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1. 

   jacob
   

   Expert
   Joined: Jul '10
   Posts: 3,298

   My first journal turned into a long discussion about financial market efficiency, so I decided to start a new journal. As I've gotten older, I've tried to increasingly avoid "political discussions". I call them political discussions because my aversion started with politics and because politics, in particular democracy, is an example of "failure by construction"/"best of the worst"-case because the aim is to get everyone to agree on the same personal solutions to a problem despite different neurochemistry, experience, insight, etc. When a person's argument is mainly based on individual neurochemistry (e.g. "I'm competent and responsible, so I think everybody should be free" or "I'm extroverted so I think we should have mandatory small-talk sessions and networking parties"), it may look like a productive discussion but it really isn't because it should move to the meta-level. And it rarely does...

   Ultimately, I find it easier just to learn what to do to compensate for the disagreeable idiosyncratic policies various people have made up. If ERE has taught me anything, it's that solving the world's problems (something which I few people suggested that I work on instead of finance) hasn't got anything to do with a lack of education or technology. It's simply that people don't want a solution, because they don't comprehend/see/acknowledge a problem. E.g. "I know in theory that smoking causes cancer, but I'm still young and I'll just stop before I get cancer."

   I learned that one can't reason with people whose position wasn't reached by reason. And one can't educate people who refuse to be instructed. And so on. In retrospect one can find quotes/writings to that effect dating back to the Romans. One of these days, In need to read the classics to avoid making stupid mistakes ...

   Anyway ... this was just an observation, not a starting point for a discussion of humanity. It was just to say that I'm gravitating more and more towards Harry Brown's "How I found freedom in an unfree world."

   That said, writing ERE/doing politics in general is/wasn't entirely futile [in terms of fixing the world]. I've made many more good friends than I would have if I had kept my mouth shut.

   Posted 1 year ago #
2. 

   jacob
   

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   Joined: Jul '10
   Posts: 3,298

   On a more mundane level, work is going great. Trading, that is, developing strategies, is an intellectual adventure of theories and explanations. I would say the diversity of thinking exceeds physics and it may truly be "the last liberal art". Maybe I'm still in the honeymoon stage ...

   I've found that using "vine to vine"-strategy in terms of "career(for lack of a better word)-planning" is very useful. The idea is that you have a main work and then you have a hobby with the goal of replacing the main work with the hobby. In 2006, it was physics and investing respectively. Then it became physics and ERE. Then it became ERE and sailing/shinkendo. That step was a mistake because it is hard to turn sailing or martial arts into more than a hobby (you'd have to be really high level, many dans, in martial arts to be able to spend all day productively on it ... there are maybe only a few in a given country who do that).

   In that regard I was supremely lucky to be able to turn my past hobby into full time work after writing the blog had turned into a drag of tech-support and dealing with assclowns on reddit and similar sites.

   I'm not making that mistake (of picking an impossible hobby) again. I'm now focusing on woodworking. I've found that I need some goal in order to actually motivate myself. In particular, I'm motivated by the end result and not as much the act of making 76 saw cuts in 4 pieces of wood. My hobby-goal is then to actually sell a piece of furniture I've made. That's far in the future. The first step is to populate our apartment exclusively with furniture I've made. Next step is to make gifts. Then maybe at that point I'll be good enough that, if my current full time occupation doesn't work out, I'll be able to swing to another vine of artisan furniture.

   Yeah, planning 5-10 years ahead seems to help a lot ... we pretty much are were we are today because of the decisions we made 5-10 years ago, so I need to make some good decisions for my future self now.

   Posted 1 year ago #
3. 

   livinlite
   

   Journeyman
   Joined: Feb '12
   Posts: 108

   Seems you are doing some recursive learning from past projections and failures (for lack of a better word).

   Nassim Taleb would be proud.

   I'm in a similar process: in 2009 I quit a high-paying job without another "vine" to go to and ended up wallowing in anomie from there before jumping back into the rat-race. This time around, I'm trying to think back to those decisions and tease out what I did and didn't do that I could have to put myself in a better situation that time (and this time around). We'll see where it gets to; and what I have to learn from this test.

   Posted 1 year ago #
4. 

   secretwealth
   

   Expert
   Joined: Jun '11
   Posts: 1,510

   I like the vine analogy. I did something similar with writing, which I'm trying to swing into. I think this kind of career trajectory fits Gen X/Y for two reasons: 1. We have shorter attention spans thanks to growing up with television, video games, etc. 2. We came to adulthood at a time when lifetime employment and loyalty in the marketplace went extinct.

