Public Libraries in the US have now started offering audio book downloads. For example, in my local library, the books The Black Swan: The Impact of the Highly Improbable, The Dork of Cork, Candide, and many others are available for online borrowing as a MP3 download. There is a limit to the number of audio books checked-out and downloaded and each book is licensed for playback for a certain number of days only.

Visit your local library web site to see if they offer NetLibrary [2] downloads. Available at most Public Libraries in the US and UK, and many other countries too.

These specific audio books are Microsoft DRM protected, so no Apple iPod support.

Audio books are a great invention given the amount of time spent commuting stuck in a car, or waiting at bus stations, train stations or airports. MP3 player user interfaces have not caught up well enough with this use, though. While it is great that books can be played on extremely tiny flash MP3 players, these players don't yet offer good bookmarking capabilities, only a single pause/resume capability is offered for all content on the MP3 device. Listening to books would be a much better experience with a multiple bookmarks capability per book...

The Black Swan: The Impact of the Highly Improbable
by Nassim Nicholas Taleb

Read the First Chapter [5] at New York Times. Throw out the Gaussian! In with the Power Law??
Excerpt:
The central idea of this book concerns our blindness with respect to randomness, particularly the large deviations: Why do we, scientists or nonscientists, hotshots or regular Joes, tend to see the pennies instead of the dollars?

The book is written in a very confrontational style, as if the author was emailing text or posting on Usenet, very harsh tone at times towards economists, and others, and a very professorial tone in laying traps that the author uses to berate reviewers on missing his clues! But taken with a hint of humor (which may have been the original intent) it is quite entertaining. Ignoring all such exclamations, and the times when it seems that the author is taking things to the extreme to make a point (are people really that taken with the Gaussian?) the technical parts of the book are very illuminating, and the central premise of the existence of Black Swans is certainly important. The author certainly is an interesting character, in another article, the simple question of Street Charity is turned into long winded response bordering on the incomprehensible, in this Freakonomics - Street Charity [6] Quorum!

The Dork of Cork
by Chet Raymo

With humor, the story describes the life of Frank Bois, a dwarf who is obsessed with all things beautiful. Reviews and Comments [10] available at the Amazon.com web site.

The book starts with ‘Begin with beauty’, and continues with tales of interesting personalities and their travails. The ending though is a major let-down, completely different from the flow created by rest of the story.

Candide
by Voltaire

As I was listening to this book on my MP3 player, I was stunned at the story - seemed incredulous. Then I read the historical background to this story, and then it starts making sense, and it becomes a great, fantastic tale. A google search yields many reviews, many sites have the whole book online, here's one Literature Network - Candide [13].

Excerpts:

...
Master Pangloss ... "It is demonstrable," said he, "that things cannot be otherwise than as they are; for as all things have been created for some end, they must necessarily be created for the best end.
...
"Now we are upon this subject," said Candide, "do you think that the earth was originally sea, as we read in that great book which belongs to the captain of the ship?"
"I believe nothing of it," replied Martin, "any more than I do of the many other chimeras which have been related to us for some time past."
"But then, to what end," said Candide, "was the world formed?"
"To make us mad," said Martin.
...

This book is also available in MP3 Audio Download format. Unfortunately, this is DRM protected and requires support for Microsoft DRM (so no Apple iPod support). Available at most Public Libraries in the US and UK. Visit your library web site to see if they offer NetLibrary [14] downloads.

Asset Allocation is a key factor in analyzing an investment portfolio.
Surprisingly, it does not seem very easy to get an asset allocation analysis done based on a particular set of specific asset classes. Every financial web site seems to have a portfolio analyzer - but they use a predetermined set of asset classes.

Self-directed investors will likely need more than just knowing about percentages allocated to "stock, bonds, cash", for example, following the lazy portfolios [17], one might settle on the following classes in 2007:
Large-cap US
Small-cap US
Europe
Emerging Markets
International
Inflation-Indexed Securities
Bonds
CDs/MoneyMarket

Getting any of the portfolio analyzers on the web to provide analysis based on above set is not possible. But with just a little amount of research, it is very easy to get the data and create a spreadsheet to help with the analysis. Assuming a portfolio of around 10-20 mutual funds (which seems to be a popular recommendation), it should not take more than a hour or two to collect this data which is reasonable time to spend once every year on portfolio analysis.
As an example, here is a Microsoft .xls format spreadsheet that determines the asset allocation for a portfolio [18] based on the asset classes shown above. The spreadsheet also has formulas that can be used to enter actual amount invested in each fund, and it will print out total percentages for each asset class. The basic instructions for using the spreadsheet are:
Step 1: In the first section - "Percentage Holdings" - create a row for each fund, enter unique code, and with information gleaned from Annual Reports, enter the distribution of holdings in that fund. Create new rows by copying or replacing one of the existing rows.

Long term investing - with so many options available it is great to read all about lazy portfolios and how they can be the best bet for passive, long-term investors. The key to a steady and good investment strategy relies on diversification - selecting a bunch of categories with historical returns that are not correlated to one another - one may go up while another may go down and vice-versa.

