2009-06-26 (Friday) by Gregory Tucker.

http://blogs.bnet.com/intercom/?p=2478&tag=nl.rSINGLE

• University of Phoenix Online enrollment up 20%
• Twice as many people took online courses compared with 5 years ago

I graduated from the University of Phoenix Online program in June 2008, and I have no shame in admitting so. The instructors were knowledgeable and experienced, the coursework was challenging, and I learned a great deal.I believe the traditional programs have a number of challenges:

• Costs: it costs a lot to maintain campuses and facilities.
• Tenure: the tenure system serves only to protect academics from the real world. Tenure is specifically not designed to serve the interests of the students.
• Purpose: In many disciplines, the purpose of obtaining a Ph.D. is to go on to teach other Ph.D.’s. It is a self-fulfilling cycle that serves little purpose.

It is interesting that Jack Welch has decided to start his own online MBA program. I believe it will be a raging success.

Posted in Business, MBA | Print | 2 Comments »

2008-07-14 (Monday) by Gregory Tucker.

This weekend excited me for a couple reasons:

1. I received my transcript in the mail. I am officially an MBA.

2. I passed the ITIL v3 Foundation exam on Saturday. I already had the V2 certification, so this updates my certification to the latest version of the standard.

My next step on ITIL is still TBD. APM Group has still not produced information or training on the higher certifications for ITIL V3. I will not pursue advanced certifications in ITIL V2 right now.

Posted in ITIL, MBA | Print | 3 Comments »

2008-07-14 (Monday) by Gregory Tucker.

<i>Fannie and Freddie are now officially bailed out</i>

For background, read this article.

1. Treasury asked Congress to increase line of credit
2. Treasury asked Congress for power to buy their stock
3. The Fed opened their discount window lending facility to the GSEs

All three options (especially #3) provide short-term working capital that will forestall a credit panic in both companies. Basically, if lenders (bond buyers) believe the companies will soon fail, they will stop buying bonds. These moves will persuade lenders that the companies can make good on short-term loans for now, allowing the companies to keep operating.

At the same time, the moves do not put either the Fed or the Treasury on the hook for entirety of the bad debt. This assuage foreign lenders, who would otherwise slow down buying treasuries because the federal debt would have doubled overnight. At the very least, Uncle Sam’s cost of borrowing would have increased dramatically, because of the risk premium.

Nevertheless, the Market Ticker article confirmed that the “zero risk” nature of US treasuries has already evaporated. Default Swap Options (essentially insurance contracts against bond defaults) on treasury debt doubled in price last Friday. Similarly, the 10-year bond moved up 15 basis points (0.15%) in one day last week. Markets are starting to get the idea that 7 years of fiscal recklessness, massive indebtedness (brought on by aggressive foreign ventures and imperialist overreach) and virtually total lack of regulatory oversight  has put us into a financial position where we may not be able to meet debt obligations.

And we haven’t even started talking about state, city, and county debt. Bill, we miss you even more now–we could have lived without that whole Monica thing, though. Does anybody remember 10 years ago, financial markets were reeling over the possibility that they didn’t know how to value the risk on corporate debt, because the market for “zero risk” US treasury debt was about the evaporate? Uncle Sam was running surpluses and no longer need to issue 30-year bonds. Seven years unrestrained Milton Friedman neoconservatism has brought us to our knees. After reading Naomi Klein’s <i>Shock Doctrine</i>, I realize this was exactly the point. The Republican Party neocons couldn’t privatize Social Security or Medicare, but this impending fiscal shock will allow them to accomplish this and more in one fell swoop. Freidman is laughing in his grave, and Cheney is no doubt giddy over the prospect of our federal government defaulting on its obligations.

Regardless, Freddie and Fannie are not “bailed out”. At most the current actions throw a 3-6 month lifeline to the companies. (Add another 3-6 months, and the problem will be entirely that of Obama. We will let him take the blame for this mess.) The problem lies in the fundamental profitability of its underlying loans. The firms’ ability to collect on its loans is much lower than its outstanding debt. This won’t change for the next several years.

Posted in MBA | Print | 1 Comment »

2007-07-06 (Friday) by Gregory Tucker.

Apple and AT&T stocks appear to be doing well as a result of the iPhone launch. However, superior returns are always accompanied by greater risk. However, Steve Jobs has a knack for understanding risks and making wise decisions that maximize return while minimizing risks. Napoleon Boneparte was exceptional in this regard–he was not afraid of turning away from battles he possibly would not win.

In Apple’s case, the screen technology is new and untested. They could incur significant replacement and repair costs if there are unforeseen problems. Additionally, given the hype, the size of the product launch was larger than anything Apple had done before. There were logistical issues building and distributing a significant number of units in a short period of time. Additionally, there was a requirement to train both Apple and AT&T staff on the product prior to launch–with limited availability of product for training purposes.

All this required significant investments by Apple and AT&T that could have been wasted had the product had the product flopped. AT&T stores sold out and Apple stores seem to be selling well. There were activation problems with some units, but customers seemed to be tolerant of the glitches.

Posted in MBA, Technology | Print | No Comments »

2007-06-26 (Tuesday) by Gregory Tucker.

I have purchased a term life policy (actually three policies), and I believe in their value, but I feel the industry tends to oversell life insurance.

1) They prefer to sell you whole life, which attaches investment options to the term life policy, because they make A LOT more money on them.

2) They tend to sell you a single policy, even though your need for life insurance diminishes as your dependents get older.

I purchased three policies on myself of the same value: a) 10-year, b) 20-year, and c) 30-year. Hence my coverage diminishes over time, along with my wife’s need for coverage.

Posted in MBA, Family | Print | No Comments »

2007-06-15 (Friday) by Gregory Tucker.

