Discerning Meaning From a Sample Size of One

Way back when I was in college. Nate Jenkins made a comment on his blog about how each athlete, marathon runner specifically, is a study of one, someone who will respond slightly differently to the training as anyone else. As a master of science (and I do have my M.S.) it has always stuck out to me because the scientific part of me thinks, 'what can you possibly learn based on one example?' Yet another part of me knows that to say you can't learn anything from a sample of one does not make sense because that is how we have learned everything. At one point Thomas Edison, or probably one of his assistants, turned the light bulb on and it didn't burn out in a few seconds, or even a few minutes, it kept glowing for 13.5 hours. It was only a sample of one, but it was a breakthrough. 

While I could talk about Patrick Makau, Wilson Kipsang, or Dennis Kimetto, the last three marathon world record holders, who don't have any Olympic medals between the three of them because they are all relatively up and coming, and I could say how each one is a study of one with little to teach sedentary Americans about running, those three are a huge study in team work, training, and Kenya having an environment for the marathon. However, Kenya is about to get a number of athletes exposed for doping over the next couple months, so I won't talk about running tonight. I just wanted to say that as a middle class American I highly doubt I can replicate the conditions for anyone in the U.S.A. to have the same background as each of them. However, they all run lots of miles, and run hard workouts, which is a good place to start training to be your best. No, I'm not going to write about running today, but rather engineering. 

I have had four days of testing in the cold room at -40 degrees C/F this year. Two in May and two just recently in November. While preparing for these tests one of the comments was how, "each test is different, you can't conclude X, Y and Z from one test." Now that I have been through four of these I see what he meant. Do you know what oil does at -40 degrees? Probably not, because no one really does, if we knew how to analytically model it, instead of testing in the cold room, we would. Every test has presented some surprise. I won't divulge the specifics, but like the title of the article how can you say X works or does not work from a one hour long real time test? It can work for ten minutes, then quit working. Another example of small sample sizes I really like, the space program, specifically Mercury, Gemini and Apollo. Every mission was trying something that had never been done before, and if they got it to work, once, it was a huge success. In hindsight we only hear about the successes, and maybe Apollo 1, but space walking was a huge challenge on Gemini until Buzz Aldrin trained in a swimming pool. Apollo 11 had a computer malfunction giving an error as it became overloaded. Apollo 14 almost didn't land on the moon because of a short circuit in the lander that could have triggered an automatic abort. I'm getting off topic, but the point is to show that just because we landed successfully on the moon once doesn't mean that future landing were risk free at all. 

Of my four tests, they always happen in pairs, a baseline and a prototype test, so I have really only tested two new designs. In May we failed, the results were inconclusive due to a number of factors so we went back to the drawing board and asked the experts and came up with a new design. The new design "passed" but there were a couple of issues we encountered during testing and while the results still seemed to show the new design was better than the old design, there is no one waving a flag and cheering saying "This is the answer! You solved the problem!" Partly because people don't do that often in engineering, but also because we all know that minor variations in one test could affect the future production reliability. 

If I was more versed in statistics I would enjoy talking about Weibull slopes and probabilities, but I am not an expert there. There is always the chance that this test was of the best possible situation and you won't pass again. Typically situations in real life are more similar than they are different, which is very fortunate, but we engineers still spend much of our time working on the rare cases and trying to discern the two factors that contributed to failure in that particular instance. 

What can you conclude from a sample of one? It worked that time, it may work again, under the same conditions. That's a positive spin on it, but an accurate view too.

I Live in Iowa: Week 229

This was a nice week. For starters, while I greatly enjoy traveling for work, spending three out of five work weeks in hotels can wear on a person, and I did not travel this week.

Work was good, I had a cold room test on Monday, at -40°, which I always enjoy. The rest of the week was spent trouble shooting a variety of quality issues and taking a number of software classes for a new system that we are going to begin using in December. I expect that I will travel for work before Thanksgiving, but I don't have anything planned of early Monday the 16th.

Running was also good, I ran 42 miles, no workouts. I was still getting over the cold I have had the last two weeks and most days I didn't even feel up to running five miles. Fortunately on Saturday at the end of the week I managed to put in a 12 miler. The daily pleasantry of running over the trails through the forest for well over an hour is so nice.

On the social side I had dinner with a nice lady Friday, and watched the Iowa Hawkeyes first ever 10-0 game at my friends' house Saturday. Plus I went for a social bicycle ride on Saturday, and went out for wings on Thursday, although I didn't actually have any wings. That's about the most social week I have had in some time.

Saturday I watched Inside Out the movie, and it is excellent! It is so true how when we are young our understanding of emotions is simple, but as we grow older the extremes are usually tempered with a mix of emotions. When I hear this constant drive in the media to be happy, it actually gives me a little disgust, because happiness on it's own, exclusively, seems so ignorant. There is a lot of sadness and fear in the world, and valid reasons to have anger sometimes, but remaining happy as you hear about starving refugees or bombs in Paris is not the compassionate emotion to express.

Buying and Selling a Stock: Part 7

I haven't bought any stock in the stock market, outside of my retirement accounts in two years, until last week. DHT Holdings, the stock that I found back in 2012 is starting to do really well again. In fact, so well that I bought a couple hundred more shares.

