within us.

Update: Google indexed this post within 30 minutes of first writing. (Evernote "data lock" is a fairly unique string.) If that doesn't give you goosebumps you need more imagination.

Update 2: A few hours later the CEO of Evernote responded, on a Sunday, with a comment to the Gordon's Tech post. They pledge serious commitment to Data Freedom, with APIs coming this summer.

I want to point out that these two things, the ultra-rapid indexing and the CEO response within hours, would be very hard to explain to a primitive from, say, 1993.

I'm also feeling chuffed now that Data Lock is no longer a novel concept. People are learning to worry, that's wonderful news.

Update 7/27/08: I warm to Evernote -- because it works now as a cache.

Update 10/3/08: Evernote has reformed, and Phil Libin has credibility again. They have an API and XML import/export. It's not the simple tab delimited format anyone can use, but that format is a poor match for Evernote's data complexity. Full credit for turning the corner!

Obama is the anti-Christ. Of course.

This meme took longer to emerge than I'd expected. Aetiology quotes an email from a cousin ...

Aetiology: Smallmindedness in small towns

...According to the Book of Revelations the anti-christ is: The anti-christ will be a man, in his 40s, of MUSLIM descent, who will deceive the nations with persuassive language, and have a MASSIVE Christ-like appeal.... the prophecy says that people will flock to him and he will promise false hope and world peace, and when he is in power, will destory everything. Is it OBAMA??...

There were no Muslims when Revelation was written.

Medical treatment of the super-rich - a psychiatrist's view

FMH responds below to a mildly annoying NYT article on psychiatrists who pander to their super-rich clientele. The discussion is relevant to so-called "concierge care", a modern mixture of luxury good and traditional service, but the temptation to seduce is perhaps strongest in psychiatry ...

Follow Me Here...: 2008/07/13 - 2008/07/20

... As a psychiatrist myself (who never, alas, treats the superrich), I was interested by the number of notable psychiatrists who seem to be making it their niche. True, treating the superrich overlaps with the issues, long considered very challenging in psychotherapy, of treating the very narcissistic. But the article is, I think, too polite about what I assume are added ingredients of a mix of therapists' voyeuristic and purely mercenary interests in taking on the extremely wealthy in particular. The patients and their struggles are not inherently more interesting; in fact, they are probably less so, on the whole, despite the pat statement quoted by a therapist of the rich that she "considered a rich person’s unhappiness or emotional anguish no less serious than anybody else’s". As the writer correctly points out, most of these patients have less of an impetus to work things through than the rest of us, and even than the rich patients of days past, more and more insulated from a recognition of personal dissatisfaction in an ever more materialistic and spiritually vacuous society as they are. Thus, a therapist treated more often as just another member of the client's personal entourage flirts with being readily disposed of if s/he too readily emphasizes unpleasant aspects of these clients' lives, which is after all what therapy is all about. And if the therapist refrains. s/he of necessity becomes a sycophantic supporter of self-indulgence...

It's very tough to be super-rich and not grow to love sycophants. If I'd been unfortunate enough to be wealthy (really, I wouldn't have survived the experience) I'd love 'em as much as any billionaire.

That's bad enough when the sycophant is your hair dresser, but it's much worse when the loyal servant is also your physician, your attorney, your accountant, or, perhaps especially, your psychiatrist. Sycophants are not only weak at delivering bad news, they become incapable of perceiving bad news. It's a necessary part of becoming a welcomed parasite ...

Electing Obama: send money, stop listening

Gail Collins mounts a spirited defense of Obama's reversals, with a concession on one point ...

Op-Ed Columnist - Gail Collins - Obama’s Flip-Flopping - Op-Ed - NYTimes.com

....Dumb-avoidance would include his opposing the gas-tax holiday, backtracking on the anti-Nafta pandering he did during the primary and acknowledging that if one is planning to go all the way to Iraq to talk to the generals, one should actually pay attention to what the generals say.

Touching both bases are Obama’s positions that 1) if people are going to ask him every day why he’s not wearing a flag pin, it’s easier to just wear the pin, for heaven’s sake, and 2) there’s nothing to be gained by getting into a fight over whether the death penalty can be imposed on child rapists.

His decision to ditch public campaign financing, on the other hand, was nothing but a complete, total, purebred flip-flop. If you are a person who feels campaign finance reform is the most important issue facing America right now, you should either vote for John McCain or go home and put a pillow over your head. However, I believe I have met every single person in the country for whom campaign finance reform is the tiptop priority, and their numbers are not legion...

I can't resist an aside on that last paragraph. We're at the start of a trillion dollar bailout of the federal mortgage financing corporations. One of the reasons we're doing the bailout is because it's too easy to buy a senator and even a big piece of a president. I've got fixes for that, but even I have given up on campaign finance reform. We need to repair our culture.

Otherwise, Collins is right. There was one Progressive in the race, and John Edwards finished third while putting Clinton in second place.

Heck, I'd go even further than Collins, and say what every professional journalist knows but dares not say.

We're not electing the President of the Wise.

We're not even electing the President of the SPCA.

We're electing the President of a nation that chose George W Bush over John Kerry. Bad enough to almost-elect W when he was a little-known governor, but by 2004 most people should have heard of him.

This is a nation where a very substantial number of people are just fine with government-approved torture, a nation where a majority think Iraq was allied with bin Laden, a nation where people think offshore oil drilling will lower their truck bill this year.

