ct4ul4u

Epoch had an auction equivalent process (which we didn't get to implement because we didn't get to the point of being lead underwriter).

Treasuries.

The term "pop" is sometimes used to describe the immediate post-IPO jump.

A small amount of "Pop" (no more than 10 percent) isn't a bad thing. It is a result of oversubscription, which every underwriter needs in order to assure they aren't left holding the bag. It also makes stabilization (the only legal form of market manipulation) less expensive for the underwriter.

You're going to see more extreme cases of "pop" in a market with a lot of uncertainty (like we have now). This is the underwriter being cautious. Their worst case scenario doesn't appear and the IPO turns out to be underpriced.

What we saw in the late 1990's was heinous. I worked at a startup investment bank (Epoch Partners) that was intended to take some of the pop out of IPOs (and make allocation more available to genuine retail investors).

-r

Google is of a size that requires distributed teams. It's hard to hire that many top engineers in one place, particularly given their laser focus on the top of the talent distribution. They pay a performance tax for having to distribute, but they get to marshall engineering resources most firms only dream of. And their culture is very consistent.

I think this is a great move on their part. My company uses oDesk. We have a large pool of contractors through them for human judgements, but also outsource some non-critical development to oDesk contractors.

post hoc ergo propter hoc

How is this different from a combination of one time pads and steganography?

> And I wanted to add, that with C you run into (solvable but hard) `scalability' problems in terms of effort needed to cope with algorithmic complexity, much sooner.

I have certainly seen this effect. In retrospect, I wonder if this could be somewhat mitigated by real refactoring for C?

> But C is so hard to get right, that you will probably be able to use only the simplest algorithms in your C code

This is a gross exaggeration. It's not that hard to get C code right (C++ is a different story). I am unaware of any effort undertaken by skilled C programmers that failed because of limits C placed on algorithmic complexity. I am not arguing with your preference for higher level languages, just your statement that C is so difficult that it limits algorithmic expression.

C is substantially less compact and requires you to write code for things you get for free from other languages. Longer code takes more time to write and more time to read. Each feature or function point will, on average, take significantly longer to develop. On the other hand, a developer trying to write an OS in Python would also have some productivity challenges in other dimensions.

I am aware of the paradigmatic challenge C presents for many developers trained in the last 15 years. Trying to write in an OO style in C is neither fun nor advisable. Fortunately, most non-ui development is equally agreeable to other styles (although the developer may not be).

I'm not a C bigot and I like or love a number of high level languages (Python, Lisp, Haskell). I just don't think people should be afraid of C. Its closer-to-the-metal nature is an opportunity as well as a cost.

I'll close with a pointer to a great site written in C: http://www.halfbakery.com.

There are many sources of stock for stock loan. 25 years ago, the primary source was stock in the margin accounts of investors. Today, nearly every large holder of stock loans it out. The reason they loan it out is to make more money.

Virtually every broker/dealer (b/d) that holds their own accounts has a stock loan desk (small to medium sized firms frequently have their accounts an another firm's books on a fully-disclosed basis). Virtually all large index fund managers have a stock loan desk as well. The stock loan desk at a b/d will loan stock to the firm's customers from the available shares (more on that in a moment) or it will find another place to borrow the shares from on behalf of the customer. This can involve looking in a system called Loannet or merely calling up other participants in the market.

The original source of available shares was the margin accounts of customers. The amount of stock available for loan depends on the amount of funds loaned to the customers. The stock loan activity is completely invisible to the customer whose account the shares are taken. Don't want your shares loaned? Don't use a margin account. Stock loan is the financing mechanism that provides the funds loaned to you for your margin account.

Securities can also be loaned from fully-paid (non-margin) accounts of customers with the written consent of the customer. It's a pain in the ass from a regulatory and operational point of view. It's usually only done if the customer has a really large holding in a hard to borrow stock. The customer generally negotiates a share of the revenue from the transaction.

In the past 25 years, institutional investors have started to loan stock as well. The pioneers were index funds, but it has spread to most other fund types. The big institutional investors generally set up their own desk and participate in the market directly. Being a direct participant can improve their ability to borrow stock as well.

The borrowing party puts up collateral (100-110%) for the stock and the lending firm either uses the funds to finance the margin business or puts it in a limited class of interest bearing accounts (I forget the name and regulation) at a bank. The borrowing party gets the stock and promptly sells it. The amount of the collateral is trued up to the value of the borrowed shares on a regular basis, so the risk to the lender is small.

So it is clear that one reason to loan the shares is financing. The second reason is revenue.

The revenue comes from the interest earned on the collateral. The interest on the collateral belongs to the lender except for a negotiated "rebate". For most stock, the rebate is generally 10 to 25 basis points less than the overnight benchmark (fed funds). The lender keeps what they can earn over the rebate.

Notice that I said "for most stocks". Some stocks can be hard to borrow. The supply can be low because large amounts of the stock are held in non-margin accounts or by investors who don't loan it out. The demand can be high because there is a large amount of short interest in the stock already.

The negotiated rebate on hard to borrow shares can be negative, and not just a few basis points. The negative rebate for a really hard to borrow can be negative 10 percent and worse. And a negative rebate means that you're paying somebody interest to hold your money as collateral.

