I Decided to Go With John Deere

I was really focusing on the next 18 months to three years and I finally thought what about five or ten or twenty years? When I project several possible alternatives for my career into the future, Deere became the better option of the two. There is simply a greater diversity and volume of opportunity in the long term.

This decision was not easy. I will be sitting in the same seat, working on the same projects, and [bonus dependent] making the same money. I will have the perceived quality of being a direct employee. In other words, perhaps this move will allow my voice to be heard more.

One of the things that Deere does to encourage productivity is try to create Shareholder Value Added (SVA) which is operating profit minus cost of capital. Greatly simplified that means that they are taking more money in than spending. There are typically three ways to increase value: quality, service, and price. Deere financial and the salesmen work on the price aspect, and we have a service department that work on service. Engineers on the other hand work on quality. I feel I have some unique capabilities that can improve both the quality and communicated quality of equipment. Being a direct employee allows me to profit from those skills on a performance basis. Even though my percentage of the bottom line is honestly insignificant, I still bring some skills to the table that no one else in my division has as far as I know. At least if they do have my skills they do not have the same combination.

I was entirely comfortable where I was but to progress I must make changes. Thank you for reading and thank you all who gave me suggestions the last few days regarding this choice.

Developing Patience

My dead grandmother wrote down that as an infant I was "easily discouraged". A college advisor once described me to an employer as one who "gets in a rut". All too often I desire rewards immediately. I do feel the pressures of deadlines and fears enhance my productivity. I was (and to some extent still am) most productive post-Pakistan because I felt death was imminent. Yet without exercising some amount of patience, I would have been the one left on that mountain.

I have much room to grow in the patience area. One of the things I do to develop my patience is to gather more data about a problem before making a decision. Typically the decisions in life to be made offer more information than we care to analyze. By taking time to consider other data we can make more informed decisions.

Nothing worth having comes easily.

John Deere versus RFA

Rogers, Freels and Associates/Minnesota Engineering also known as RFA is my current employer. They have hired me to provide engineering services to John Deere, and last week John Deere offered me a job as a direct employee. At the risk of ruining my career with both companies, but providing a real life example to scores of others my age who will experience a similar situation, I am going to talk through it. If they do all fire me I have a year of unemployment saved up and I know that I add value in relation to structural analysis. The question stands: do I leave RFA and work for John Deere or stay where I am?

First, my midterm (1-5 years) career goals:

1. Spend time working abroad experiencing at least one other culture. I am particularly interested in China because of it's population and unique governement. However, I will go anywhere. While I was unemployed I applied to jobs in Afghanistan. I have a different risk tolerance than most Americans. You could say I seek out risk, but I digress, I have not gone BASE jumping or tired to raise a kid yet.
2. Work on difficult leading technical problems. This could happen with either company. It is more likely with John Deere if I were to transfer to the Moline Tech Center. It is most likely if I left industry and went back to school.
3. Learn more about business. For that I have applied to UD business school to get my MBA.
4. The invisible gorillia in the room that only I can see... Maybe they will let me have a leave of abscense or sabatical for six months, but realistically I plan on being unemployed again after I suffer in the wilderness. The gorilla actually trumps the first three items on the list, but I feel mentioning it at work is career suicide.

The rundown of positive and negatives for both companies:

• In order to travel and live abroad for months or years at a time, John Deere is the clear choice. However, I feel they are most likely to send someone with years of demonstrated leadership and technical experience. I feel I brag about myself enough so I'll just say that I doubt I would be their first choice for any traveling assignment. Solution: John Deere.
• As far as difficult technical problems, I feel there is a resistance in industry to embrace the most advanced tools or address the most minute details, such as understanding crack propogation in the heat affected zones of welds when the predominate stress are parellel to the weld. Tradition says the crack should propogate perpendicular to the stresses, but if the heat affected zone is soft enough might the path of least resistance be parallel to the stresses? Solution: go back to school.
• Since the actual work that I will be doing in either position for the next year or two will be exactly the same as I am doing now there is a logical question: which has better compensation? The base pay that I will receive with John Deere will actually be slightly less than with RFA. John Deere does offer more vacation days throughout the year, but only a few more. RFA has an incredibly flexible system where you can work unlimited overtime and get paid your strait hourly rate for it. You can build up hours and get a quarterly bonus or take more vacation days. You get paid for the time you put in. John Deere offers a strait salary, and overtime if you work more than 53 hours per week, and a yearly bonus, which can be significant, or it can be 0%.  Both offer similar health and dental plans, but my healthcare cost in 2011 was $0 anyway. John Deere gives life insurance, but RFA charges me less than a dollar per week. RFA has mediocre 401(k) matching, but it is vested immediately. John Deere has fantastic 401(k) matching, but you have to be there for three years before any of it vests. (Three years with no retirement benefits!) John Deere has a pension and RFA does not, but realistically I don't plan to retire. In summary the only financial benefit to joining John Deere is based on the possibility of a large yearly bonus, which depends on the company performance, and thus tractor sales in China, backhoe sales in India, combine sales in North America, and the price of grain being high enough for farmers to afford new equipment.
• The opportunity for leadership experience is strong within RFA because it is growing and expanding rapidly. I have already started helping to train new employees. At John Deere there is a long line of people ahead of me with more years of experience and more connections to management. Although there are more total positions of authority with a company of 60,000 people. Short term solution: RFA. Long term solution: Deere. Mid term solution: uh...
• People often say that one employer or another is prestigeous similar to universities. My experience with RFA and John Deere points to RFA as the more prestigeous. RFA fires people. John Deere I'm sure does fire people but I have not heard of it happening since I have been there. Once you are a Deere employee they have a hard time getting rid of you. Frankly, I feel that if you don't pull your weight after several opportunities to improve you should be out.
• The motivation for success and fear of being fired is strong when one is a contract employee. I went through a 45 week long job interview. I have not yet figured out how that motivation will translate to John Deere. Solution: get a therapist.
• I really like heat treating. I have a masters degree in heat treating steel and I've seen how powerful it is. In the division I work in now we do very little heat treating. However, our major competitior does a significant amount of heat treating. Two PhDs from my lab group (the best heat treating graduate program in the world?) work at our competitor and a friend and associate of mine from Kohler will start working there as well in the fall. Why is any of this significant? Heat treating has the ability to save tens of thousands of pounds from machines and make them last longer. The initial cost is significant, but it saves hundreds of thousands in fuel costs down the road on lighter machines. Solution: go work for the competitior.
• Job security in Dubuque is best with John Deere. It has been around 175 years and is growing. RFA offers the opportunity to relocate in the event of a staffing need change, but Deere is more stable in the microcosm that is Dubuque, Iowa. (I still can't belive I live in Iowa...) Solution: Deere.
• Does loyalty matter? RFA has been amazing to me! I do not think I have been very needy, but RFA has accomodated me very well. I despise the idea of jumping ship for the opportunity to get a bonus and marginally better job security. After all, I applied to John Deere in the first place and they did not offer me a job until over a year after that first application. Solution: RFA. 
• Finally there is the unmentioned, but subtle, difference in respect between contract employees and direct employees. It is minor and people still listen to the things that I have to say, but there is a difference in terms of which meetings you are invited to, the free jackets and shirts for working on a project, and the office gossip you are privy to. Solution: Deere.

