Harry Chen Thinks Aloud

Until it stops going up. Based on my understanding, the uptrend of oil price is mainly caused by speculative trading on the market.

If you’re looking for evidence oil’s surge is the result of a speculative bubble, look at the astronomical trading statistics on energy exchanges. Bill Stone, PNC’s chief investment strategist, notes today that the average daily trading volume in energy futures so far this year is $138.3 billion. That’s a 61.6% increase from 2007 and a 3,000% increase from 1997.

I would note that much of this increase might be the result of technology rather than evidence of a bubble: Sophisticated computerized trading systems make it much easier to try to squeeze out extra profits by buying and selling contracts rapidly throughout the day.

What can we do? Nothing. Just sit tight until the price comes down.

Except the commodities, everything else looks cheap. Given that the economy is kind of under the weather, I think it’s an excellent time to invest.

Here is my logic: the future of our economy can only either go up or go down. It has only two possible outcomes. If it goes up, then start investing today will give you a better return in the future. If it goes down, your money in the bank probably won’t worth much anyway — the purchasing power of your savings would be reduced due to inflation.

When everyone is scared, it’s time to be greedy.

The price of New York City apartments skyrocketed in the past decade. Not only people are paying millions for apartments, they also spend millions to renovate and remodel them. While money may get people expensive apartments, but it can’t eliminate the mental stress of home renovation.

Julia Kim rapped her spiked Gucci heels along the floor of a Midtown furniture showroom earlier this year as she approached a $30,000 custom wraparound couch that will be the centerpiece of the Manhattan co-op apartment she plans to share with her fiancé, Stephen Rushmore.

This purchase was just one of many steps in the journey that began more than a year ago when Rushmore [and] Kim decided to buy a duplex just off Park Avenue for $6 million.

Indeed, even after paying top dollar for a luxury apartment, most buyers see the need for more work. Like Rushmore and Kim, they often embark on costly and lengthy renovations intended to reflect not only their own taste but also their ambitions to find a perch in the social and economic swirl of today’s Gilded Age.

In fact, it’s more stressful to own expensive homes because you have to do extra works in order to live up to the social expectation.

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BusinessWeek reports Microsoft research scientists are using technology similar to spam blockers to attack HIV, the virus that leads to AIDS. This approach came about when Microsoft scientist David Heckerman discovered similarities exist between spam messages and HIV.

From Heckerman’s perspective, HIV is like a cagey spammer. After attacking a cell, it injects its own genetic material and proceeds (much like a spam jockey who has commandeered an unprotected computer) to manufacture thousands of copies of the virus. It’s a notoriously sloppy copier, but that adds to its vigor. Each mistake launches mutant viruses into the system. Many fail. Some, though, survive–and resist the drugs.

… the connections between spam and HIV boil down to mathematics. He analyzes both scourges by studying statistical relationships among their ever-changing features. Consider the word “Viagra.” Sometimes it shows up in legitimate e-mails. Often it appears in spam. If researchers study thousands of e-mails, they can calculate the percentage of e-mails with that word that are spam. That’s one clue. But the spam-filtering machine needs to know more than that. What other features in an e-mail signal that it’s spam? Are certain fonts particularly spammy? What about e-mail addresses or types of punctuation? The trick is to figure out which combinations of these features identify an e-mail as spam. Each decision can involve thousands of variables and millions of different calculations.

When he brought his plan to Bill Gates, the company chairman “got really excited,” Heckerman says. Well versed on HIV from his philanthropy work, Gates lined up Heckerman with AIDS researchers at Massachusetts General Hospital, the University of Washington, and elsewhere.

This is a classic example of technology cross-fertilization. Many hard to solve natural science problems involve statistical analysis. Since computers are extremely capable of performing this type of tasks, advanced computer science technology like spam blockers can be exploited to solve non-technology problems like detecting HIV. I think we see more of this kind of innovations in the near future.

Original Story: Using Spam Blocker To Target HIV, Too

The Consumer Price Index (CPI) report shows food price in the US rose 0.3% in July 2007. The price for food away from home (e.g., food in restaurants) increased 0.5%. The price for food prepared at home increased 0.1%.