For starters, after lackluster earning the last three years because of a downturn in the oil shipping market they had less business, that seems to be turning around. Also, they were involved in building new ships, which is very expensive.

In short, this is going to be their best year in a while. Their most recent quarterly report was very positive. The recent earnings transcript was positive too. To add to it, the management owns far more shares than I do, so they have a vested interested in the company doing well, and it's mostly the same people there now that it was back in February 2012 when I learned of the company.

You should certainly do your own research, listening to me is a sure fire way to lose money. However, the DHT's price to earnings ratio is 7. Their dividend payout is higher than 8% at the current stock price just above $7.00 per share. Their price to book ratio is close to 1, which means what you pay for is what you get, not the hope of assets to come. On the down side they have a fair amount of debt, because they recently built some new ships. However, that's the best part. Of the six new ships they have bought, one is scheduled to hit the water in November and the next in January. Which means, they have been paying and paying money to build these multimillion dollar ships, and now they are about to start making money.

In my estimation it all adds up to an undervalued stock price.

A Bubble?

Are we in a bubble? The price to earnings ratio of the S&P 500 is about 22. That's ridiculously high for an average, below 20 is reasonable, and 15 is more normal. Antique Ferrari prices are off the charts for the 250 series, up to $38 million for a car that sold for $9000 when first sold. Plus, the tallest building in the Bay Area is being built right now in San Francisco. All may be indicators of a bubble. That being said, I don't think it's an overall economy bubble but more of a tech bubble. In the last few weeks I have learned the term "unicorn" which is a billion dollar company based on private valuation from investors, not a public valuation, or based on income, in other words Kohler doesn't count. A billion dollars?!

How Blunt? Or How Tactful?

Recently I had a work situation where a senior person was very blunt with me. Blunt in a positive way about a situation I was dealing with. Words were used that I had not used myself, but I had been thinking. 

It got me thinking about how we and how I say things to get the point across. Numerous times when I was younger I was accused of having little tact, that is sharing a little too much information or being very blunt with a person. I felt that it was something for me to work on. Working with Asians the past several years I have really been able to exercise my indirect communication skills. It is a perpetual challenge, how do you say things as they are, and at the same time be positive and uplifting to the team?

I don't have the solution for this. Communication is always hard. However it is well known that by encouraging positive behavior you get better results than punishing negative behavior. Both have a place of course, punishment still needs to exist on some level. Yet in my quest to accentuate the positive, I might have gone so far as to be so indirect with the negative that only I realized the specific incident I was talking about. When you get so indirect that no one else knows what you are specifically talking about you have gone too far. 

In other words, you can't just call someone a liar and expect your relationship with that person to improve anytime soon. A moderately direct response might be, "you did not send me that email." A less direct response would be, "could you resend that email I can't find it." The least direct response would be, "I am not familiar with that information, could you send me some documentation." The final response does not directly address an email, which pleads ignorance about the whole situation. Of course, if the conversation is about an email, it would be okay to mention it specifically. So how direct one is is always a challenge. Again, I don't have the answer. The funny thing is, I have gotten so used to being vague on my blog that at least in one instance that vagueness carried over into work. 

Patience

The hardest lesson to learn about my own patience is that I don't have enough. Of course it's a never ending spiral. There are some things that really I would benefit by being so patient they happen after I am dead, which is another way of admitting that I am not in control. Patience is in large part about control. Patience is allowing events to happen along a course and timeline that you would not have chosen. The benefit of patience is usually that we appreciate the final result more because of the wait and hurdles that were encountered.

I Live in Iowa: Week 228

It was a good week, because God has blessed me to look at my life as the best life in the world. It certainly wasn't ideal. I started out the week recovering from a sore throat, and then leaving home at 4 AM to be on a 6 AM flight south. Monday went okay, but Tuesday the sore throat was back with a vengeance. Normally it would be no big deal, but on a work trip to Covington, Louisiana I had no place to hide. In fact, for the first time in my life Tuesday I repinned an electrical connector that we accidentally broke while repairing a machine. It took me three hours. However, it worked just fine once the machine began running again. 

By Wednesday I was all out sick. Sick on a work trip is no fun. There is nowhere to hide or go home early. The upside is I had Louisiana oysters Wednesday night and they were good! The downside was maxing out my corporate credit card. 

Thursday on the way to the airport I was called by my travel colleague who basically said, "our repair is broken, we need to repair it again." That's not actually what he said, he was far more specific, but that's what he meant. It's frustrating to spend two long days working on something only to know it has to be done all over again. 

Friday I was hoarse at work. I went in because I've learned that mentally if I can finish something that is giving me stress I will physically recover faster. It's amazing how a little progress mentally helps make progress physically. 

I slept 12 hours and had a quiet Saturday running for all of 20 minutes for the first time since Sunday. I did go out to eat with friends and then watched Good Will Hunting. Not too exciting I know, but it was the social event of my Saturday. 

Also, Inside Out the Pixar movie hit Redbox this weekend, with more demand and less availability than I have ever seen for another movie at Redbox. I am excited to someday get to see it.