So what am I going to do? I am not sure yet. I tried in my too subtle way to get more money out of either side to sway me, but alas my salary negotiation skills are about equal to my ability to sprint 200 meters. To be honest, I make plenty of money now, I feel greedy asking for more.

Stay tunned. 

I Live in Iowa: Week 45

Let me tell you there is a lot of heavy stuff in the process of dropping. More specifically, one big thing happening. If there is no resolution by Monday, and I don't expect there to be, I'll blog up my thoughts.

In the working world I had a moderately productive week. I made progress on my main project and worked on several smaller projects. It's amazing how one project can take a few hours, and another can take a few weeks, or even months even though they have many similarities.  I worked 42 hours. On the social side of work seven of us went out to Buffalo Wild Wings Thursday. I always enjoy getting people out of the office because people act differently in the office versus out of it. Seriously, once we went somewhere during the working day and five seconds after we were out the door the language changed and the topics changed. It is very interesting. I'm not entirely sure where the dichotomy of personality develops or what causes it to happen.

In the running work I ran a mediocre 64 miles. I had two less than spectacular workouts, one did have a 60.6 s 400 m in it which is actually my second fastest ever. I totally tied up the last 100 meters. I forget that the 400 meter race is hard because even though there is pain it only lasts about 20 seconds. Anyway, there is pain and it is good to experience that so that I can relate to the sprinters on the track team, which constitute the majority of our team, and certainly the most successful members of our team.

On the coaching side we had the IIAC Indoor Track and Field Championships. The results were good. Our top male sprinter was first in the 60m and 200m, 5th in the 400m, and on two point scoring relay teams. We had two male throwers go over 14m in the shot put for the first time. Our distance runners learned a lot. None of them ran particularly amazing times, but every one that raced had some sort of setback in the last three months. To go into a little bit of detail, our top female distance runner ran equal to her PR in the 800 with a huge positive split, which basically means she is in shape to run a few seconds faster if she would hold back the first 400 meters. In other words a good learning experience. On the men's side one athlete ran well, and he has only been running for about a month so I think we will see big things from him in the 800 in the weeks and years to come. Of the others, two of them have had setbacks this winter which have prevented them from having the base to race well through an entire season so I feel that both have run out of gas and need to do some longer stuff to get ready for outdoor track. We did have a few sprinters step up and run distance races and I think that at least one enjoyed it enough to go out for cross country next year.

On the investing side DHT closed Friday at $1.24. You're welcome. For me that is a 4.2% increase, in what three weeks? If you are skittish I advise putting in a limit order on Monday for $1.26 to sell everything and you can then put that in a saving account and remember that one time when you made more interest in one month from investing than you made in two years in a savings account. However, I'm not going to sell because the stock has hit $1.30 on two separate occasions in the last few weeks and I am rather confident that it will be trading much higher in the months to come. Plus, with the dividend, I'm inclined to keep it a long time, at least a year to get the 15% tax rate on long term gains.

I had a good week. I hope that you had a good week as well. Also, keep in mind that heavy things are dropping and if there is no resolution look back here monday night around 8-9PM Central Standard Time for an incredibly honest and revealing view into my life.

I Recommend Eating out of Ceramics

Materials come in three general classifications: metals, polymers (plastics), and ceramics. The differences between the three different materials has to do with the molecular structure.

• Metals are characterized, in part and in general, by electrical conductivity, which means the electrons in the material are able to move relatively freely. Due to the movement, the diffusion, within the metal of the atoms and electrons metals are generally very ductile, bendable. Unfortunately, aluminum has been linked to Altzheimers and iron overdose can be a fatal problem. Metal is awesome but too much of it in your body can be a bad thing.
• Polymers are characterized by chains of mer units, thus the name poly-mer means many mers. The difficulty with polymers is that chemicals are used to join the mer units together. Bisphenol-A which has been linked to a slew of bad diseases caused quite the uproar a few years ago. No matter how stringent the cleaning process, some of the catalyzing chemical, like Bisphenol-A will remain in the polymer. If it was possible to create and isolate a single long chain of a polymer it would be an incredibly strong nano wire. That is in fact how climbing ropes and ropes used for shipping and industrial setting are so strong. The polymer is continuous from one end of the rope to the other.
• Ceramics are something in between. They are very orderly like polymers yet they exist in bulk three dimensional organization like metals. Ceramics are not very electlically conductive at room temperature because the electrons around each atom are not free to move about. That means that ceramics are less ductile than metals. This means that the material also is stronger than metals. Think carbon fibers, because they are ceramic. The advantage for eating is that unless a conscious effort is made to scrape and scratch the ceramic, it will not release atoms as easily as metal and it has nothing to leech like polymers.

