I’m a little late, but I was very impressed with this acapalla arrangement and I wanted to share it:

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I’ve been reading Freakonomics lately. One chapter deals with information asymmetry. Information asymmetry occurs when one individual/group has more information (or better information) than another. Many occupations are buit around information asymmetry. For example, you visit the doctor because you assume that he has more or better information regarding how to diagnose and treat a condition than you do. Other occupations that immediately come to mind are real-estate agents, financial advisors, and lawyers.

Obviously, the internet has played a huge role in reducing information asymmetry. In thinking about this phenomenon, I came up with two questions:

1) Is the erosion of information asymmetry always a good thing? Freakonomics discusses how real-estate agents generally sell a person’s home for a considerable amount less than they would sell their own home, because they are more motivated by a quick sale than selling a home for an extra $10,000 (as they only pocket a small portion of the increate). With more information available to buyers and sellers, clients can now be better informed about the value of their home, thus, getting “ripped-off” less often. While this may be bad for the agent, this would seem to be a good thing. Can anyone think of an example where reduced information asymmetry is bad?

2). Are any jobs protected from reduced information asymmetry? With reduced information asymmetry there is less need for some of the people/positions that once held the informational upper-ground. Think about travel agents for a moment….There was a time when there was a great need to visit a travel agent to have them assit with planning your trips. Now, most people are using travelocity, expedia, priceline, kayak, and other websites to make their travel arrangements. When was the last time you used the services of a travel agent? When was the last time you saw a travel agency that was open and thriving?

Are all jobs at risk of the abundance of information on the internet? Immediately I thought of doctors. Surely they will always be in high demand….Then I thought about the number of times I have turned to the internet, rather than a doctor, to diagnose the symptoms of someone in our family or to decide on which medications would be best. In the past this would have required a visit to the doctor. Lawyers? Ever check out legalzoom.com or other similar sites? I think there are probably a lot of jobs that are not as at-risk - jobs that require highly specialized skills suhc as: surgeons, programmers, engineers, scientists, etc (although I can shoot some holes through these as well). If you are looking for job security, I’d suggest finding a field where your expertise cannot be quickly replaced by the internet.

Thoughts?

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I’ve been reading Freakonomics lately. One chapter deals with information asymmetry. Information asymmetry occurs when one individual/group has more information (or better information) than another. Many occupations are buit around information asymmetry. For example, you visit the doctor because you assume that he has more or better information regarding how to diagnose and treat a condition than you do. Other occupations that immediately come to mind are real-estate agents, financial advisors, and lawyers.

Obviously, the internet has played a huge role in reducing information asymmetry. In thinking about this phenomenon, I came up with two questions:

1) Is the erosion of information asymmetry always a good thing? Freakonomics discusses how real-estate agents generally sell a person’s home for a considerable amount less than they would sell their own home, because they are more motivated by a quick sale than selling a home for an extra $10,000 (as they only pocket a small portion of the increate). With more information available to buyers and sellers, clients can now be better informed about the value of their home, thus, getting “ripped-off” less often. While this may be bad for the agent, this would seem to be a good thing. Can anyone think of an example where reduced information asymmetry is bad?

2). Are any jobs protected from reduced information asymmetry? With reduced information asymmetry there is less need for some of the people/positions that once held the informational upper-ground. Think about travel agents for a moment….There was a time when there was a great need to visit a travel agent to have them assit with planning your trips. Now, most people are using travelocity, expedia, priceline, kayak, and other websites to make their travel arrangements. When was the last time you used the services of a travel agent? When was the last time you saw a travel agency that was open and thriving?

Are all jobs at risk of the abundance of information on the internet? Immediately I thought of doctors. Surely they will always be in high demand….Then I thought about the number of times I have turned to the internet, rather than a doctor, to diagnose the symptoms of someone in our family or to decide on which medications would be best. In the past this would have required a visit to the doctor. Lawyers? Ever check out legalzoom.com or other similar sites? I think there are probably a lot of jobs that are not as at-risk - jobs that require highly specialized skills suhc as: surgeons, programmers, engineers, scientists, etc (although I can shoot some holes through these as well). If you are looking for job security, I’d suggest finding a field where your expertise cannot be quickly replaced by the internet.

Thoughts?

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Today I received an alarming pop-up message (pictured below) from a program on my computer. I had to read the message a few times as I thought it was so ridiculous that it must be a joke.

Aparently Word Web feels that they need to take some sort of social stance by charging fees for the use of their software to people who (in their opinion) are causing more than their fair share of harm to the environment. While I think it is crazy, I guess I don’t care so much since Word Web is a private company and can do what it wants. I do wonder where this kind of thinking is leading. You can think of all sorts of crazy scenarios where you may have to pay a tax or surcharge if your behavior doesn’t fit the norm. On a similar note in the public front, we already have some states auctioning “carbon credits” to businesses.