In the past year, food price are up 4.2%.

Conclusion: it pays to prepare food at home and dine out less.

Source: MarketWatch.com

The concept of self-branding is nothing new. Politicians brand themselves to get voted; movie stars brand themselves to get public attention. In the age of Google, YouTube and Facebook, self-branding is an important skill that every career-driven individuals must pay attention to.

I came across this concept twice in the past few days. First time, when reading the bookmark “The World is Flat” by Thomas L. Friedman. Second time, when reading the article “Creating Brand You” by Diane Brady in the BusinessWeek magazine. What has gotten my attention is that in the age of Internet, self-branding is a strategy that is no longer exclusive for the rich and powerful, but also is available to anyone who has an Internet connection and knows how to use a mouse and a keyboard.

What is Self-Branding?

Think yourself as a product. Self-branding is to use branding tools (e.g., strategies, tactics, communication messages, blogs, photos and videos) to maximize your own image. “Brand You” defines who you are, how you are great and why you should be sought out. Self-branding is to create your reputation in a targeted population — which may be your colleagues, potential clients, future employers etc.

Why is Self-Branding Important?

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The US Dollar is trading historically low against many major currencies. Few questions come to my mind: (1) How did we come to this situation? (2) Who can and can’t benefit from a cheap US Dollar? (3) Should small investors be worried about a cheap US Dollar?

How did we come to this situation?

According to The Economist article, the US Dollar is trading historically low for three key reasons: high oil prices, a weak US economy and a troubled US credit market.

Who can and can’t benefit from a cheap US Dollar?

Individuals and companies benefit differently from a cheap US Dollar. For individuals, tourists travel in the US from countries with a strong currency can benefit. Travelers from Canada and EU find everything to be cheaper in the US. On the other hand, US tourists who travel abroad face a complete oppose situation — everything is more expensive abroad than at home.

A cheap US Dollar can help US companies and depress the economy of foreign countries. US businesses with an international market can benefit greatly from a cheap greenback. This is because the price of their exports are now more competitive than those from countries with a strong currency. Developing countries whose economy depend on exports to the US may be hurt by a cheap US Dollar — a weak US economy will demand less imports.

Should small investors be worried about a cheap US Dollar?

In general, small investors in the US shouldn’t be worried about a cheap US Dollar, assuming that their investment portfolios are diversified and are aimed for long-term investment. Currency exchange rates are cyclical — the US Dollar was the king in the late 90’s. It’s only a matter of time for the US Dollar to come out of its low (the question is when). Meanwhile, I think investors should continue to invest in the US stock market, in particular in S&P 500 companies. The profits of US national business may be hurt by a weak US economy, but multinationals should do relative well because of their diversified international markets.

Do people always say yes to free money no matter how small it is? The ultimatum game is designed to answer this question. Economists often believe that any financial gain, however small, is worth having. Psychologists, on the other hand, disagree with this presumption. So who is right?

Dr. Terence Burnham of Harvard University recently gathered a group of students of microeconomists and ask them to play a modified version of the ultimatum game. A theory that this study tries to prove is that people often reject free money in order to prevent their competitors from getting ahead. This rejectionist strategy is not irrational, but differently rational.

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Nintendo announced a new game controller called Wii Balance Board. This new controller is specially designed for games that involve physical exercises.

The centre piece of the whole shebang is the Balance Board, a device that looks a bit like a slim set of bathroom weighing scales. By applying pressure to it (by standing or pushing with your arms during press ups etc.), it can measure your actions and relay them to your Wii. Examples showed stepping, push ups, hula-hoop motions, heading and dodgying soccer balls, dancing, yoga and simple ball-rolling exercises where weight is shifted from one foot to other.

I think this new controller will further push Nintendo’s market share. First, it will encourage more people to buy Wii just because they want to exercise while being entertained by video games. Second, parents will be more willing to buy Wii than other game consoles because Wii has a healthier image. Third, Wii’s innovative game controls are user-friendly to all ages.

Related links:

• Nintendo Wii Balance Board gets you stepping in upcoming Wii Fit title
• E3: Nintendo unveils Wii Fit and Balance Board
• Wii Fit (youtube video)