Saturday, July 26, 2008

The Last Time

Qdoba - 1 star

Au Bon Pain - 1 star

Andale - 2 stars

French Meadow Cafe - 2 stars

This week I took my last business trip. Which was nice, because otherwise my last trip to my company's headquarters would have happened back in May, and I would not have realized it at the time.

As usual, I bought the cheapest ticket I could find, which involved taking the US Airways 6.45 am flight to Charlotte. But the night before I got an automated phone call telling me that flight had been cancelled, so I switched to the 6.15 flight to Pittsburgh - the one I took so many times back in 2003 and 2004 when traveling to Michigan for our first customer.

Although I've never been to Pittsburgh itself, I've been to the airport dozens of times, and I think it is actually quite underrated. It is reasonably compact and has enough power outlets, decent shopping (I once bought a pair of shoes at the Johnston & Murphy because I forgot to pack dress shoes for a meeting), and one of the better food courts around (including a Ben and Jerry's). For breakfast, I had a breakfast burrito of scrambled eggs, potatoes, cheese, "ranchera" (tomato) sauce, and salsa, which is one of my fake-Mexican favorites. Then I got a sandwich for the plane from Au Bon Pain, which has occupied a special place in my heart ever since college. Before cafés were commonplace in this country, there was a large Au Bon Pain right on Harvard Square, and in the summer before my senior year I read most of Being and Nothingness there (my senior thesis was about French intellectuals, including Jean-Paul Sartre, and the Algerian War). I've always thought their bread was pretty good, and the fact that you can order a sandwich with whatever you want is always welcome in an airport. I had Swiss cheese, cucumbers, tomato, red onions, and aioli on a baguette, and it tasted very good somewhere over Nebraska.

On the way home I ate at two of my favorite airport restaurants, Andalé in SFO (the best airport Mexican restaurant and the best airport breakfast I have ever had) and French Meadow in MSP (although this time I had a green tea vodka martini that can only be described as bad), which must be one of the nicest airports in the United States (in case you don't know, there is a second floor above the central shopping area with comfy chairs, electrical outlets, and peace and quiet). I've reviewed both of them before, so I won't repeat myself more than I already have.

Sitting on the two planes, I also tried to reflect on the last seven years, since we founded my company in California just one week before I moved to Massachusetts (what was I thinking?), and, indeed, the last eleven years, since I flew from California to New York to start my first job, as a McKinsey consultant, with a training session at Williams College. I tried to remember the person I used to be and, not surprisingly, failed. What are you supposed to feel when you quietly close the door on a chapter in your life? Of course things didn't work out exactly like I expected - actually, I had no expectations at the time - and I probably wasn't as good at the whole business thing as I thought I would be. But I enjoyed myself more than I expected, I learned a lot about myself, I worked with people I feel lucky to have known, and I'm extremely proud of everything we accomplished together. I couldn't have asked for anything more.

Friday, July 25, 2008

Right Back Where We Started from

China Best - 0 stars
883 Hamilton Ave., Menlo Park, CA

I'm taking one last trip to the office in California before starting law school in September. Since I'm a sucker for nostalgia, I took a drive down to Menlo Park to take a look at our first office, where we started the company back in September 2001.

Our first meeting there was on September 17, six days after you-know-what. We were renting a few cubicles from Autodaq, a company founded by three of Ken's business school friends. I don't think I had been back since we moved in with our VCs in the middle of 2002. We've moved twice since then, and our new offices are in a big glass building that used to house one of Silicon Valley's most prominent companies.

Back then we used to eat either at one of the local taquerias where most of the other customers were Mexicans (and the jukeboxes were full of Mexican music) or in a mini-strip mall off of Willow Ave. I was hoping to go to the Vietnamese place, but it's no longer there, so instead I went to the Chinese place. It was never very good, and if anything it got worse; the broccoli with garlic sauce tasted both undercooked and stale, and even the rice was weirdly oversized (long grain?) and dry.

I doubt I'll be going back to that particular strip mall. But it was one more place I wanted to say good bye to.

(The title of this post, of course, is a reference to the theme song of a TV show that I liked - at least for the first seasson.)

Tuesday, July 22, 2008

Down on the Farm

Riverland Farm - 2 stars
Sunderland, Massachusetts

I've been doing more cooking than usual, first because I'm not traveling much these days for child care reasons, and second because of our farm share. Each week we visit our farm to pick up our fresh, organic vegetables, some of which we have to pick ourselves out in the fields (brilliant idea, making your customers do your work for you). We usually split the share with my wife's parents, but with them out of town we've been eating it all ourselves, which takes a lot of dedication and planning.