I personally think the climate change panic is ridiculous (I don’t care to get into why at the moment, and I don’t hate you if you disagree). So, following Word Web’s initiative, I have decided to enact a new pricing policy for those viewing my blog. Here it is:
The following charges apply to the viewing and use of ryanhegs.com:

• $10 per month for Prius Drivers
• $25 per month if your Prius has a bumper sticker to the effect of: “save the planet,” “the earth is our mother,” or anything “green” related
• $5 per month for each additional bumper sticker

So, Prius drivers, email me at ryan@ryanhegs.com and we can work out the payment details….failure to pay is theft! Ok, so I’m not really serious. The Word Web license was a bit of a shock to me though. Here is the full text:

WordWeb 5.x Free version licensing

WordWeb free version may be used indefinitely only by people who take at most two commercial flights (not more than one return flight) in any 12 month period. People who fly more than this need to purchase the Pro version if they wish to continue to use it after a 30-day trial period.

Global greenhouse gas emissions are currently around 5 tonnes of carbon dioxide per person per year, and probably need to be reduced by at least 80% have a good chance of avoiding dangerous warming. Most computer users are responsible for far more emissions than is sustainable. For example two short-medium distance return flights can be equivalent to over 1 tonne of emissions1: more than an average person can safely emit over an entire year.

If you do not qualify you must uninstall the program after the 30-day trial period or purchase WordWeb Pro. The licensing model is designed to allow relatively non-wealthy people to use the program free of charge, and to provide a small incentive for other people who fly a lot to cut down.

Whenever a user no longer meets the above requirements, and they have installed the product for more than 30 days, they must uninstall the product or purchase WordWeb Pro.

There is one exception to the above: not-for-profit educational establishments may make a network installation of WordWeb for the use of their students (regardless of whether their students individually meet the licensing requirement).

See additional licence discussion.

——————————————————————————–

1 Flights are particularly bad because of additional non-carbon emissions and cloud formation at high altitude: the short-term warming effect is estimated to be many times worse than the same CO2 emission at ground level, perhaps a factor of two worse on a twenty-year timescale, but it could be worse than this - the science is not well understood.
(source: http://wordweb.info/free/licence5.html)

“The science is not well understood” - about the only thing they said that makes sense.

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I love reading. I don’t have nearly as much time for it as I would like, but I really enjoy a good book. In the last week I’ve picked-up over a dozen books at two used book sales. I got several great business books, a few on investing, politics, quantum theory (not sure why, it sounded interesting…I like to learn); however, what may have been my best find is a book titled Remember Everything You Read: The Evelyn Wood 7-Day Speed Reading & Learning Program

I have always been interested in speed reading - think of all the time you’d save, or all the books you could read! However, I’ve never taken any classes or done much research on it. This book claims that you will at least double your reading speed if you stick to the methods, and that many people increase their reading speed by 50% after the first session or two. I was skeptical, but also very interested. Believe it or not after just having read the first couple chapters (over the course of two days) my reading speed actually did increase by nearly 50%.

I learned that the average person reads 200-300 words per minute. In my initial reading test I found that I read at aproximately 425 words per minute. After a couple chapters and employing a few techniques (less than an hour later), I was reading at 500 words per minute. The next day, after some more reading and practice, I tested myself again and this time I was reading at 615 words per minute! Unfortunately, I’ve been so swamped with work and meetings that I haven’t had much more time to devote to the book…but you can be sure that I will.

The book explains that people tend to read subvocally, meaning that we sound the words out (usually in our head) as we read them. We also read linearly (left to right). Both of these things hinder our reading speed. The fastest a person can read subvocal-linearly is around 900 words per minute. It isn’t really possible to go any faster using that method. But, if you can shut-off the subvocal process and begin processing words in groups, you can then begin reading vertically. With practice you can begin taking in thousands of words per minute…and with excellent recall.

I’m not to the point of reading vertically yet. The methods I’ve used thus far have just aided me in my linear reading. I’d love to be at the place where I can read 1,500 words a minute or more. Another interesting thing, reading vetically at the 1,000-1,300 range is very difficult as you can easily lapse into linear reading…I guess there is some sort of barrier that I’ll need to break through down the road. I’ll let you know if/when I do. The book cost me a couple bucks and I feel it was money well spent. I’m sure there are a ton of similar, and maybe even better, books out there. I just happened to stumble across this one. You can currently get it at Amazon for under $2.

Do we have any speed readers out there? Has anyone ever given it a try? I’d love to hear your story.

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I recently came across some interesting statistics regarding blogs….Roughly 80% of the top 5,000 or so blogs have two or more posts per day. For the last 5 or 6 months this blog has averaged…oh…about…ONE POST A MONTH! While I don’t really have any aspirations to be one of the top blogs in the world, these statistics did make me face the reality that this blog is very sub-par.

Now before I continue beating myself up, I will point out that it was determined that most of what I had previously been blogging about (arbitrage investments, special situations, etc.) would be better discussed privately. So while the public blog has been extremely quiet since June, we have had some decent and profitable discussions happening on the members-only discussion board.