I recommend ceramic when it comes to eating. Unless you are anemic in which case using cast iron cookware will help boost that iron in your body. 

Improving Ring Gear Life (Gear Design 101)

We recently had a situation at John Deere where a particular gear failed during testing before it was desired. There were a number of complications with the testing and the gear is just part of the picture. In other words, we caught a number of issues during the normal testing process so that when the product is eventually released with the new modifications it will last years in the field, without a question.

Since heat treating ring gears is my specialty I took the initiative and started asking questions. On a tangent, Google: "heat treating graduate school" with or without quotes and WPI is the only college that comes up in the top ten with a result for a graduate degree. In other words, did I go to the #1 school in the world for heat treating graduate programs? Anyway, as I started asking questions I desired to give my input, even though I am clearly not responsible for the gear or the testing in any way.

Engineers do quite a bit of trying to communicate to other people via presentations, so I created a PowerPoint. It is the best presentation I have made during my working career and possibly ever. Take a look for yourself.

Improving Ring Gear Life

As you can see, there is a significant amount of simplicity. It is only one slide. There are pictures, an equation, color, bold typeface, and quantifying numbers. I just gave you months of education, in the space of about three tweets. This information is not specific to ring gears, but  ring gears are typically expensive and prone to failure.

Lest anyone has the idea that the solution is always this simple, there are often other constraints like the bolts to the ring gear, the manufacturer we outsource the gear from, and the other components in the system (like a pinion gear) that will all be affected by changes to the design or heat treating recipe. Honestly, I would be pretty happy just designing gears and transmissions. Happy engineering!

I Live in Iowa: Week 44

Sorry for the later than usual update. The thing is, I have obligations and priorities above this blog. Examples are engineering, running, coaching, eating, and often enough laying on my couch qualifies too. Since I don't have Internet at home, besides on my phone, it can be a hassle writing anything more than a tweet.

In the engineering world I banged my head against the wall on the same project I was working on last week. I think I have it figured out, but I'll find out tomorrow when I get to work. I worked 42 hours on this this week. Well, perhaps a few hours were on other things. It is a project that is necessary for compliance (safety and ISO standards) so spending extra time on it while the project is still in the virtual stage will save significant hassle later. Due to the size and complexity of the model I am reminded of graduate school when I would work furiously and then wait until I knew if I had succeeded. It can be a frustrating process, but always a good learning experience.

Coaching went really well. I see myself as a positive motivator and this week I was able to interact with several athletes before their races and they turned in season and personal best performances and seeing the satisfaction in them after the races is great! I mean I like setting personal records, but coaching I can be part of dozens of PRs every weekend.

In my personal running I had a good week. I only ran 62 miles but that included a 17 mile long run with pace variation near the end (a 5:50s and 5:40s mile), a really good 3x1000 at half marathon pace, 400 at 800 pace, 2x800 at 3k pace, 2x400 at mile pace, 2x200 at 800 pace, and on Friday I set a new 800m PR! I drove up to UW Madison to run the mile at their Red and White Open. Unfortunately, I had the wrong meet schedule and they ran the mile at 4 PM not 5 PM and I arrived at 4:35 PM. So I talked to one official and suggested I run the 3k, and talk to a second official. The second official said they had already run the 3k. I asked if there were any distance races left and he said there was the 800, and plenty of room in it. So I put myself in the slow heat of the 800 assuming that at a D1 meet everyone would run away from me because I am slow.

So I did the worst warmup I can remember. I was rushed so I did a mix of jogging and strides for a mile and a half or so and then it was time to line up. We started with a two turn stagger in lanes and I was on the outside in lane five. I started and never saw another person in my race.  First 200m in 31, second in 33, third in 32, and final in 33. It was very aerobic and felt somewhat slow until the last 125 meters when I really struggled. It was pretty much a time trial, but I did get a few cheers. Anyway I ran 2:09.54 to PR by 1.8 seconds and finally become a 2:0 guy.

I cooled down in their wonderful full sized indoor turf barefoot. As I was putting my shoes on I watched what makes D1 so catered. A kid came in with an injury, it looked like pulled hamstring, and there were seven trainers around him. No lie, seven trainers to one injured kid.

Seven Trainers, Two Staff Members and One Athlete

On the investing side DHT finished closed at Friday at $1.18. So at that point we are out just the commission. However, I traded in the $1.20s range most of the week with a few hours on Tuesday the 14th above $1.30. I saw that soon after it went over $1.30 and I thought about selling it just so that I could say "I told you so", but I would rather keep it for awhile because I feel it is worth more than $1.30 a share.

On the random knowledge side of things I was watching Contagion, and that brought up the Spanish flu of 1918, which I never really learned about in school so I started reading and learned that Vitamin D can prevent getting influenza. In other words, getting sun, eating mushrooms, orange juice, and milk might keep you from getting the flu. As I continued to read I discovered Cytokine Storms, and the role that antioxidants can play in reducing such a positive feedback loop. In other words, eating your blueberries and pomegranates will likely reduce the severity of a bad fever.

I hope you had a good week as well.

Measures of Running Ability

The ability to race fast boils down to only a handful of factors. They are of course interrelated but here is your one shot guide to the performance measures as far as I understand them.