   Posted 1 year ago #
5. 

   LonerMatt
   

   Journeyman
   Joined: Sep '11
   Posts: 168

   I have often thought about the vine type of lifestyle, and it's pretty interesting to think about how it's been applied here.

   I'd love to read a bit about you documenting how you progress with woodwork. :)

   Posted 1 year ago #
6. 

   J_
   

   Master
   Joined: Nov '11
   Posts: 353

   Great to hear again from you Jacob!
   Swinging trough the vines, learning from the swings ánd the stills inbetween is a wonderfull way of life.
   For my part I learn from the comtemplating you do about your new Job, as you intend and see it as a white hat job, not of an abuser of the tradingsystem.
   That you use your wide intellectual skills in a new environment, which gives you inspiration but also new knowledge about the world around us.
   And then your asthonishing remark about woodworking.

   You are going between abstract (astro/physics) to hands-on (development and pratictising ERE) to abstract (Quant-trading) to hands-on: woodworking.

   As ERE is a way to become free of the pressure of earning a living, how to live a fullfilling life is the next step, and your in the middle of it.

   Can that be the subject of a new (writing/researching/blogging) project of you?

   Posted 1 year ago #
7. 

   riparian
   

   Master
   Joined: Oct '11
   Posts: 341

   Thanks for sharing your process Jacob. I'd love to hear any thoughts you have about swinging between many vines at once.

   Posted 1 year ago #
8. 

   dragoncar
   

   Expert
   Joined: Oct '10
   Posts: 1,287

   I've learned to never argue with someone who's livelihood depends on their position (i.e. market efficiency with traders).

   JK! I'm glad you've found the next vine. When's the next mandatory networking party?

   Posted 1 year ago #
9. 

   jacob
   

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   Joined: Jul '10
   Posts: 3,298

   @riparian - One of the things I had to come to terms with there (the previous 3 years) was that by doing many things at once (sailing, swordsmanship, woodworking, blogging, writing a book, investing, getting a ham radio license, fixing bikes, building the garden), I usually had a "present feeling" of not having "done much lately". This was because if one does, say 5, things, everything progresses at 20% speed. Actually, because one doesn't have the same downtime as one does in a 100% occupation where one is efficient enough to get the stuff done in half the time and thus spends the other half doing nothing, using several vines means that after some time, looking back, one will have accomplished a lot... or lived a lot ... the subjective time will feel long looking backwards over a few years even as it feels short and nonproductive from week to week.

   I think I feel happiest doing just 1 or 2 things as long as I can do them 100% of the time. I think as soon as I become efficient and begin to have downtime/waiting, things become a drag and it's time to do something else.

   Posted 1 year ago #
10. 

    jacob
    

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    Joined: Jul '10
    Posts: 3,298

    http://earlyretirementextreme.com/update-1-from-the-windy-city.html

    Posted 1 year ago #
11. 

    secretwealth
    

    Expert
    Joined: Jun '11
    Posts: 1,510

    Uh, nevermind.

    Posted 1 year ago #
12. 

    boltzmannsbrain
    

    Novice
    Joined: Mar '12
    Posts: 25

    Really interesting - keep the updates coming!
    I wonder how long time you will last in the job before it gets too boring for you. I think I read somewhere that your attention span for new things lasts 5-10 years(?). Hopefully, your next endeavour will as profitable as the current one.

    Did you apply for the job or did they contact you?

    Posted 1 year ago #
13. 

    jacob
    

    Expert
    Joined: Jul '10
    Posts: 3,298

    There are several ERE readers working in "high-finance". At one point I think I made some comments about Wall Street would work better (this was around the CDO crisis) if only they'd hire more physicists to check their risk in some of the blog comments. One of them said their company might have an opening if I was interested. I said I was.

    Note that way back in time, around 2007 I tried getting into quant work in the traditional way, e.g. read/memorize Hull, Baxter&Rennie, C++, ... with the aim of ending up at JP Morgan or some such... and had gotten so far as to have a recruiter and a couple of phone interviews (working my way up the hiring process). Then Lehman Brothers and Bear Stearns happened; massive lay-offs; everything dried up, and I pretty much figured I had missed the train for this business cycle. Point being, I wasn't completely unprepared for this move---just didn't expect it.