This was this week's haul. Roughly from left, there are five ears of corn, two heads of lettuce, a small bag of cilantro, a large bag filled half-and-half with bok choy and an Asian green whose name I forget, two large zucchini, three cucumbers, a large bag of green, purple, and yellow beans, two eggplant, two onions, a small bag of sugar snap peas, a large bag of lemon basil (for pesto), a small bag of purple basil, and a large bag of kale, arugula, and mizuno.

So, the menus have gone something like this:
  • Thursday dinner: corn, sugar snap peas with sesame oil, stir-fried beans (green, purple, yellow), rice, salad
  • Friday lunch: pasta with pesto
  • Friday dinner: fried rice with leftover vegetables, stir-fried bok choy, greens with Korean seasoning
  • Saturday dinner: pasta with pesto, sautéed kale
  • Sunday dinner: pasta with pesto, sautéed arugula, salad
  • Monday dinner: ratatouille with eggplant, zucchini, and onions (and red peppers from the store); rice pilaf
  • Tuesday dinner: quick cucumber salad, green beans with vinaigrette, and pizza from Bertucci's
The trick is to prepare vegetables simply, so you don't spend a lot of time chopping additional ingredients or making sauces. That way you taste the vegetable itself, not a lot of other stuff.

Community-supported agriculture is a growing movement across the country. The selection you get any particular week may not be exactly what you want (for example, there are no tomatoes up here in Massachusetts yet), and it can be a lot of work, but it's good for the environment and it gets you eating fruits and vegetables. To find a CSA near you, go to

Monday, July 21, 2008

A Little Piece of Italy

Caffè dello Sport - 1 star
Hanover St., Boston

Yesterday we took Thomas to the North End in Boston to see some of the historic sites, like Old North Church (of "two if by sea" fame) and Paul Revere's house. The North End, of course, is Boston's Italian neighborhood, a maze of old red-brick buildings dotted with cafes, pastry shops, and gelaterie. Like many such neighborhoods across the country, it is rapidly becoming gentrified, and boasts more than its share of expensive, nouveau Italian restaurants.

Fortunately, though, Caffè dello Sport is as authentic Italian-American as they come ("sport" is an Italian word, by the way). It has an absolute minimum of decor, the tables covered with clear plastic tablecloths and the walls dotted with random pictures of obscure Italian soccer stars, which makes it the same as every small-town cafe in southern Italy. On the middle of a Sunday afternoon, the large-screen TV was playing not baseball nor NASCAR, but a group-stage soccer match between the under-19 teams of Italy and the Czech Republic (Italy won, 4-3). The panini were mediocre - ordinary fillings on a thick and uninteresting baguette - and they weren't toasted; only after ordering did I remember that panino is just the Italian word for sandwich, and only outside of Italy is "a panini" flatted and toasted in a George Foreman-like grill. But it was the first place in the U.S. I've seen where you can order a latte macchiato - milk stained (macchiato) with espresso - the breakfast drink that my friend Giulia taught me to order for breakfast back in 1996. And any place that can make a decent, fresh cannoli - filled with pastry cream on the spot - deserves a star, even if they weren't quite as good as the ones we get in Northampton.

Friday, July 18, 2008

Invest Your 401(k) Wisely

My company just switched to a new 401(k) administrator in the U.S., so a lot of people will be thinking about their portfolio allocations around now. I decided to put my advice on this blog (rather than the internal blog) because a lot of my friends tend to ask me for investment advice periodically.

A 401(k) is a tax-advantaged retirement savings account. Put another way, it is a government subsidy; the more money you put into your account, the bigger the subsidy. (As an aside, it is another one of those subsidies that helps the rich more than the poor. Rich people can afford to put the maximum into their accounts, and they have higher tax rates, both of which increase their subsidies; poor people can't save much for retirement, and they have lower tax rates, both of which decrease their subsidies. People who think government subsidies go only to the poor and minorities - generally Republicans - are dead wrong for hundreds of similar reasons.)

401(k) plans are taking over from traditional pension plans (where your retirement benefit is an annual percentage of your final salary, or something like that) for one simple reason: they are better for employers. They are cheaper (essentially free if the company doesn't provide a match, like mine) and less risky (because your costs are completely predictable). There is a strong case to be made that our country would be better off with the old pension system (see this Fresh Air episode), but that's what most of us are stuck with.

401(k)s place the responsibility on the employee to, first, make the choice to participate and, second, manage his or her money by deciding which mutual fund(s) to put that it in. On the first point, you should save absolutely as much as you possibly can. Remember, the more money you save, the more money the government is giving you for free. End of story.