First there are genetic factors that you don't get to pick, because you can't pick your parents:

1. Fast-twitch muscle fiber percentage in the running muscles. From my limited understanding everyone has somewhere between 10% and 40% of their running muscles as fast-twitch muscle fibers. Where you stand on this scale basically indicates where you have the potential to race. I probably have 15-20% fast-twitch, I'm slow but not as slow as some. Usain Bolt probably has the maximum amount of fast-twitch fibers. Interestingly enough David Rushida probably also have the same amount of fast-twitch muscle fibers as Usain Bolt, but he was raised in a different culture thus an 800 running instead of 100 and 200. I'll discuss cultural difference later. Ideal training: hope that your parents are both doctors with personalities who set world records on the side.
2. Biomechanics or anatomy of your bones and joints. Basically some, perhaps most, people do not have body structures to handle the rigors of training. In this respect, I'm nearly perfect. By perfect I mean there are probably only a handful, perhaps a few thousand or tens of thousands, of people that have the angles that I do or better than I do and can handle the stress that I throw at my body. Although, I feel this aspect is largely influenced by your single digit years when your bones and muscles are still growing. I'll get to that later as well. Ideal training: same as above plus do everything active when you are young.

Second there are the primary trainable factors:

1. First is the percent of muscle fibers used. In an all out sprint away from a lion you will be using probably 100% of your muscle fibers because your body really wants to get away from the lion. When you go for a casual run over relatively flat ground you will be using roughly 30% of your muscle fibers. The more fibers that you use the less force each fiber will use to propel you at a given speed and the longer you will be able to maintain that pace. Ideal training: 8s-12s hill sprints, starts, lifting weights, 100m and 200m hard, and runs over 60 minutes in length (yes I mean long runs).
2. Next is anaerobic capacity, the amount of lactate you can handle in your body before you start jogging again. For the top guys this is 20-25mmol of lactate at the end of an 800m. This is well understood and trains in only a couple of months. There are many literature sources that describe training for this. Ideal training: 10x400m at mile or 1500m race pace with two minutes rest, basically any interval session with repetitions one minute to three minutes at a pace around 1500m to 3000m race pace.
3. Third is maximum oxygen uptake or VO2Max that is basically the maximum amount of oxygen that you can breathe in and out, typically 100% ranges between 5k pace for the top athletes and 3k for slower athletes, and it might even be the mile for untrained individuals. Again there is a plethora of training info out there about maximum oxygen uptake. Ideal workouts: interval sessions of two to five minutes repeats at 3k to 5k race pace.
4. Fourth is lactate threshold which ranges from 2mmol to 7mmol, typically averaged to 4mmol but it is the pace you can manage to run for 1 hour. It is kind of like the maximum aerobic pace. This is a steady state. If you run 1mmol faster than your lactate threshold in a one hour race you will hit the wall and your legs will get really healthy and you will have to slow down significantly. Ideal training: 20 minute tempos at lactate threshold pace.
5. Fifth is what I refer to as aerobic capacity. It is typically given as 2mmol and other times as marathon pace, but I feel it is realistically the pace you can handle for 3-3.5 hours. This is the magic bullet of distance running. Unlike all of the previous paces, which accumulate lactate and more or less have a time limit that you can handle that particular stress, aerobic capacity has no ceiling. When the top guys are trotting 4:40s pace in marathons it is because they have the ability to run 5:00 minute miles aerobically or using very little lactate. Ideal training: lactate threshold +3% to +25% for highly trained athletes and +3% to +35% for lesser trained athletes. That means for a person with a 6:00 minute per mile lactate threshold (moderately lesser trained) paces of 6:11 (+3%) to 7:48 (+30%) per mile will produce the most advantages, given that the training is over level ground with good traction, running up and down muddy hills will slow your pace considerably but keeps a high effort even at much slower paces.  
6. Next is efficiency and there are two types:
1. Aerobic efficiency is the ability of your muscles to use most of the oxygen being transported to them. Famous efficient runners are Alberto Salazar and Derek Clayton who had low VO2Max values and high efficiency. Ideal training: 8s-12s hill sprints and 200m sprints (increase your heart stroke volume so you pump more blood to your muscles) and more aerobic capacity pace running. Typically the guys that run the most have the highest efficiencies. Also, small calves (less mass on the pendulum) one of those factors you don't really control.
2. Metabolic efficiency is the ability to burn fats instead of carbohydrates, a critical factor in marathon success. If properly trained you will not hit the wall or slow dramatically in the later stages of a marathon. Ideal pace is lactate threshold pace +5% to +15%. Ideal training: 45 minutes to 90 minutes at lactate threshold pace +5% to +15%, either at a constant pace or progressing from +15% speed to +5% speed. Also, runs over two hours at slower paces help, but runs over two hours increase the risk of injury for most people. 

Third there are the scientifically undefined factors:

1. The ability to recover. This seems to be related primarily to two different factors:
1. What the kid or athlete does the first 10-15 years of his or her life. The more active a kid is at a young age the better the ability to recover throughout at least one's 20s. In other words, Ryan Hall grew up in Big Bear, a very active mountain town in California. He played every sport before finding running at age 15. My parents never bought me a game system, but they bought me a plethora of sporting equipment and now I'm as healthy as they come. I think that more and more kids these days have sedentary upbringings, thus we get injuries on our college team.
2. The volume of the work that the athlete has done in the recent past. The more that one does, the more one can do. If you start running and run five miles a day every day it will be hard for weeks or even months, but there will come a point after several months when five miles every day becomes easy. It will take at least several months, but eventually it will be easy.  In other words, when I am averaging 15+ miles a day I can do my hardest workouts and come back a few days later and do another hard one. A great quote I read a few weeks ago: "But if you're not tracking time or distance you can do almost anything." It is in reference to Lindgren running 40 miles a day as a teenager. 
2. Flexibility. Basically, if you grow up running and walking barefoot you
   if you grow up running and walking barefoot you have the best chance of having above average flexibility. Many of the east African professional runners have leg flexibility far greater than most Americans. I feel it is due to going shoeless for most of their first 10-15 years. My flexibility is terrible.
3. The mentality to pursue, whatever you are pursuing. The will to fail and fail again and again. Some people just don't have it (cough, cough, instant gratification Americans).