    As I recently learned, as financial markets have continued to develop, it's now possible to do what I do without even working for a company. Other companies exist which provide infrastructure and massive amounts of real time data. Think of them as a more comprehensive/advanced version of Interactive Brokers.

    One of the problems with the "standard setup" of yahoo/google/msn finance + some random retail broker has always been in pulling down massive amounts of data and turning that into orders (that don't cost $10). Everything is designed for people to slowly click their way through. Wetware over hardware. However, this has now changed.

    You typically need a Series7 for regulatory issues. I think if I hadn't gotten this job, I would have started my own show instead.

    Posted 1 year ago #
14. 

    boltzmannsbrain
    

    Novice
    Joined: Mar '12
    Posts: 25

    Actually, where I live, it is definitely not unheard of for physicists to work at banks. Apparently, they are in high demand because of their tool box: Analytical skills, "problem crunching", experience with large data sets, programming knowledge and math as a tool rather than a theoretical thing (I'm looking at you, mathematicians).

    It seems a bit weird that business schools don't cater to these needs, instead requiring an influx of people from a completely different field.

    Posted 1 year ago #
15. 

    Chad
    

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    Joined: Jul '10
    Posts: 1,001

    The problem with starting your own show is then you would also have to do the extrovert side and sell. I just feel despicable when I sell. Makes me feel like I'm ruining humanity.

    Posted 1 year ago #
16. 

    jacob
    

    Expert
    Joined: Jul '10
    Posts: 3,298

    That's the good thing about trading (on the buy-side). No politics. You just send your order to the broker and they'll handle it for you.

    In some ways I find building trading models extremely gratifying. Suppose I have some theory/observation about the market. Now I can write a post or even an article, but seeing this is investing, people are going to treat it religiously and simply disagree if it conflicts with their paradigm or dogma. Then we can argue back and forth in a futile manner because of the lack of mutual understanding.

    Alternatively, I can simply trade the idea. If I'm right, I make money. If I'm not, I lose. Simple as that. No need to argue. Trial by fire over trial by arguing.

    It's probably what I should have done with ERE. Simply do it. Don't try to convince anyone. Just give the concrete details without any philosophical interpretation.

    Actually, I still occasionally write a blog post ... then I look at it for a bit, and then decide, nah, I'm not going to hit publish. Why suffer the aggravation? I think I've gotten a bit hypersensitive over the past year when it comes to blogging. What's the saying ... a burnt child dreads the fire.

    Posted 1 year ago #
17. 

    secretwealth
    

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    Joined: Jun '11
    Posts: 1,510

    Jacob: I'm sure I speak for a large number of people when I say we want to see more blog posts from you.

    Posted 1 year ago #
18. 

    jennypenny
    

    Expert
    Joined: Jul '11
    Posts: 1,338

    Put new blog posts on the forum for now. Start a new thread separate from this one. "Stick" it up at the top. I'd keep it "closed" and only reopen it when you want to add another post. We can start regular threads to discuss the posts instead of clogging up the blog post thread. Use your journal for more personal thoughts.

    BTW, I like the new tag line on the blog. Do you have a history of the different tag lines you've used? They are an interesting peek at your thoughts about ERE at any given time.

    Posted 1 year ago #
19. 

    Chad
    

    Expert
    Joined: Jul '10
    Posts: 1,001

    @jacob
    When you said "show" I assumed you meant managing other people's money as a hedge fund. Thus, I assumed you would have to sell people on putting their money in the fund. You probably meant you were just going to use your own money.

    Blog posts: I for one, enjoyed your philosophical posts more than the how-to posts. Not that I didn't like the how-to, but the majority of it I can figure out on my own...not that I don't like help.

    I don't blame you on being hypersensitive. The "believers" in whatever the issue is can't be reasoned with.

    You could always not allow any comments on the blog posts, as I think the the forum is enough for everyone.

    Posted 1 year ago #
20. 

    jacob
    

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    Joined: Jul '10
    Posts: 3,298

    There never was much of an issue with local (this domain) comments. The problem is comments on other sites like reddit, bogleheads, yahoo, various finance forums, and a couple of blogs. Apparently some individuals have no problem using slander to further their arguments.

    The problem is that anything I write still attracts attention. This then gets posted on various other sites (like above) and then certain people start posting crap comments again.

    I have no desire to manage the PR operation that would be required to deal with these people, so I think it's better just not to write anything or at least very much that anyone would be tempted to link to.