Live Science ran a brief article about the Full Moon phenomena. It is still unclear whether violence increases during a full moon, but the current research suggests there is little to the rumor.

The article makes the observation that our expectations influences our perception. If we expect that everything President Bush does is wrong, then we interpret all political news in a way that confirms our bias, and we ignore news that refutes the bias. Similarly, if a doctor sees a gunshot victim during a full moon, he or she automatically assumes it is because of the full moon.

Many doctors and policemen swear to the full moon hypothesis, even though there is no statistical proof to it. According to Bruce Scheier (here), humans are notoriously bad at calculating statistics. We are drawn to the new and novel, but we become desensitized to the ordinary. The fact that full moons are not ordinary probably makes them stick out when something unusual does occur.

Original article

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2007-06-09 (Saturday) by Gregory Tucker.

It is hard to distinguish the difference between use or misuse of statistical correlations.

1) There is a desire to try to manipulate the independent variable to control the dependent variable. Many people believe (falsely) that antioxidants cause us to live longer, so they start popping antioxidants pills. This is a misuse of the correlation. Antioxidants are present in fruits and vegetables, which are beneficial for good health and longevity for a variety of reasons.

2) There is the temptation to use the correlation as a predictor. This is what the British resort town appears to be doing. In my opinion, it gets down to the confidence in the correlation. If you could prove there is a 0.0001% chance of this correlation occurring randomly, then I would use the correlation as a predictor. If there is a 10% chance of random occurrence, then I would ignore it. How far back did the resort town analyze the data? How strong is the correlation? What is the probability of random occurrence?

I think that everyone in this class now has enough theoretical background on statistics to ask these questions. (I doubt most of us–myself included–will be cranking out statistical reports when this is all done.) We should not accept the opinion of a single statistician trying to make a name for himself, or a single news outlet trying to sell a headline. Let’s face it: running numbers all days is dull business. If you discovered a correlation, even a weak one, that was novel and capable of getting coverage in the press, wouldn’t you do it? And the press loves to run novel and interesting stories like that, even if the correlation behind it is weak–in part because the journalists have no clue how to analyze the statistical data or question the statistician.

Specifically, I believe there is probably truth to correlation between full moon and behavior. I think it is not purely coincidence that menstrual cycles are equal to the lunar cycle. I am not saying the full moon causes either one–blowing up the moon with ten-thousand nuclear warheads won’t change anything. I am saying that we evolved with the lunar cycle and it is embedded in our DNA.

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2007-06-09 (Saturday) by Gregory Tucker.

Problems are issues in the infrastructure or applications that cause (or potentially cause) one or more outages, or Incidents. The root causes or Problems can be all over the map and just about anything.

For example, a printer consistently jams the paper. The root cause may be an improper paper type is loaded, or the roller needs to be cleaned every 3 months, or it may be a consistent problem with this model printer. The solution may be training, periodic maintenance, or replacing the printer. Based on the cost of lost productivity, and the costs of the potential resolutions, you can determine how you should proceed.

Sometimes the Problem resolution is merely a firmware update, which is free. This is a relative no-brainer. Sometimes the resolution is upgrading the memory, or expanding the hard disk storage. Sometimes more training is required. Sometimes you decide to tolerate the situation and document it as a known defect–the downside is less than the cost of fixing it.

The main sources of Incidents will vary from one company / environment to the next. That is why you want to track your Incidents and analyze them. There are some rules of thumb. About 60% of all outages are self-inflicted–IT makes a change. That is why a strong Change Management process is required, in order to review, prioritize, authorize, and schedule changes before they occur. Change Management goes hand-in-hand with Release Management, which is automating changes and the monitoring of changes in the production environment. IT engineers will often make changes without authorization, because they think it is quick and dirty and won’t break anything. Most of the time you cannot catch them, unless you have well-developed systems and processes for Release Management.

Posted in ITIL, MBA | Print | No Comments »

2007-06-09 (Saturday) by Gregory Tucker.

The latest issue of Businessweek discusses the plight of Pepsi and Coke in India. Both are experiencing public relations issues surrounding contamination of their products with carcinogens that is somewhat above acceptable levels in the EU.

There is some abuse of the measurements provided by an independent, watch-dog group. The Indian government does not set standards, which is why they quote EU standards. Moreover, the levels of contamination are far below what most ordinary citizens receive drinking tea (or water) from tap water, which is a regular occurrence. Therefore, singling out Pepsi and Coca Cola products appears to be a xenophobic or nationalist reaction.

On the other hand, when you buy bottled water, as opposed to drinking tap water, what are you really buying except the assurance that it is controlled for quality? And if it isn’t controlled for quality, shouldn’t you feel deceived?

Businessweek Story

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2007-05-18 (Friday) by Gregory Tucker.

Daily stock movements are random. Technical investing, in which you try to take advantage of short-term patterns of stock movements, is a fools errand. Technical investors have defined a number of patterns, such as momentum, breakouts, etc. Similar patterns can be seen in purely random processes like flipping a coin, so these patterns are useless for determining future stock movements.

Stocks do trend upwards over time. The long term trend for stocks is approximately 12%, which is significantly higher than any other (non-entrepreneural) form of investment. However, short-term movements are random and you can see significant downturns in the short term. Therefore you should only invest in stocks money you will not require for 5 years.

For unsophisticated investors like you and me, the markets are efficient, which means that all known (and anticipated) information regarding a company is already factored into its stock price. Therefore, throwing a dart at a list of companies on a dart board is as good a stock picking method as any.

There is only one strategy for maximizing return while minimizing volatility. It is called asset allocation. Asset allocation is a very important concept, but I don’t have time to cover it right now. Please research it, because the theory is relatively easy to understand and implement. The secret to success is to not panic, even when faced with 2-3 years of losses.

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