Getting back to cultural difference between Jamaica, Kenya, and the United States. David Rudisha has a 400m PR of 45.50s, Usain Bolt has a 400m PR of 45.28s, and here is a guy Robert Griffin, that I have never heard of but he plays football instead of running track even though he was a track athlete who ran 49s in the 400m hurdles and 46.9s in the open 400m in high school. In Jamaica Bolt chose running so that he could be the best in the world versus just another good soccer player. In Kenya Rudisha chose running, because it is the only sport in Kenya. In the US Griffin chose football because it is the only sport in the US, I mean it is a sport with lots of money, I mean it is the sport with the most fans. He did run at Baylor under Clyde Hart for a semester and ran in the semifinals at the Olympic Trials in 2008, as basically a high school senior. 

So there you have it

Coaching Dramatic Athletes

We had an event recently on the UD track team that brought some of my own ideas to light. One particular high profile athlete created some drama. In short, he left the team and said some undesirable things and then desired to return to the team and a communal decision with the entire men's team in the style of Occupy the Track was made that at the present time he was not welcomed back. I realized that my view of my role as a coach was different than many coaches.

I am an incredibly forgiving person and I will welcome a person back over and over again if he or she quits and changes his or her mind to come back. Part of my reasoning is that this team likely means something to him or her and without it that person might become involved in less constructive activities. I prefer to keep kids on a team rather than wandering around causing trouble. Another aspect of my reasoning is that at my core I believe that a person has the ability to repent and be forgiven an infinite number of times. In practice this is much harder to implement. How much harassment must one person or a group take before the decision is made to excommunicate the offending person? Part of the problem is that the offender in this case said things on Facebook and Twitter which are unsavory and demeaning to a number of the people currently involved with the team. I haven't read them even though I spent three minutes trying to find the remarks. Additionally, he had done things in the past that were not consistent with a strong team player.

In trying to reconcile my thoughts I tried to relate this to other aspects of my life to figure out how I might have managed the situation, had it been my responsibility. I will try to relate everything to stock and investors because the relationship between an investor and a stock is very simple. The investor desires to buy a stock for a low price and sell it for a higher price later, with the exception of dividend stocks that you might desire to keep for your entire life because they are continually rewarding. Here are several examples from life: the relationship between an employer and an employee is a two way stock-investor relationship. The company invests [money] in the employee, which is the stock and who can be replaced, similarly the employee invests [time] in the company, which is also a stock and can be replaced. A [college] student invests [money] in teachers and a school, which are the stocks, in the hopes for an education which can translate into a nice occupation after college.

Similarly, an athlete invests in a coaching staff and hours of training with the hopes of success. I view myself as the stock. Any successful athlete will incorporate a number of stocks [books, articles, coaches, experts, doctors, family, friends, etc.] in the portfolio for success. However, I feel that a valid view of a coach is as the investor as well. The athletes are the stocks which are invested in and eventually sent off with someone else at graduation. It is a different concept because in any example the investor's interests are always more important than the stock's interests. Although, the hope is that both succeed so that the situation is mutually beneficial. However you see the dichotomy, the investors have many stocks to choose from and can easily choose other stocks or none at all, while the stocks need investors or they will be worthless. In other words, I see myself there for the athletes, not for myself. Coaches, myself often included, love to talk about the successful athletes they have nurtured, and it can be very egotistical. Engineers and doctors are all the same. People love to think they are the greatest because of some amount of success. I have been there many times. Unemployment was really good for my ego. I needed some humility. I am sure that I will be egotistical again and need to be humbled again.

One of the complaints of this particular dramatic athlete was that the training that we were doing was not as good as what they did last year with a previous coach. My solution to the problem is to ask the athletes what they want to do. I do it all the time. A happy athlete is typically a successful athlete. However, I do understand the training process better than any of the athletes I work with so overall I feel I know better what stimulus will provide more improvement on any given day. Yet, once again less physiological improvement with significant psychological improvement is preferable to the converse. Again my training theory:

1. Stay Motivated
2. Stay Healthy
3. Train Hard

Once you lose the motivation forget everything else. Chris Lukezic was a middle distance runner that ran very fast and was still young when he left the sport of running to do something else. I have been reading about "financial engineering" a lot recently and comparing it to my present job where I am rewarded for the hours that I work, not any of the additional contributions that I bring to the workplace. I see people older than I doing work very comparable to what I do now and I wonder, will I do this the rest of my career? Could I instead sell myself to the "brain drain"?

This all goes back to motivation. How do you foster and nurture and promote motivation and direct it? In the corporate world we think of money as the simple motivator. However, in college NCAA D3 athletics money is certainly not the motivator.

Circling back to the athlete in question, I feel there was a lack of positive motivation involved. How do you keep a successful person motivated? What performance standards must be regularly met to keep a person interested and feeling progressive as well as what goals must be placed after a significant success? It will depend on the person. In this case I certainly don't have the answer.

As an after note, I feel a great measure of coaching success is athletes setting personal records. This past weekend we set at least one school record and had a large percentage of the team set personal records in their events. This is significant because when a high profile athlete leaves the team because he feels the coaches are not doing a great job, it gets my attention. However, the results that are being produced this season are speaking for themselves, we may not be winning the meet as a team, but we are winning races and nearly everyone is setting personal records. 

There is No Dumb

For a long time I have been struggling to communicate my thoughts on the idea that there is no such thing as "smart". The reason that I do not like the idea of "smart" is that it implies a dumb. As soon as you call someone dumb, they have lost. How does one come back from that?

I was walking down 3rd street here in Dubuque on my way to Monks (it's a coffeehouse and bar) and I finally realized after months of months of thinking how to redefine smart and dumb. People have different reasoning capabilities. In other words, instead of the smart to dumb scale being one dimensional there is a reasoning capabilities universe that is at least three dimensional but includes different things. For example, math and science are in one area, but emotional understanding is in a different area, and humility is in another area, and the capability to throw a 90mph curve ball yet another area. There must be hundreds or thousands of areas. Everybody is capable of having a number of these reasoning capabilities, and chances are they are in different proportions to everyone else. These reasoning capabilities makes up our personality and our abilities.