    Posted 1 year ago #
21. 

    jennypenny
    

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    Joined: Jul '11
    Posts: 1,338

    Hmmm, why the edit?

    I hope you'll still write even if you're not comfortable sharing it. You have a unique voice and I'd hate to see it lost. You know my thoughts on the writer v. blogger thing--no need to rehash it.

    (edited:reference removed)

    Posted 1 year ago #
22. 

    rjack
    

    Apprentice
    Joined: May '11
    Posts: 48

    I really miss your posts. I think you have a unique perspective that causes me to deeply contemplate my preconceived notions.

    Posted 1 year ago #
23. 

    jacob
    

    Expert
    Joined: Jul '10
    Posts: 3,298

    I think the "writing" format, that is, writing books is better suited when it comes to controversial topics than blogging. The personal/family costs of blogging about controversial topics is high because the blogging format and the internet makes it easy to create a mob mentality.

    Here's a fun/relevant link
    http://en.wikipedia.org/wiki/Theory_of_mind

    Posted 1 year ago #
24. 

    jennypenny
    

    Expert
    Joined: Jul '11
    Posts: 1,338

    You don't have to write with a specific format in mind (like books or blogs). Just write. Maybe the appropriate format hasn't been invented yet. If you need a reason to write, look at it as potential material for your future biography. [Ok, I'm done. Consider this my semi-annual poke in the ribs to keep writing :)]

    Posted 1 year ago #
25. 

    Scott 2
    

    Journeyman
    Joined: Feb '12
    Posts: 189

    Your blog posts are one of my favorite parts of the internet. It's a shame the trolls discourage you from posting.

    Posted 1 year ago #
26. 

    jacob
    

    Expert
    Joined: Jul '10
    Posts: 3,298

    It does seem like I've [at this point] almost completely lost my desire to write. Something similar happened after retiring from physics.

    http://earlyretirementextreme.com/breaking-up-with-your-career.html

    I have almost no direct interest in physics, but I still think like a physicist. I have almost no direct interest in writing matters (putting my thoughts into words on a screen), but I still argue internally.

    Maybe this is symptomatic to my temperament. Maybe the break-up model explains it...

    In other news:

    1) Another financial round number has almost been reached. At this point it's pure score keeping; like a runner who is hammering out miles ... passing 10 miles, now 15, now 20, ... and so on. (I currently count in increments of $50,000) But just keeps running.

    2) I've started making wine^H^H^H^Hvinegar. After much adding and subtracting prices, it turns out it was just as cheap to get the kit as DIYing the containers and buying the chemicals separately. This should eliminate the need for beer money. BTW, my first batch is an apple wine/hard cider. My next batch will be either a potato wine or a coffee wine.

    3a) Once again, for the third time, I've started looking into buying a "whole in the water into which one pours money". Crewing allows one to sail for free (or the price of homemade cookies) but it does not come with the appreciation of fixing and paying for things that break all the time. In a way I feel like the independence and self-reliance that's associated with owning a boat is similar to the difference in moving out from home. Somebody stop me!

    3b) After finishing the ERE book, I spent some time looking for the next large project (which turned out to be a quant job and not the expected great bike ride across the US). It's tricky to find large projects which I can do on my own. The reason lies in the definition; I need a specific goal. "Let's do something random and see what comes out of it doesn't work for me." One such project may be to build a boat. Apparently it takes about 1000 hours per ton. Hence, a small 20 foot microcruiser would take 1-2 years to build. That's reasonable.

    4) Except for still struggling with dovetails (way too much fitting!!) woodworking is proceeding splendidly. At least with mortise and tenons I can now make one cut and have the fit slip in the first time 4 out of 5 times. That's tremendously satisfying. I'm almost done with the bookshelf now. Next projects: A yarn tower, a tool stand/cabinet, a blanket chest. This should keep me occupied for the rest of the year.

    Posted 1 year ago #
27. 

    sshawnn
    

    Journeyman
    Joined: Mar '11
    Posts: 262

    The two best days of a boat owners life.....the day the boat is bought, and the day the boat is sold.

    Building one is intriguing

    Posted 1 year ago #
28. 

    Scott 2
    

    Journeyman
    Joined: Feb '12
    Posts: 189

    Excess money in the bank does nothing for you. If you want a boat and have the resources, get a boat. Buy used and smart, be prepared to sell when you are tired of it. Total cost of ownership will be a blip on your score card.