That being said, I still have to admit that I have dropped the ball a bit lately. I have some valid excuses: a full-time job, starting a small side-business, working on a second master’s degree, and preparing for the birth of our first child. However, I don’t think time constraints are the primary reason I don’t write. It isn’t a lack of things to share or discuss either…I think of things all the time. I think my problem is that I don’t know where to start, I feel like I have to stay on some sort of topic, and I’m a little hesitant to open-up and share my thoughts.

I’ve never been one for resolutions, especially New Year’s Resolutions, since 97.3% of them don’t last past March (ok, I made that up…but it’s probably in the ballpark); however, today I’d like to resolve to be a better blogger. It may not mean multiple posts a day or becoming one of the top 5,000 blogs in the world, but it does mean that I’ll try harder. I’m not going to set a goal…just resolve to do better…I guess anything is an improvement on one post a month.

What will I blog about? I’m not sure…probably a little bit of everything. The content will likely have an investing/business/technology slant as those are some of my interests. Hopefully there will be some people out there that find what I have to say to be somewhat interesting, and hopefully they will feel free to share their ideas, opinions and interests too. We will see where this goes.

I will continue to manage the members-only discussion board. Any specific discussions regarding arbitrage opportunities will be conducted on the discussion board rather than the blog. By the way, Welcome! Daniel and Chris, (our two latest members) we look forward to sharing ideas with you and getting your input.

So, this is my post for the month of November. One more post and I’ve already made an improvement!

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On April 14, 2008 I wrote about the Allscripts (MDRX) / Misys (MSY) Merger (announced in mid-late March). Since then the merger has been discussed a bit more on the member’s-only discussion board. For some time there was uncertainty about the merger due to lending issues (Lehman Bros. collapse). Today it was announced that the funding is in place and shareholders are in favor for the merger to move forward. You may be interested in this just for the special dividend, I still happen to like MDRX and plan to keep in in my portfolio. Here are the details of the special dividend:

Misys is paying $330 million for a 54% stake in MDRX.

The special cash dividend is in the aggregate amount of $330,000,000; the corresponding per share amount of the special cash dividend will not be determined until the actual number of shares of Allscripts common stock outstanding as of the close of business on the record date of October 9, 2008 is determined.

The special dividend will be in the ballpark of $4.90 per share. MDRX is currently trading at $11.40/share. I last bought at $8.80 in March.

Record Date: October 9, 2008
Transaction Date: around October 10, 2008
Payment Date: around October 17, 2008
Ex-dividend Date: October 20, 2008

The above is subject to “customary closing conditions.”

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Based on the recommendation of a member of the discussion board (and after some additional research), I bought Interactivecorp (IACI) for $17.72 per share on August 19. Later that week InteractiveCorp spun-off four divisions: Lending Tree, Home Shopping Network, TicketMaster, and Interval. For each share of IACI I received 1/5 of a share of HSN, ILG, and TKTM and 1/30 of a share of TREE. IACI shares underwent a reverse split following the spin-off.

Today I received the spin-off shares in my Scottrade account. Already I’m up 12.5%; however the intent of this is not to make an immediate buck, but to give the spin-offs a year or two to take off. So I’ve got to work on my patience and continue to monitor these 5 companies.

Much thanks to Eric for his detailed analysis of the transaction on the Members-only Discussion Board.

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Today I sold my shares of KRE for $30.00 per share. I was tired of holding it and hoping the price would rise and make my decision to purchase not look so bad (I’m learning to put asside any emotional attachments to stocks). I purchased KRE for $45.25/share on August 23, 2007 after Jim Cramer talked the ETF up like it was the best investment ever….I should have know better. The logic was that the Fed Rate Cuts would help the Regional Banks and KRE would move upward (link to original post on KRE). Well, the cuts happened but over time KRE just dropped. I think Cramer was a little optimistic on the economy. So I took a 34% hit on this one.

On a positive note, I quit watching Cramer soon after KRE started going south last year (plus I got busy and was tired of his tirades). Since then I’ve focused mostly on arbitrage situations and have done a lot better.

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It has been a while since I’ve written a public post. For the last six weeks all of the activity has taken place on the member’s discussion board (160+ posts so far). Any investments I discuss on the public side of this site will now be after-the-fact. Which brings me to the first payout I’ve received as a result of the discussion board (a few others are in progress).

About two weeks ago one of our members (Cogitator) brought to our attention a tender offer for URI. This offer gave special priority to odd-lot holders, which means that they would be the first to be cashed-out. At the time URI was trading between $19-20 per share. The tender offer amount would be between $22-25 per share.

On July 9 I purchased 49 shares at $19.75. The next day I purchased 50 more for $19.50. The deadline for the TO was July 16. The shares settled in my account on the 14th and 15th. I called Scottrade and let them know that I wanted to tender my shares. On the 16th my shares were delivered out of my account. Today the cash was deposited into my account (at $22/share)…a very quick $200.

It turned out that so many people wanted to tender their shares that only 1/3 were actually tendered. However, because I owned 99 shares (an odd-lot holder) I was pretty-much guaranteed the money.

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