In the space I am imagining one can be the farthest possible distance from the center point of math and science that we think of as "smart" yet in this model there is no dumb. While one may have a lack of reasoning ability in a certain area that does not mean that that person has no reasoning ability in that area.

This is great stuff! I apologize if this is all just fluff to many of you but people have been calling me "smart" for most of my life and while I like they are recognizing my math and science and multiple input, multiple output understanding of primarily numeric systems, I have often felt that people do not appreciate other reasoning capabilities. In other words, I love getting cheered for my achievements, but I love to cheer others and celebrate other people's achievements, even if they are not in the same realm of reasoning as my own life's reasoning tasks. By the same token I do not particularly like the way that some reasoning capabilities are rewarded so highly. I feel that instead of recognizing single abilities, perhaps it would be more appropriate to reward combinations of abilities. For example, at my alma mater, WPI, there is a President's award for the IQP project. In short, it is typically an environmental or social engineering "competition" that everyone must take part in and ultimate success in the award depends on more than the technical project and includes presentation skills and communication. Similarly no start up company had funding because of a good idea alone, it takes skills to sell the idea and to organize it.

I was watching a CNBC special on Google a few months ago and one of the things that one early Google employee said was to the effect of, 'find the smartest people you can and work with or for them.' She was meaning Sergey and Larry. I read their paper this week and it got me thinking about the "smart" thing again. If you have not read the paper that Google was founded on, it's relatively simple, rather elegant, and a great insight into one of the largest technology companies in the world.

There is no smart, there is no dumb. Or at least if there is a smart there is no dumb but rather varying levels of smart and that is simply one reasoning capability amongst hundreds of reasoning capabilities.

I Live in Iowa: Week 43

Another week living the dream. Of course the dream is a process of development and a mental state far more than it is an actual achievement. I forget that all too often.

I worked 43 billable hours this week. It's not much really, but it is consistent and the amount of work that I get done in an average hour is improving. This week was fun as well. I worked or am working on an articulation lock. Usually I don't mention what I am working on for fear of saying something proprietary, but articulation locks are so common among construction and forestry machines that the sheer amount of time that I have spent on it seems an enormous investment for something that is relatively small. What is interesting about the simulation is that I am using solid elements, nonlinear material properties, and contact interfaces. Those are things that I don't get to use terribly often and it is fun because they are more complex than the standard shell element model.

In the coaching world we continue to have victories and defeats. We had a high profile athlete cause some drama this past week, which I have a blog post 90% written with my take on the situation and reflections on my role as coach. That counts as a defeat because we failed to diffuse the situation before it became a problem. The victory this week happened when several of the athletes, perhaps most, set personal records at the meet on Saturday. We keep telling the kids that we have been through the track season cycle numerous times and had success, we know for the most part what we are doing, and it showed this weekend. Almost all the throwers threw season bests. We had a sprinter run one of the five fastest times in the country. One of the distance runners who greatly doubts her speed ran a new 800 meter best, off of two weeks of injury and rehab. That is just a sampling of the meet, but in short, we rode home from UW Platteville with a bus full of smiles.

My own running was terrible this week. I get stressed every so often trying to fit engineering, coaching, running, and anything resembling a social life into my life and I had a few days this week where I felt like I was failing at them all. You need to have the hard times because they make one appreciate the good times or the successes more. I ran only 61 miles and only one workout. Although it was a very short workout it was 4x200 with 3-5 minutes rest and I averaged 29.5 including one 200 meter repeat in 28.9 seconds. That's nearly as fast as I raced a 200 a few weeks ago! I refuse to accept running 30-31 for hard 200s and calling it good enough. I am faster than that.

In the social life I spent a few hours at a friend's house watching a poker game. That's about it. Because of the feeling of stress in the middle of the week I slept over nine hours a few times. I needed some recovery time.

I am going to include a weekly tracking of the DHT (Double Hull Tankers) stock that I bought so that we can see together how it does. As a reminder I bought it at $1.18 per share. It closed on Friday at $1.08. So I have already managed to "lose" money. However, it is not real money right now as it is instead stock in a company. I did buy more of it when it went down, but that was for a different account so I will not mention that particular stock again. I am not worried because I feel the company financials are still stronger than the price that I bought it for. Additionally with a $0.03 dividend every quarter this stock is returning about 10% a year in dividends at this price. That is ridiculous. I didn't know that any dividend returned 10% a year. Occasionally you hear about 4-5%, but never over 6%.

Life is good. Any complaints that I can think of involve my ignorance and laziness, so I guess I don't have any.

Competition Yet Uncompetitive

To get many of the things I desire I have to be competitive. Unfortunately, I am a rather uncompetitive person, unless I am in some sort of fight or flight situation. I am enamored with teamwork. I have so many faults and deficiencies that I can hardly get to work in the morning dressed, fed and on time.

I recently started chasing a new goal. From step one the waters are more competitive than the safe aspects of my life. Why do I do this? Why do time and again I put myself in unfamiliar cutthroat positions? Do I put myself in these situations intentionally? Do I search out competitive situations? I don't know.

I feel I live in a dichotomy. In a race I will throw an elbow and make you pass me on the curve, at least I used to. If we are engineering I will spill patentable ideas and multimillion dollar saving plans like they are water. (Although you will have to wade through the unmanfacturable, cost prohibitive plethora of ideas that I have along the way.) If you are ever tied into a rope with me above treeline you will see greater fear and greater confidence in my eyes than you will on level ground. Mountain climbing is a great competition. Complete teamwork and complete competition at the same time. Competition against ourselves and against the mountain yet teamwork with all of the other people there.

I don't know. Do you ever reflect on your life and think, 'is this really where I am?' I would never have believed a few years ago that nearing my 26th birthday I would live in Dubuque, Iowa, and like it.