    Posted 1 year ago #
29. 

    bigato
    

    Master
    Joined: Mar '11
    Posts: 919

    Maybe you could have an used one before you decide if you really are gonna build one. If you buy well you can always sell. You will build a better thing after owning one. Because one year of work is a lot.

    Posted 1 year ago #
30. 

    J_
    

    Master
    Joined: Nov '11
    Posts: 353

    You have a (very) big Lake on your doorstep, so choose not too small. I mean the length of your boat you will possible build. I would say make it 25 foot long (lenght gives speed). If you do it for sport/adrealine it will be a sailing boat, if DW is also interested make/buy/finish a motorsailer.

    Since two years I have a Marina 75 (GRP hull, wooden deckhouse build by Jutahela Finland) of 1974. I bought it for the price of its just new build in diesel motor. And then I repaired everything. Working and pottering around with it gives me lots of pleasure. (In Canada there are some for sale)

    Posted 1 year ago #
31. 

    secretwealth
    

    Expert
    Joined: Jun '11
    Posts: 1,510

    I would really warn against building a boat. An uncle of mine who had been a lifelong electrician and had worked building/repairing commercial ships his entire life spent the last 8 years of his life renovating an old Norwegian fishing boat. It took a lot of time and a lot of money, and the amount of expertise involved in various fields floored me. He had built several boats for other people and two for himself before, and still the last boat took a lot of time and energy. I can't imagine a non-specialist doing it alone or without close supervision.

    But I can't even build a box, so I may not be the best person to listen to on this issue.

    Posted 1 year ago #
32. 

    Mo
    

    Master
    Joined: Jul '10
    Posts: 442

    If you get close to buying a boat, just post a link or pics here and I, and perhaps others, can respond in the typical raincloud, debbie-downer fashion and point out all kinds of things that could go wrong with it. That may just make you want it more, but at least you will have really tried to be talked out of it.

    Posted 1 year ago #
33. 

    jennypenny
    

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    Joined: Jul '11
    Posts: 1,338

    I think building a boat could be a nice combination of your interests in sailing and woodworking. You could rent any cheap space for construction as long as it had reliable power and good ventilation. Would you do it yourself? It's easy to find people to help when you turn over the hull, but what about when you're building the hull? At 20' wouldn't you need a second set of hands occassionally?

    Posted 1 year ago #
34. 

    jacob
    

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    Joined: Jul '10
    Posts: 3,298

    FWIW I'd definitely start very small and work my way up.

    Posted 1 year ago #
35. 

    jacob
    

    Expert
    Joined: Jul '10
    Posts: 3,298

    http://earlyretirementextreme.com/update-2-look-ma-no-car.html

    We sold our car. Some rants the semantics of the word retire (I just never learn, do I?). Comments on investing and health insurance. A few comments on home production.

    Posted 10 months ago #
36. 

    teewonk
    

    Apprentice
    Joined: Jan '11
    Posts: 94

    Thanks for the post. How did you learn to make wine?

    Posted 10 months ago #
37. 

    riparian
    

    Master
    Joined: Oct '11
    Posts: 341

    Oh, Jacob. I have a beautiful boat project for you. It's even not far away. :)

    Posted 10 months ago #
38. 

    pooablo
    

    Journeyman
    Joined: Aug '11
    Posts: 189

    Hey Jacob,

    I see that you and your wife may look at buying a house. If you have any questions on the lending side and the financing process, I would be happy to answer them for you and give you my perspective as a commercial banker. The rules may be different between Canada and the US but I can give you a run-down of the overall process.

    Cheers,

    Pablo

    Posted 10 months ago #
39. 

    jacob
    

    Expert
    Joined: Jul '10
    Posts: 3,298

    @teewonk - Lots of websites. It's like baking a bread but without the flour and without the oven which makes it correspondingly easier.

    @riparian - What kind of boat and where?

    @pooablo - For a primary residence I was thinking a 100% cash deal. The reason would be to diversify heavily away from the interest rate market (no spread between the rate I'd be paying an a mortgage and what I could possibly get by investing the money elsewhere). It would also save on fees to set up the loan right, right?

    Posted 10 months ago #
40. 

    evolution88
    

    Novice
    Joined: Jul '12
    Posts: 3

    Jacob, unless you can't generate more investment return then your mortgage then it's worth buying cash. Currently, you can get 10-15 year mortgage at 3% interest. That's almost free money...

    Posted 10 months ago #

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