This can be very lucrative for index funds based on a broad index like the Russell. It's one reason index fund fees are so low.

At the other end of the scale is generally available stock. Known as GC (general collateral), loan transactions in this stock are usually initiated by a stock lender looking for financing.

From a b/d point of view, stock loan is one aspect of a business called prime brokerage. Prime brokerage is a bundle of custody, operational, financing, and loan services offered to hedge funds.

One note, the perspective I've provided is largely from the institutional trading side of the b/d business. Retail investors borrowing stock will generally see a tier of rebates (I think the most common rebate is zero).

Actually, the biggest lenders are index funds.

You both have too much faith in time and causality.

I didn't say that CAPM precisely modeled the market. I said that individual investors can't beat CAPM, meaning they can't beat the reward/risk relationship predicted by the model.

The model predicts that you can get higher returns by accepting greater variance on those returns. Even at moderate risk levels, it's easy to predict that some investors will happen to get the kind of returns you describe. Were your returns a result of your agency? Who can say.

Let's sidestep the issue of luck. I don't believe it is likely that your prior returns are a meaningful indicator of your future returns. But I could be wrong.

For a given asset, (Jensen's) Alpha is usually quite small compared to total return. How do you isolate the Alpha you identify?

I worked on Wall Street starting in the mid 80s and with and on trading desks since the mid 90s. I've built the technology for equity trading desks and program trading desks. I was the business manager for a couple of program trading desks. I've created trading products (most notably a dark pool that mixed retail and institutional order flow).

I am a big believer that individual investors can't beat CAPM and shouldn't be picking stocks. I think the ideal portfolio is a mix of treasuries, equity and debt index funds, and angel investments.

I've been involved in very successful and not-so successful efforts to outsource offshore. It takes a kind of discipline that's rare in startups. It's also not particularly compatible with lean or agile processes.

Do you have work for which iteration is not a major consideration? Do you have work which you understand well and for which you can clearly and completely communicate the requirements in written form? Do you have work for which it is straightforward to objectively test that milestones are being met and quality is being maintained?

I aspire to this, but succeed less than I would like. If you manage people, this is relevant to you.

Yes, but I'm thinking of the Facebook Like beacon.

I'd really like cookie sequestration to be a standard browser feature. By sequestered, I mean that cookies be bound to the domain in the address bar as well as the URL they are served from. So I would have different versions of the Google analytics cookie for every domain I visited.

Please tell me that you're not talking about sexual predators viewing pictures of children.

I don't think you can evaluate this by looking at the patents. If your sole business is patent suits, you're going to sue every time. If your business has paying customers, there's a chance you're going to spend more of your attention on them than your patent portfolio.

I believe this will hinge on the details of how Facebook represented the value of the securities to ConnectU. Representations of the value of a security are legally perilous. If Facebook's lawyers at the time were good, I imagine Zuckerberg will get a pass. If they missed the dots on a few "i"s or the crosses on a few "t"s, then Zuckerberg could be in for a long ugly ride.

I am not a lawyer, but I worked in the securities industry in a regulatory supervisory capacity (series 24, plus a mess of others).

Good general advice: Any time you feel the urge to tell somebody what your stock is worth, avoid the urge unless your legal department is involved.

It's not a patent troll when a competitor goes after you with patents they acquired doing R&D for real products. The patents sound like they shouldn't have been issued, but that's a different problem.

A troll has no real business other than acquiring patents and suing companies (or arranging for them to be sued).

What are you wearing?

I did this with a few people at work. It seems as if the ad is not served at all if the target population isn't over some threshold. I was not able to target 2-3 people, but was able to target 30.

The title is misleading. This isn't a global bailout. This is the European Union protecting its currency by stating that the Union will stand behind the sovereign debt of member countries. It has little to do with the rich and everything to do with preserving the EU.

As somebody who used to work in Program Trading, I suspect that unanticipated side effects of Reg NMS amplified already substantial market movements. The regulation, designed to prevent trade-through, has the effect of creating a submarket for those interested in fast execution at any cost. This submarket is very light on liquidity.

Silicon Valley has high housing prices BECAUSE of the established momentum in technology. New York is going to have high housing prices as long as it is a highly remunerative place to work. It's possible to address the housing problem directly in the case of low income residents, but addressing it for the middle class has never worked out. Better transit lets people work in the city and commute from further away, which is one way of mitigating the housing expense problem.

It seems these are lessons we must perpetually relearn.

I'm sure that type of signal is valuable, but it takes a lot more than that to make money. It needs to be combined with a lot of other signal in order to come up with an estimate of alpha (idiosyncratic return). Then you need to understand how to remove market risk from your bets (what risk factors are you exposed to and what opposing positions do you need to take to minimize them). Some of the return will disappear in market impact (movement of the stock due to getting into and out of the position). The people who do this are expensive and apprenticeship is the only road to competence (the distance between theory and practice is vast). Finally, it's a distraction from Google's core business.

I suspect that is inevitable. This is a heinous violation of the privacy of minors in their parents homes. I suspect that prosecutors will be forced to reach for the biggest hammer they have.