Everything so far has exceeded my expectations. I still believe my job is as good a fit for me as I can imagine. I got my team assignment on Wednesday — I’m trading congestion revenue rights in California. I’ll have to explain what that is and why I want to do it in a future post. Living across the street from work has already proven useful and I like my coworkers, especially the group of 8 others who started with me.

Better yet, there’s a gorgeous national park 15 minutes from my door. I heard that the Potomac is nasty and polluted, and it probably is near the city, but if you head straight north from Vienna you hit Great Falls National Park which is gorgeous even by Utah/Yosemite/Glacier NP standards, and has some very good outdoor rock climbing options (and I picked a good time of year to move in). Ten more minutes further north hits Earth Treks Rockville, a solid indoor climbing gym open until 10pm, with a good community of members. Also, a good friend of mine and hardcore mountain biker has some downhill trails in the backyard of his family’s house out in the country… but real biking may have to wait till spring when I can afford a new bike.

Now I’m on the patio of a bar on Dupont Circle in perfect weather (enjoy it while it lasts!) finishing up computer errands (opening a bank account) and getting ready to meet a mix of new work friends and new/old college friends at a ridiculous happy hour in Adams Morgan — 50¢ draft miller light starting 5pm, price rising 50¢/hr. Then to amazing-looking Ethiopian food at Meskerem, and choosing from a number of bars/clubs/house parties to hit afterwards.

Apparently this is the “Right Coast” because “best” doesn’t rhyme with “east.” Could be worse :)

It’s highly relevant to what I’ll be doing over the next few years and to probably 30% of my conversations with people these days — energy policy. I think everyone would benefit from staring at its many views for 20 minutes. Especially people who think wind and solar (or hydro!) will save us sometime soon.

I wish I’d built it.

After taking some finance courses from accounting through derivatives pricing it seems like the same thing holds in finance. Mathematical models of finance are all well and good (actually, most have crippling limitations that a lot of people choose to ignore), but when it comes to practicing finance, what you really need to understand are transaction costs, taxes, and regulation.

As a concrete example, check out this part of an April speech by the current Director at our SEC who regulates mutual funds, including money market funds. Money market funds try to keep their price (like a stock price) at a constant $1.00 per share. When the fund earns money, investors either get a cash payout or more shares and the value of each share stays the same. They try really hard never to lose money. However, the fund’s price obviously fluctuates a little as the bonds and other investments they hold change. They’re not required to tell you this until the change is greater than 0.5% (i.e. the value becomes closer to $1.01 or $.99 than to $1.00).

Andrew J. Donohue, Director, Division of Investment Management, U.S. Securities and Exchange Commission (April 2, 2009):

[T]his lack of sensitivity to volatility affords investors, particularly large investors, the opportunity to take advantage of the fund and its other shareholders. An example might be helpful here. Assume a money market fund has a loss on investments of 0.40% so that its NAV is now $0.9960, which is $1.00 and within the one-half percent deviation permitted under current rules. If investors who own 25% of the fund redeem at $1.00, the NAV is now $0.9947 or $0.99 per share. Sophisticated investors know this dynamic and will redeem their shares in the fund quickly, leaving the loss for the remaining shareholders. What had been a loss of 40 cents on $100.00 for remaining shareholders is now $1.00 on $100.00 because they did not abandon the fund quickly enough. I question whether this is appropriate and whether it increases the possibility and probability of a run on a money fund.

… As with the previous example, an investor purchasing at $1.00 when the NAV was $0.996 had no way to know that he (she) was at risk of losing 1% in one day merely because of redemptions by others or other minor valuation moves.

I think it’s funny that the proposed solution to this problem is to change the target value of money market funds to $10.00 instead of $1.00. This would probably be “good enough” because if someone abusing the system could only make 0.05% (vs 0.5% currently), it usually wouldn’t be profitable after considering transaction costs. But really, are these people using computers so old that they can’t just add more decimal places to $1.00? My guess is there’s some rule that says something like “only price changes of more than 1/2 cent must be reported to investors,” and this amount happens to be 0.5% of $1 (deemed “too insensitive”) and 0.05% of $10 (deemed “acceptable”).

Regulation is goofy.

A question I remember wondering a lot growing up as a math major (and hearing repeatedly from others) is “What the heck do managers actually do?” One of my readings for class provides the best answer I’ve heard, and not only that, I think it’s a good answer.