On the second point, which is the one I usually get questions about, there are only two concepts you need to understand: indexing and asset allocation.

An index fund is designed to give you the same returns as some market index, most often the S&P 500, which follows some large segment of the market as a whole. In its opposite, an actively managed fund, a fund manager tries to guess at which stocks or other securities will perform better than the market as a whole and buy those. You should never invest in an actively managed fund.

There are mountains of evidence that index funds are better than actively managed funds. First, in any given year, a large majority of actively managed funds do worse than the appropriate indices. But then people think that they should find the fund managers who do well and entrust them with their money. But the fund managers who do well are just lucky - they are the equivalent of people throwing darts at the stock pages of the Wall Street Journal and buying the stocks they hit. Of course some of them will beat the index by luck, but you have no reason to believe they will beat it next time.

But, people say, what about fund XYZ that has beaten the index 10 years in a row? Well, out of 1,024 funds, each with a 50% chance of beating the index each year, 1 of them will beat it 10 years in a row. And there are many more than 1,024 funds out there, and the relevant sample is far larger than that, because fund companies tend to shut down the funds that don't do well in their initial years. In fact, statistical analysis demonstrates that virtually all apparent ability to beat the market can be written off as pure random variation.

Many people refuse to believe this. To them, stock picking should be like any other endeavor - some people are good and some are bad - so the whole argument makes no sense. But there is a reason why the statistics show what they do, and that is the theory of efficient markets. Stock picking is trading on information - you buy a stock because you have information that makes you think the price will go up. In an efficient market where information flows freely, however, all public information is already reflected in the stock price. That is, by the time you find out that some pharmaceutical company had its drug approved by the FDA, thousands of other people already know, and they have already bid the stock price up to fairly reflect the value of that approval. So when you buy the stock, you have no advantage, and it could go down just as easily as it could go up.

The stock market was not always efficient, which is why stock picking used to work for some people. And there are markets that are not efficient, like the market for timber forests. But all the markets that all the mutual funds in your 401(k) invest in are efficient, because there are thousands of investment banks and hedge funds with very large computers trading instantaneously whenever new information becomes available. There is a lot of math that makes the same argument, but this is why stock picking doesn't work. It just creates transaction costs (every time anyone buys or sells a stock he loses a small amount of money) and increases taxes, and you also have to pay the salary of the stock picker, which is why most mutual funds do worse than indices.

(Yes, there are still ways to beat indices. You can take on more risk, which is basically what hedge funds and investment banks did for the last 10 years, but that's not something you should do. You can also trade on insider information, because it isn't priced into the stock price yet, but that's illegal.)

So all your money should go into index funds. In fact, I think it's negligent that any company - including mine - even offers any other kind of fund in its 401(k) plan, but that's beyond my control.

Asset allocation is a more complex topic. Different asset classes (US stocks, international stocks, US corporate bonds, US Treasury bonds, commodities, etc.) have different risk/return profiles; in general, the higher the expected return, the higher the risk (the variance around that expected return). Unlike with indexing, there is no mathematical proof that one allocation is better than another. The important thing is to pick one and stick with it, because otherwise you could fall into the trap of buying more of your funds that are doing well (otherwise known as buying high) and selling your funds that are doing poorly (otherwise known as selling low). A common recommendation is 70% stocks and 30% bonds, or maybe 50% US stocks, 20% international stocks, and 30% bonds, and that's probably a good enough recommendation for these purposes. (Mine is 38% US stocks, 25% international stocks, 11% real estate investment trusts (a kind of stock fund), 13% traditional US bonds, and 13% US inflation-indexed bonds, not counting cash.) But just pick one and stick with it, meaning every six months or so you should trade a little bit of money between your funds to get back to your original allocation. (As things appreciate or depreciate at different rates, your allocation will change slightly.)

And finally, do not withdraw money from your 401(k) and pay a penalty if you can possibly avoid it. That's like giving your entire subsidy back to the government, and then giving them an additional 10% of your money on top.

For people at my company, the only funds you should even consider putting money in are:
  • Spartan U.S. Equity Index Fund (tracks S&P 500 Index)
  • Spartan Extended Market Index Fund (tracks Wilshire 4500, essentially all US stocks other than the S&P 500)
  • Spartan International Index Fund (tracks MSCI EAFE Index, essentially most stocks outside North America)
  • Fidelity U.S. Bond Index Fund (tracks Lehman Brothers Aggregate Bond Index)
The Fidelity Freedom funds are designed to change your asset allocation as you approach retirement, but you should avoid them, since they invest in actively managed funds (and they have the high expenses to prove it). Vanguard has a similar set of funds that invest in underlying index funds (duh!) ... but Fidelity, like any company, is looking out for the interests of its shareholders, not your interests. Which is a point you should remember for virtually the entire financial services industry.