At every step of life there is teamwork and competition, which are fundamentally at odds with each other. A marriage involves intense teamwork with each other and competition against the outside forces causing trouble. The military must work together to get anything accomplished yet so often there is an opposition competing for the same people and same land.

I don't know. It just strikes me as odd that uncompetitive teamwork and competition often exist so close together. What decides that we choose to align ourselves with A and challenge B instead of align with B and challenge A?

Learning to Restart Myself

I don't have very many bad days, but sometimes I feel as though everything is a struggle.

Today was one of those days. I spent hours at work trying to solve a model more complicated than necessary. I sat through a meeting where a designer didn't know the critical testing requirements for the assembly he was designing. Finally I ran only 400 meters of a 7000 meter workout.

It's not a bad day, but it all adds up. It started so well with a 25 minute run and an omelette and a mocha...

The solution to the negativity was to take a walk listening to modern jazz and write a blog post. It is nice to have a forum for emotional expression even though it is one way and totally open. I am so fortunate and so blessed.

...I'm trying to come up with some deep conclusion or positive ending thought, but my mind is filled with rigid elements, contact interactions, anaerobic and aerobic metabolism development desires, a half broken car, no summer plans, no upcoming races, and no general change in sight. I love development and even a moment of stagnation leaves me feeling incredibly lazy and unproductive.

Buying and Selling a Stock: Part 5

I just bought DHT for $1.18 a share... And of course two minutes later it is down to $1.16.

Buying and Selling a Stock: Part 4

DHT was a flop today. At least my attempts to buy it through a limit order failed. It was obvious 20 minutes after the open that it wasn't going to go back down to $1.07, but two 10% gains in a row?! How often does that happen? Had I bought it a week ago I could have sold today for a nice profit. I still want it, but the lower the price the better so I have a solution: I'm not going to tell you that I bought it until I do. But as soon as I buy it I'll put an article up. I'm not saying that people read this blog and drove the stock price up, but it could have happened. The volume on it was four times the normal daily volume. I like stocks that go up, but preferably when I own them, and slower than 20% in two trading days so that I don't go crazy.

In short I still want it, but if it keeps going up 10% before I have a chance to put in an order, this might just be a stock that I don't end up buying. Unless I buy it with a market order, but knowing myself I would buy at $1.30 and it would not see that price for another two years...

I Live in Iowa: Week 42

I was only in Iowa part of the week. I spent a lovely three days in Arizona with my family this weekend. That was surely the highlight. Before I celebrate that time, let me first discuss the usual business.

I worked 35 hours of random projects. We have not had anything incredibly pressing the last week or two so we are tackling some of the more tedious projects that still need to be done. I suppose that tackling some of these projects through finite element analysis does save the company money, but one project I am working on would take all of two hours to do in real life, but will take me a week. On the other hand, if it failed in a real test, then there would be a significant amount of work to be done to fix it, more than a week. Business is continually interesting.

I was only at track practice a handful of days this week, but I was there for the workouts. It's strange having two jobs. I don't think I have ever had two jobs, at least two jobs that pay more than $20 a month. It's good I like working. I get to do the analytical numerical work during the day then do some socializing, exercising, and supervising in the afternoon.

I ran 72 miles including two tempos, a set of short hills, 4x600 at 3k pace, and a desert run that was simple terrible. My legs were stabbed by cacti over and over. I scraped my legs. 32 hours later I pulled a 3/8 inch long cactus needle out of my left quad. It's the kind of situation where I pulled it out after running ten miles on it that day, swimming, showering twice, and living my life, yet I had this significant sharp object in my leg.

On the investing side, I sold my positions in GTAT and GRVY for a 9% and 25% profit in short term gains. Had I held GRVY one week longer I would had been able to cash out a 50% profit, but I don't want to be greedy.

Arizona was a bundle of fun. I spent time with my parents and grandparents. The younger three went hiking at Agua Fria National Monument (cacti land), and all five went to a number of restaurants. I went swimming, spent some time with my skin in the sun, and went car shopping. I test drove a Mini and stopped by the Land Rover and Porsche dealerships. It's fun to dream...

The older I get the more I value my family. You only get one. I suppose that this is part of the process of life, growing up, mourning over a lack of deep relationships, appreciating what you do have. I am so fortunate! I am so blessed!

Buying and Selling Stock: Part 3

DHT is up today a few percent and I want it. I canceled my $1.07 limit order and put another in at $1.15.

Buying and Selling a Stock: Part 2

Article started February 5th, 2012, 7:40 PM. (Yep, I'm not watching the Superbowl.)

I'm still sticking with a P/E low, below 15x on the stock screener but hopefully below 5. Also and Price to book below 1, preferably below .7. In other words, I'm still researching and I'll spare you the details of the dozen companies I have passed over in the last few days. Most of them you have never heard of, which is most of the reason I passed on them. However, I passed on Citigroup and Credit Suisse because I also have more than 10% of my account in one financial company and I don't trust banks enough to dump everything into banking stocks despite the fact that I expect most bank stock to go up 20-40% this year.

I changed some of my search criteria until I found the following combination:

This particular group led me to DHT, or Double Hull Tankers.

DHT 6 Month Chart and Overview

I have had greater quick success with micro cap stocks than the larger stuff. So here is the pertinent information that I gleaned reading through the tabs. The price of the stock was around $15 per share a few years ago. The company owns and operates nine large double hull tankers for the oil industry, but has only five employees. Their book value is around $200M, which means if they threw in the towel tomorrow, they could sell everything at market value and settle their debts and the five employees would walk away with tens of millions each. Their most recent quarter they beat analyst expectations, thus the recent jump from $0.80 to $1.10. Their sales are almost as great as their market cap, which is great. A terrible analogy is imagine that you have a renter property with with a $100k mortgage, and pretend you put $0 down for this example. Now imagine if you brought in $70k in rent in one year. Sounds like a good deal?