The Manager’s Job: Folklore and Fact (PDF), by Henry Mintzberg in 1990.

In short: people think managers organize and plan things, but in practice they are information arbiters. Their formal authority gives them several important interpersonal roles, which give them unique perspective and information, which give them important decision-making responsibilities. A key insight is that most of the information that flows through managers is verbal (for a few reasons, read the article) and is very difficult to organize in a formal/written system (which is what we’d need to do to replace them with robots or otherwise outsource them).

Also worth noting: managers in the real world are highly reactive and rarely able to actually plan or reflect: “superficiality… is an occupational hazard of the manager’s job.”

Also, the Bay Area — I find myself in a place where it’s easy to meet accomplished mathematicians, adventurous nature-lovers, ambitious world-shapers, and genuine, friendly people. It’s easy find people who miraculously combine all of these traits. It may sound arrogant to say I feel like this is where I belong, but being here, surrounded by people with the qualities I strive for, is a humbling and inspiring experience.

Welcome, Deloitte, and recruiters yet to visit. In the end, we all want a good fit, and I’m glad we have so many ways to learn about each other.

On June 21 I start a 1-year Masters of Science degree at Stanford University in Management Science & Engineering. My job here is great and I love Park City, but for the next year there’s no place I’d rather be.

Before that, from May 15 – June 18, I will participate in an Mountain Instructor Course with the National Outdoor Leadership School. This will cause me to miss two of my friends’ weddings but, again, there’s no place I’d rather be.

I’m totally psyched about this next chapter…

It made me realize how great business is. For a liberal arts grad it can be scary that there are no guarantees that we get to keep our lifestyle. The U.S. does provide Welfare, but most of us would consider anything that doesn’t pay at least $25,000 and also make a noticeably positive impact on the world as failure. But it’s liberating to know that in the world, there is a higher grade than an “A.” You can do absolutely as well as you can do, and you can apply any skills you can muster. On a philosophical level, I’ve always loved the quote (from a song)

I don’t need to hear your answer.
I just need to you feel like there are no boundaries at all.

What you or I do or say or decide today or tomorrow is pretty much OK with me. What matters is that we have faith that anything is possible.

In college when I felt stressed I used to drive up to the mountains overlooking Los Angeles and just stare at the city. I could draw a line in the cityscape between Los Angeles County and San Bernardino County. The line makes tremendous difference to anyone who lives there and wants buy a house, send their kids to school, talk to their neighbors, or find a job.

But the line is not real. It’s a man-made fiction that has a profound immediate impact on many but, at the same time, is trampled every day by the bustling activity of the life around it. Government has some influence based on how the highways are routed and lines on maps, but the fact that houses extend for 100 miles in nearly every direction from LA is due not to the WPA but to 20 million individual people building their lives. I love LA despite despite how disgusting it can be because it creates dreams and gives rise to so much that would seem impossible.

It is easy to see from the perspective of the mountains, above the smog, far from classes, and amid the scent of desert sage which I will always love.

I took my job at Zane Benefits hoping it would teach me about business and give me chances to meet important and wise people. It has. I dress better, work better, and manage better than I did 9 months ago. I sound infinitely more competent on the phone. I’ve also met a bunch of notable people.

Utah is incredible. When I leave here, it will only be a matter of time before I come back. Whether I’ll be unshaven, unwashed, and in a tent, or preppy-looking and enjoying my vacation home in the mountains depends on a few things… I’m hoping for both.

Postscript – the nay-sayers who complain that having a hot tub is more trouble and money than it’s worth are wrong.

So nobody ever told you, baby
how it was going to be
So what’ll happen to you, baby
guess we’ll have to wait and see…

I was amused when my roommate, friend, and co-worker Ben Dilts decided upon being hired as the second employee at our company that his appropriate title was “Only Technology Officer”… as opposed to CTO.

I’m now Only Operations Officer. and about 6 other titles. The problem is, unlike most companies with only a handful of employees, we’re legit. Today I met with an executive vice president from one of the 50 largest companies in the U.S. I would guess this dude legitimately makes 10 times my salary. The deals I’m working on are unreal. Great for my career, but the next couple weeks are going to be the biggest challenge of my life so far.

Wish me luck :)

12:30am-7:00am, 12:45am-6:30am, 5:00am-8:45am, …?

OK, it’s not quite the same as finals week: I don’t get to sleep til noon the next day, and I have to shave.