Dr Myers’ 2 guesses on hedge funds…

FEN: The hedge fund industry passed the $1 trillion mark earlier this year. Do you think the corporate structure and compensation systems for hedge funds make sense, or are those areas that are evolving as the market matures?

Myers: I?m not a hedge fund insider but I?ll give you two guesses. Guess #1 is that hedge funds are too popular for their own good and there will be shakeout. Guess #2 is that the governance structure for hedge funds is going to evolve and improve. I suspect that the governance structure that hedge funds have now is well short of optimal.

he also compared VC to hedge funds:

Myers: A venture capital firm investing in startup companies makes a series of illiquid investments. If the VC firm puts $X in Startup Y, the VCs have to work with that startup for some period of time. They can?t wait a month or two and say, ?Let?s sell that one and buy something else.? The VCs hold on to that startup until it either fails or reaches an IPO or some other exit point. VC investors ? the limited partners ? therefore know which startups are in the portfolio, they know that they?re actually there, and they know that they?re not going to change over the weekend.

On the other hand, let?s say a hedge fund is investing in corporate debt. If the hedge fund incurs losses, the hedge fund managers ? the general partners ? may not have much left over after the limited partners are satisfied. This creates an incentive to increase risk. How do you prevent the managers from increasing risk? They?re trading all the time and have a wide range of securities to choose from. Investors can?t track trading positions in real time or see trading motives. So we have a paradox: liquidity is generally a good thing, but it also means that the risk of an actively traded portfolio can change rapidly. The opportunity to trade and risk-shift can amplify incentive problems.

Stewart C. Myers: FEN One on One Interview

Ed Colligan says they?re sticking with the Palm OS

Palm CEO Ed Colligan sent out an email to developers yesterday reassuring them that the company is fully committed to the Palm operating system and that the move to Windows Mobile is about ?growing the Treo market,? not walking away from ?existing products or technology partnerships, like Palm OS.?

Palm CEO Ed Colligan says they?re sticking with the Palm OS – Engadget – www.engadget.com

Great, I can continue to use PalmOS until Apple put out a smartphone… 🙂

Virtualization

Wouldn’t it be great if you could own a Mac that runs not only Apple’s great software offerings (such as iLife) but also all those PC games and financial software! Software emulation of Windows is too slow, but with virtulization technology at the hardware level, the speed hit becomes a non-issue and the software market for Mac users opens up exponentially.

The Unofficial Apple Weblog (TUAW)

Actually a pretty decent article from TUAW…

Dr Kai-Fu Lee

Went to a talk by Kai-Fu Lee, the topic was How to be Your Personal Best, which is the title of his book, the foils were from his book tour in China. It’s not much different than most self-help books you read out there… I guess this time it’s given by somebody who is highly intelligent, Chinese, and has actually succeed in what he does. He wrote it because he genuinely wants to help Chinese students, not to make millions of dollars selling books. (If you’ve seen details on his Google compensation package you would know he doesn’t need any more money). I also won a free signed copy of the book…

Here are my notes I jotted down with my Treo, be warned, they are very random:

He quoted Peter Drucker, in the information age, the ease of access to info empowers the students in China, they turn from passive to creative (?)

wisdoms of choosing / decision making:

  • Attitudes
  • proactivity (the slides were in Chinese so he loosely translated it on-the-fly)
  • culture
  • confidence
  • courage
  • tolerance
  • self-critical

The key is to find the middle-way, avoid the extremities

Leadership styles (Daniel Goleman)
directive, visionary (Steve Job), collaborative, democratic (works when employees knows more than boss), coaching (best with inexperience employees), delegatory

best leaders possess all 6 styles, and use each at appropriate times

Pragmatism
7 Habbits of High Effective People (Steven Govier)
– focus on the things you CAN impact, don’t waste energy on things you can’t change

Composure / calm during crisis

Don’t look at things as black and white or 1’s and 0’s
use a more probablistic approach
He quoted Colin Powell, but didn’t have time to write that down, something about certainty and being able to make decisions with uncertainties and their consequences (in a military context).

Self-awareness
Accumulating experiences, learn more from failures than success, Chinese often frown upon failures, but they are actually more valuable
When asked for one single quote to help MIT students at the end of a distinguished lecture (after total failure from his graphics engine project): “it’s not innovation that matters, it’s useful innovation.”

Courage of Letting Go
look beyod what you are to let go, slide showed picture of a peak of a mountain, if you’ve reached a “local maxima” in your career, or life, you often have to step down first before you can reach for a higher mountain (picture then zoomed out to reveal a much larger peak)
He shared his undergrad decision to switch after a year of pre-law at Columbia to Computer Science — follow your heart
He shared story of switching research focus to statistical approach of speech recognition at Carnegie Mellon

what is right?

write down core value… if have difficulties ordering them, use the newspaper test: If tomorrow the newspaper headline is a story on you failing on this core value, how would you feel…

what do I want my life to be?
eulogy test: something about at your funeral, what do you want 4 eulogizers to say about you (this was taken from yet another self-help book)
to make a difference, the difference is the difference of the world with or without you
vision & money are not mutually exclusive, gave example of study done to MBA students, most enrolled because they want to make a ton of money, but 100 had visions… years later there were 101 millionaires (this was in the 80’s when $1m actually meant something), only 1 was from the majority who just did his/her MBA for financial gain only; if you follow your heart it’s often where the money is as well…

loosely-translated Confucius quote: “if you find a job you love, you will never work a day in your life”
keep curiosity: he was curious and took a CS course as a pre-law student, so when he got sick of pre-law he had an idea of what else to do, always be curious.

Follow your heart…

Thomas Friedman new book: The World is Flat, Globalization 3.0, now people in China finally have the chance to be equal…

Q&A session was pretty useless… lots of questions about the Google vs Microsoft lawsuit, only interesting bit was a question from a lady asking him if it’s a good time to go work in China vs staying in the Bay Area, his response was to do it now, because right now there is still competitive advantage (I guess he meant technical skills). But the gap is narrowing quickly…

Jove in EE Times

Jove in EE Times

EE Times ran an article on Jove, Newisys’ Java verification project that was open sourced recently… Here’s a couple of quotes from Trevor, the scurrilous one… 🙂

?It really didn?t seem like Vera was justified as a separate language,? Robinson said. ?It had no tools and no libraries, it had a lot of bugs, and it ran pretty slow.? Another issue was limited reporting capabilities for functional coverage. ?What took us a couple of weeks in Vera took a day in Java,? Robinson said.

I couldn’t have said it better myself! Very nice…