All posts for the month February, 2008

Here's a choice bit of wisdom from Warren Buffet's Q&A with Emory's Goizueta Business School and McCombs School of Business at UT Austin. He and Charles E. Kirk of The Kirk Report have been the people I look up to the most in investing, because they outperform everyone else yet remain humble, and morally uncompromised. This is Warren's take on happiness and success:

I enjoy what I do, I tap dance to work every day. I work with people I love, doing what I love. The only thing I would pay to get rid of is firing people. I spend my time thinking about the future, not the past. The future is exciting. As Bertrand Russell says, “Success is getting what you want, happiness is wanting what you get.” I won the ovarian lottery the day I was born and so did all of you. We’re all successful, intelligent, educated. To focus on what you don’t have is a terrible mistake. With the gifts all of us have, if you are unhappy, it’s your own fault.

I know a woman in her 80’s, a Polish Jew woman forced into a concentration camp with her family but not all of them came out. She says, “I am slow to make friends because when I look at people, I have one question in mind; would they hide me?” If you get to be my age, or younger for that matter, and have a lot of people that would hide you, then you can feel pretty good about how you’ve lived your life. I know people on the Forbes 400 list whose children would not hide them. “He’s in the attic, he’s in the attic.” Some of them keep compensating by joining board seats or getting honorary degrees, but it doesn’t change the fact that no one will give a damn when they are gone. The most powerful force in the world is unconditional love. To horde it is a terrible mistake in life. The more you try to give it away, the more you get it back. At an individual level, it’s important to make sure that for the people that count to you, you count to them.

What if you could buy 10% of one of your classmates and their future earnings? You wouldn’t buy the ones with the highest IQ, the best grades, etc, but the most effective. You like people who are generous, go out of their way, straight shooters. Now imagine that you could short 10% of one of your classmates. This part is usually more fun as you start looking around the room. You wouldn’t choose the ones with the poorest grades. Look for people nobody wants to be around, that are obnoxious or like to take all the credit. If you have a 500 HP engine and only get 50 HP out of it, you’ll be beat by someone else that has a 300 HP engine but gets 250 HP output. The difference between potential and output comes from human qualities. You can make a list of the qualities you admire and those you despise. To turn the tables, think if this is the way I react to the qualities on the list, which is the way the world will react to me. You can learn to turn on those qualities you want and turn off those qualities you wish to avoid. The chains of habit are too light to be felt until they are too heavy to be broken. You can’t change at 60; the time to look at that list is now.

The Games Developer Conference (GDC) ended this week, and while I'm a bit unhappy about how it's slowly being turned into a place to announce big upcoming titles (don't make this E3, please), it was a good show. I got some great books from the GDC books store (Zimmerman and Salen's Rules of Play and a game business/legal stuff book), and Xstine was lucky enough to attend two full days of workshops on staging and normal mapping workflow.

The emphasis by both Microsoft and Nintendo on the importance of the rising wave of micro-developers, a mix of indies, individuals, and small-timers, is a glimpse of what I think will be a powerful trend in the future. I'm excited at what XNA and WiiWare will offer. It is inevitable that as the tools and the venue for games mature, game development will meet extreme democratization. The long tail will grow with the short head, Chris Anderson would say.

So it would behoove all gamers to anticipate that wave, and plays some of the Independent Game Festival's finalists and winners for best independent games. I especially recommend Fez, Crayon Physics Deluxe, and Goo!. While I think indie games are a little hung-up on physics based interactions at the moment, it's inarguably a parsimonious flavor of design to make, and it's just great to see these little games eating into the mindshare of triple-A titles with multi-million dollar budgets. It makes this gamer proud.

Speaking of proud gamers, I had the pleasure of watching one of the best documentaries since Murderball. It's a story of good and evil, the American spirit, the meaning of life… and nigh-unwatchable world of competitive Donkey Kong, where grown men's lives revolve around the high score board of an ancient arcade classic. There are priceless lines from characters I'm embarrassed to say reside a bit in all of our inner nerd. And yet the movie was crafted so very very well that even while we are incredulous at how socially retarded these people are, by the end of the movie we are swept up in the drama of it all, and that silly game becomes almost as epic for us as it is for them. You need to watch The King of Kong tonight!

Check out this amazing short film from Aardman Animations, who were previously responsible for much light fare like the lovable Wallace and Gromit. This short film, directed by Luis Cook, is their first non-commercial film, surpasses all attempts I've ever seen at merging the fluidity of 3D with the dynamic of hand-drawn graphics. Usually, the two blend about as well as teflon on cast-iron, but I couldn't take my eyes off this piece:

The word mortgage comes from French, combining the meanings of the words "mortal" and "engagement" into one dysphemistic way to describe the deathly pact we make when we buy a house. With the ensuing real estate stagnation, which could easily turn into an all-out freefall at any second, I've been looking more seriously at buying. I'm betting on house prices in the Bay Area falling another 10% or more by the election. This year, the economic stimulus package will allow us to borrow up to $729k before getting jumbo loan interest rates (as opposed to $417k).

So over the weekend, I made myself this nifty little fixed mortgage calculator. There are probably some bugs in it, but it helped me a lot. Unlike other Rent vs. Buy calculators out there, this one also compares 15yr to 30yr investment growth. For example, if I took a 15 year mortgage, paid it off, then invested the money I would have spent for the next 15 years, how would that compare to just getting a 30 year mortgage? Unsurprisingly, a simple 30 year mortgage would just beat a 15 year mortgage for the first 15 years, and then the 15 year would take a major lead.

Therefore, my plan is to buy something small, like a condo, with a monthly payment we could afford, on a 15 year fixed mortgage (low interest), and maximize our tax benefit (short time span). If we survive, we'll be able to buy a real house in the future for half the interest, with the only major risk being a real estate rut that lasts over 5 years. Now obviously the better my investment yield the bigger a hit it is to buy a house, and while my yield is pretty good, that's not the only reason to buy a house, and houses tend to be inflation-safe.

And that's how I'll sign my own death warrant.