Wednesday, July 16, 2008

What Am I Eating?

Hei La Moon - 1 star
88 Beach St., Boston

We went into Boston on Sunday to pick up my nephew Thomas, who is visiting for a few weeks. Thomas is a pretty adventurous eater, especially for a 14-year-old from Southern Virginia, so we went to Chinatown for dim sum (Sunday, remember?). We went to Hei La Moon, one of the more popular places in Boston, which is the classic Chinatown Sunday dim sum experience: huge (probably seating 300 people at once), packed with mainly Chinese families, devoid of decor, loud, and bustling.

Dim sum is a wonderful idea - people circulating through the room with rolling steam tables of all sorts of yummy stuff, so there's no deferral of gratification. And having lived in New York, Cambridge, and Berkeley, and having eaten dim sum dozens of times, you would think I would be an expert. But this was my first time since becoming a vegetarian, and the old strategy of just pointing at things and eating all of them didn't work so well. The strategy of asking what's in them doesn't work either, since most of the waiters barely spoke English.

But they had all the staples, and I found enough things to eat, although most of the dishes had some combination of pork, chicken, and shrimp. In the end I don't think there's such a wide quality range when it comes to dim sum. But someday someone will open a dim sum-style restaurant where they serve Spanish-style tapas, and the circulating waiters also have bottles of wine to pour by the glass, and and make a killing.

Telecom Hell

Most non-bloggers don't realize how much work it is. Every week or so you have to come up with something that you care about and that other people might find interesting enough to write about. When short of inspiration, though, you can always call a telecom company.

One of my projects for the summer is to rationalize my telecom situation. Right now I pay about $45/month for fixed line, $125/month for mobile (4 lines), $46/month for cable Internet, and $54/month for standard cable TV. So I'm switching to digital cable for $30/month for the first year, and I decided to try out DSL.

So I went to Verizon's web site and added DSL, which should have been $25/month without contract and with a free modem and router. Disturbingly, the confirmation had no indication of what I had actually bought. First they sent me an installation package without a modem, so I called (that in itself took about 5 phone calls - first I talked to tech support and they said I should go to a "Verizon store" and buy a modem) and they said they would ship me one. When I got the modem and set it up, I logged into my account and saw that I was signed up for a 1-year contract at $38/month. So I called billing, where a very helpful person said I had an $8/month discount, so my net price was $30/month, and I had a $0 early termination fee, so it was like having no contract, and I had a 30-day money back guarantee anyway. $30, $25, whatever. But when I asked about the impact on my fixed line discount, she said that she couldn't see my fixed line bill. (She also said that she had no way of seeing what offers were available on the web site - so not only are orders not correctly transferred from the web to the back office, but the back office has no idea what thoses orders might have been.) So Verizon, which is trying to tell all the analysts that it has these great synergies between all its products, doesn't even have call center people who can see information about multiple products at once.

But this comedy pales in comparison to Verizon's tech support. I got DSL working with my laptop plugged directly into the modem, but I wanted to put my wireless router in the middle. With Comcast, you just plug the router into the cable modem and everything works. With Verizon DSL, it doesn't. I did some searching on their support pages and found out that I needed to program the router to use PPPoE with a username and password. It still didn't work, so I decided to call tech support. After about 6 minutes navigating the phone tree, I got an error message saying the number I wanted was not in service. I called again and the same thing happened. This is the phone company, remember.

So I did some more searching online, and discovered I needed to put the modem into bridge mode. I could find the instructions for how to do this on the Westell 2200, but not on the 6100F, which is what I have. I found instructions for the 6100, but the first page of instructions had no Next button. Through more searching I found page 7 of the instructions, from which I was able to navigate to the page I wanted, but the page was out of date because Verizon had changed the user interface for the modem configuration (which I discovered after guessing the default password for the modem, since nowhere had they given it to me). I found other instructions in non-Verizon-affiliated forums, but they also did not account for the new UI. Finally through enough clicking around I discovered how to configure the modem properly and got it to work with the router.

So now it works. I am probably going to cancel on principle because of Verizon's inability to connect me to a tech support person (who probably would have been useless). If not, I need to decide if $16/month in savings are enough to compensate for the 2001-era speed of Verizon DSL (1.5Mb down, 400Kb up - I get over 15Mb down with Comcast).