Here's a site with many articles on Lazy Portfolios - Paul Farrell on Lazy Portfolio Performance [22], beating the S&P 500 for passive investors, advisers and pros ... Simple well-diversified portfolios of three to 11 low-cost, no-load index funds... Aronson Family Portfolio, No-Brainer Portfolio(Dr. William Bernstein), Coffeehouse Portfolio (Bill Schultheis), ...
Interview and portfolio - NPR: Yale's Money Guru [23] David Swensen's Advice for the Individual Investor: Beware of the Mutual Fund Myth ... for-profit mutual funds have an inherent conflict of interest. They make money by charging fees that suck profits away from investors in the funds.

Now the truth is that the Nobel-Prize winning Modern Portfolio Theory is over 50 years old, but it is still going strong even though some people may argue whether risk and volatility should be tied together given that most people may be ok with large upside volatility and only concerned about downside volatility. I would lay credence to what David Swensen says above - essentially that there are many other factors that go into what a for-profit financial professional looks at, and Swensen's analysis shows that diversifying and looking for lowest transaction costs is the key and this strategy is something every investor is capable of executing on their own.

A canny business tycoon promoting an option that says the music industry may be better off without DRM? Finally! Someone of this stature saying this, this is big news - someday, consumers will gain back the rights they always had, and DRM will be relegated to the industry's dust-bins, where it belongs. May take decades, but one step at a time, this will eventually happen.

Here's the article at Apple's web site - Thoughts on Music by Steve Jobs [27].

As some commentators have suggested, that article may have been prompted by legal troubles, but it is still worth reading, for promoting what it calls the "third alternative" - the music industry may be hurting itself, and that Apple itself is open to supporting a world where music does not have to be restricted by being wrapped in DRM locks. A DRM-free world is not only important to consumers, but could be good for business too, which is the main group supporting DRM.

Apple's iTunes is certainly the world's largest music store in terms of volume - and it uses DRM. eMusic.com [28] is the second-largest online music store, and it does not use digital rights management - here's how they describe their service on their web site [January 2007]:
eMusic is the world’s largest retailer of independent music and the world’s second-largest digital music retailer overall, offering more than 2 million tracks from more than 13,000 independent labels spanning every genre of music. A subscription-based service that allows consumers to own, not rent their music, eMusic is the largest service to sell tracks in the popular MP3 format – the only digital music format that is compatible with all digital music devices ...

The Grapevine at Credit Card Goodies [31] is a good source of information for getting the low down on credit card offerings.

The best cards are of course those that pay cash back - all other stuff like airline tickets, hotel rooms, can be bought with cash, so why look for anything else? And of course, use credit cards as a substitute for money you already have, using credit cards to get credit is really not a good idea - too high a cost to get credit this way.

Right now, end of 2006/early 2007, the best cash back card for those spending less than around $20,000 per year, seems to the Chase Freedom Visa Credit Card [32] - from 1% to 1.25% back on all purchases, increasing to 3% for eligible Gas, Grocery and Quick Service Restaurant purchases.

Now that there is a 401(k) for Roth, far more people may be eligible to invest in the Roth IRA. The decision to Roth or not is not always clear cut. Simple choices - like invest in Roth vs invest in a non-deductible IRA are clear - go with the Roth. Young, and in a low bracket? Go with Roth.

Lots of web sites offer calculators and other quick advice - but be careful, many assumptions have to be made to make this simple, and that may make the conclusions reached not worth much.

The best report I have seen on Roth is from Vanguard Center for Retirement Research, their Tax Diversification and the Roth 401(k) [35] is a very detailed analysis of this issue. Other good links are available at the 401K Help Center Collected Wisdom on Roth 401k [36], two good links from there: How Valuable is the New Roth 401k Option? [37] and Watson Wyatt Insider report - Pros and Cons [38].

An example of a good intention and a good idea, but the implementation and execution of which completely messes everything up.

Citibank uses a Fraud Detection system - this is a software based analysis of a customer's credit card charges. If they find a suspicious charge or pattern, it is flagged.

So far so good.

From that point on, the consumer gets the raw end of the deal. To this day, it amazes me that people will believe the results from a computer program, and blindly act on it, without having it go through the smell test, without applying some human common sense.

Citibank policy is that if the computer has flagged a charge as suspicious, then they want the customer to call them, and explain why the charge is ok. If the customer is out traveling, or does not want to endure the hassle of a customer service phone call, then Citibank will automatically block all further use of the credit card.

So, based on a what a software program told them, without even confirming if what it told them looks really suspicious, they will automatically block use of the credit card. There are so many other options to handle this better - do have a fraud detection scheme, but don't automatically block the card - why not inform the customer of the charge pro-actively, and ask them if it was valid instead of asking the customer to call in? And so many other possibilities exist, before taking the drastic step of blocking the customer's use of the credit card.

Just don't travel or be out of town when using your Citibank credit card!

The charge in question here was a payment to the Electronic Frontier Foundation. This is what amazed me even more - how could Citibank flag the EFF [42] as suspicious - could they not do a simple search, find out what it is, and maybe even bump into the fact that it is a IRS registered, tax-deductible organization, and hence, not a fraudulent charge?