However, there is never a perfect paradise. One of the largest shareholders, an investment company, MMI, recently dumped over a million shares some 2% of the company or more. That is partly responsible for the price decline over the last two months. Why did they sell? Well, as they are an investment company I figure that they don't hold stocks less than $1.00. It's a mental thing. Stocks in that range feel cheap. Below $5 is another perfect example, most large investment companies dump at that level. Bank of America had that kind of moment a few months ago dropping into the $4.90s a few times one week. Now it's up to $7.84. The point being large shareholders selling is not a good sign, but it is not always a bad sign.

How do I personally connect to DHT? I like the idea of double wall tankers. Single wall tankers are the kind that seems to always be getting into oil spills. Plus, with the situation in Iran, oil trafficking might be of increased importance over the next few months or even years, in other words, the price will go up. Even if we do not get any oil from Iran, say Russia and China do get oil from Iran. If they no longer get oil from Iran through a pipeline or local tankers, they will need oil transported the long way, using tankers, preferably double hull tankers. Secondly, the economy is better than the media is portraying, the same way it was worse than they portrayed in 2007 and 2008 and 2009. So I expect more people to vacation in the US this year, thus using more oil. So I expect the price to go up significantly this summer. The more money each tanker cargo goes for at port the more the companies owning the tankers will be paid.

Buy Order for DHT

So I put in a limit order for 1000 shares. Yep, I'm betting over $1000 that this is a good bet even though I had never heard of the company an hour ago. That does mean a few things though, I will be skittish to sell the stock relatively early because I am not 100% familiar with it like I would be with Apple stock or John Deere. In other words, in my magic calculator I have a target price of $1.94 for this stock. Don't ask to share that on my blog, that's part of my secret. But I will show you in person if you want to look at my laptop. Basically it's an algorithm based on my priorities and selected financials of the company.

One last comment pertaining to microcap stocks I am unfamiliar with and my value formula. I sold GRVY stock this week for $1.82 a share after buying it at $1.42 per share about 22 days earlier. I had a target price on the stock of $1.88 but it went up so quick that I sold it a little early even though it is now trading at $1.96 or something ridiculous.

Gravity Company Win

The point is, Benjamin Graham and Warren Buffet are not geniuses by any stretch of the imagination, but they sure understood the idea of value investing.

Article completed 8:45 PM. (Still not watching the Superbowl.)

Buying and Selling a Stock: Part 1

Blog article started at about 8PM Central Standard Time February 1st, 2012.

Here we go. There were only four votes, yet around 300 unique visitors in the time the poll was open. However, like many things in life if you don't take the chance to vote, you don't get a say in what happens. So I'm going to go through the process of buying a stock and describing the process to everyone. Here we go with Part 1: Research

Step 1: Log into your brokerage account. For me that is ShareBuilder. I chose it because it links to my ING Direct account, which used to have great interest rates. I also have a Fidelity Account.

Step 2: At the current moment I am into "net asset" value stocks, preferably Micro and Small Capitalization (Cap). So I go to Research > Find Investments > Investment Screener. Then I select on the Basics tab > Small and Micro. On the Fundamentals tab >  P/E Ratio and Price to Book. We will pick a P/E Ratio of 0-15X and a Price to Book Ratio of 0-1X.

Since that gives us a huge list of 283 possible companies, and I am too lazy to go through them all we have to make the list smaller. Let us stick with only Small Cap stocks because I have a feeling some of my readers would be terrified to invest in a Micro Cap stock. Let us also add companies with a Debt to Total Cap ratio of less than 50% because a company with less debt is probably a good bet. We end up with:

That gives us a very manageable list of only nine companies.

The List of Possible Value Companies

Unfortunately, none of those jump off the page as best investments ever. However, I am interested in Ruby Tuesday because I recognize it and Interactive Brokers Group because it has nearly no debt and a very low P/B. Here is where it gets tedious. You have to read. Let's start with Ruby Tuesday.

Ruby Tuesday Stock Overview

Now, the first thing I do is read the Profile and check some News & Events. I won't show you every screen shot but I didn't know Ruby Tuesday owned Mozzarella's and Tia's. I vaguely remember a Tia's somewhere. They also use Tiffany lamps in their restaurants. I had no idea. Oh, it seems the CFO is going to retire in June. At first a CFO leaving raises a warning flag for me. The most recent quarter results announced January 5th say that they lost $0.03 per share, which beat analysts expectations of a $0.06 loss per share. Beating analysts expectations is good, but losing money without any specific one time events such as a large investment or spinoff is not a good sign. However, the economy was not great this fall so fewer people probably went out to eat, that probably explains it. It seems almost all restaurants were down for the year.

Finally I click on the Financials tab. This is where the real meat of the kill is. They have only $10M in cash, but including property have a whopping $1.19B in assets. However, they have some significant long term debt and accrued expenses for liabilities of $595M. That means they have a book value of $592M. Thus the Price to Book ratio of .82. Additionally, the 52 week high is $14.48 and the 52 week low is $6.35. At a share price of $7.74 this looks like a good deal. However, the price to earnings ratio is 14.7 while the statistical 300 year average is 12.1 for large companies I believe. Plus, they did lose money the last quarter. Their stock price has been dropping over the last year, which often indicates that either the company is going bankrupt eventually, or set to go back up again. It seems that prior to 2007 the stock traded at $20-30 consistently. Again, that can be a good sign that it will likely rise again.

However, due to the high P/E ratio, recent Q2 loss of $0.03 per share, and my skepticism about Ruby Tuesday as a restaurant of choice and the overall American dining out prospects for 2012 I am not going to invest, but I will keep Ruby Tuesday in mind if I hear anything. Also to see if It goes up to $10 a share or something next month.

That is all for tonight. I've been typing for over an hour. Just because I research a stock doesn't mean that I have to buy it. Furthermore, for someone who better understands the restaurant business this might be a great investment. I would suggest this investment more than 90% of the companies out there based on the numbers that we looked at tonight.

Article finished 9:23 PM CST Wednesday February 1st, 2012.