You don't get elected to be president of the United States by listening to Paul Krugman -- no matter that he's ususually right. You don't get elected by crafting policy for John Gordon. You get elected by money, and by swaying the vote of a critical sliver of Americans who, ten minutes before they vote, don't know who they favor.

Obama knows this. Obama is a Chicagoland guy. I realize that doesn't mean much outside the American midwest. Briefly, Chicago is a relatively small city at the heart of a massive, incomprehensible, sprawl of self-contained wealth and power. I drive (way) around that sucker at least once a year -- and each time I need to take another newly built ring road. Chicagoland is the world in miniature, with the core byzantine politics of an old city.

So, if you're a Progressive, or if you're simply Gen Y, you should stop listening now. You're not going to like what Obama will say and do. If you want him to have a snowball's chance of winning, you have to hold your nose, cover your ears, and send money.

Then, after the election, we'll find out what we've bought.

Even Apple’s discussion servers are crushed …

Apple’s iPhone authentication service is down. dotMac is down. MobileMe is up and down.

To add insult to injury, even Apple’s discussion servers are down.

Apple - Support - Discussions

We'll be back soon.

In an ideal world, Apple would do some post-mortem analysis of their culture and commit themselves to being a high-reliability organization.

In the real world, we shouldn’t expect Apple to deliver mission-critical services. It’s not what they do.

8/4/08: I don't expect Apple has really reformed, but I'll give them credit for some soul searching.

The descent of the PDA: Newton, Palm, Blackberry and iPhone

I turned into the parking lot of my small neighborhood AT&T outlet this morning, and there was a long line.

I didn't expect that. So, no iPhone today. If Apple is true to form they'll run out soon, and I'll have several weeks to wait. Not all bad, since Apple's initial hardware releases almost always have significant defects.

Apple is not a reliability company, just in case you didn't notice that they've cratered their .Mac service in a fumbled transition to Mobile.me. Of course Gmail was out of order too a couple of days ago. I've got to get over my boomer fetish for reliability, and remember how I lived in Bangkok in the 80s.

My pending iPhone transition means I've been working out how to transfer hundreds of notes and tasks, thousands of calendar items and contacts, and hundreds of encrypted passwords from my Palm Tungsten E2 to some combination of the iPhone and the Cloud. My preliminary investigations on the task side have had grim results.

This is going to take a while. A few years ago I confidently pronounced that I was done with my Tungsten E2. Then, after the initial iPhone disappointed, I figured I'd buy one more E2 -- but that was it. Well, now that the E2's power switch has died exactly like every Palm I've bought in the past 6-7 years I'm thinking there may be another cheapo Palm in my future. Maybe their very lowest end device.

The problem is that from a classic PDA/productivity perspective, the incredibly powerful iPhone is a shadow of my first 1997 PalmPilot/Palm Desktop, much less the uber-geek DateBk# Palm productivity app.

Which says something interesting about the nature of elegant design -- it's always contextual. From some perspectives the iPhone is a brilliant design, from other perspectives it's an empty shell.

No joke. Recently I wrote: "Both tasks and global search were well supported in the very first PalmPilot I bought around 1997 or so. From the perspective of native applications that I need all the time, the iPhone is a large regression from 1997."

Which brings me to the interesting bit of this post. The Palm/iPhone regression is part of a longer trend. The Apple Newton was a very serious productivity/calendaring/task platform. The Palm was an elegant but simpler solution to the same problem set. The endlessly incompetent Microsoft Mobile/etc products tried to tackle the same space, but suffered from truly lousy design. The much-worshiped Blackberry is significantly less elegant and competent than the Palm, and today's iPhone is yet another drop down -- even when combined with the Cloud.

I knew that the 1997 Palm Desktop/Palm device combination was exciting and impressive, but I really didn't think it was the best I'd see for the next decade!

We've just about hit bottom, but things aren't quite hopeless. Even with its currently crippled sync connector the iPhone is a powerful software platform. There once were millions of people who loved the Palm approach to basic calendar and task management. There's a niche for a small but (alas, this is essential) brilliant group of people to reverse engineer DateBk4 (for example), fully understand what it does and why, then to create a truly native iPhone/Cloud equivalent. The people who need this functionality this will pay $200 a year for a combination of iPhone and Cloud software and services. (Free hint, think about the work/personal and calendar overlay problem from day one.)

There are a million of us in the english speaking nations alone. $200 million/year, guaranteed, isn't a bad revenue stream for a small company.

Hmm. Maybe I can find a frustrated billionaire who wants a solution ...

Fake Steve Jobs ... time to move on

Steve Jobs, at best, is struggling with post-operative complications of his pancreatic surgery.

I very much enjoyed "Fake Steve Jobs", but it was time to move on. Mr. Lyons made the right call:

The ‘Fake’ Steve Jobs Is Giving Up Parody Blog - NYTimes.com

...Mr. Lyons said that he had grown tired of his fictional creation, but mainly he was worried about making fun of a real person whose health has been a recent topic of speculation. (After a reporter for The New York Times asked about his lean appearance at a conference last month, Mr. Jobs said he was healthy.)...

In addition to the humor, the analysis was often excellent. I'm looking forward to the Lyons blog to come.

There’s always another level - Korean Freestyle Slalom Inline Skating

Four million views: glumbert - Korean Freestyle Slalom Rollerblading.

In a world of 8 billion people, there is a level far above what you will ever meet in daily life.

Now we get to see it …

I inline skate, but not quite at this level.