Education should be free.

Well, that’s my opinion, anyway. I’m not talking about college credits or an instructor-led course. I’m talking self-study — the best way to learn.

Self-study is a heck of a lot easier when you can download any textbook under the sun for free. I’d start here:

Wink. Nod. Any book you think might be remotely educational is on that site. I can’t speak for fiction, though, as I don’t read it.

Some stuff on the site you might find interesting:

The Snowball: Warren Buffett and the Business of Life
McKinsey Valuation books
Security Analysis
Margin of Safety

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I don’t think I’ve introduced my pup yet. Meet Leroy, my (roughly) 10-month old lab-mix pup.

I’ve had him for about three months, and it’s been a blast. Dude’s a total idiot — unless you have food, which instantaneously turns him into a modern-day saint.

I’ve had a lot of dogs in my life. A pure-bred golden retriever. A pure-bred lab.

Then an assorted mix of lab-german shepard , lab-everything-under-the-sun, and a chow-golden. Oh — and a lab with the ex. Whoops.

Dogs are what lead me to my child-free for life viewpoint. They’re a pain in the ass, but awesome to have, and exactly the reason I never want kids. After all, you can put a dog in a kennel, but doing the same to a kid is child abuse. Man, I’d make a terrible father.

Anyway, I wanted to take this time to recommend getting a dog. Not just any dog, but a rescue. Preferably, a lab- or golden-mix of something. I swear, they’re not only the best/smartest (sometimes) dogs, but after having a couple pure-breeds, the health benefits of mixing dogs is obvious. My poor pure-bred golden and lab had the worst of problems over time. Mixing, despite what the AKC might say, is the best thing for a dog. Unfortunately, careless breeders have put money before the health of man’s best friend.

They say labs take the longest to mature. And it’s totally true. My boy Leroy still thinks he’s a 7-pound puppy, even though he’s roughly 70 pounds of pure stupid muscle. I love him all the same. But he’s also the friendliest dog in the world, as all labs are.

The oral fixation with this dog is strong. Probably stronger than any lab I’ve had before. He will put anything in his mouth, proudly bring it to me, and expect that he’ll get a “good boy” for it. He loves newspapers, which is a pain because I have a million WSJs laying around that I don’t read.

Sidebar: Newspapers require you get a paper copy with an online subscription because they want to boast broader circulation numbers. It’s a waste of trees, delivery time, and money, but what you you expect from an industry on its death bed?

He’s currently in training for beer fetching. Although he’ll happily open/close the fridge for you, getting him to grab a beer has been the hardest step. Now that he knows “touch,” he’s getting a heck of a lot closer to actually opening the fridge, grabbing a beer, bringing it to you, then going back to close the fridge. Getting him to open the fridge was a piece of cake — I left my friend to watch the apartment/dog on vacation, and he was determined to turn him into a booze-fetcher.

A few things for dog owners:

  • Get a clicker – A clicker is a way to bridge the gap between an action and a treat. You can make a dog associate the sound of a clicker with food. Thus, when you make a click for a particular action, the dog knows he did something right and a treat is on its way. It makes training a dog 10x easier for all of $2. I swear it’s like cheating. I’ve never used one before — instead using an excited “yes” as the marker — but now, I wouldn’t ever go back.
  • Don’t feed your dog horse shit – The reality is a dog didn’t choose you. You chose the dog. Don’t subject it to death-in-a-bag because you’re too cheap to pay $10 more for high-quality food. Go to dog food advisor and see what’s really in your dog’s food. I joke about my dog eating better than I do. He should. After all, he doesn’t shop for me, I shop for him. Even if I were starving, I’d never take him off his expensive (but worth it) dog food. Good food adds years to a dog’s life, and will literally save you a billion bucks in vet bills. The foods on TV are largely terrible products. Please, if you do nothing else today, lookup your dog’s food on the site and see how it ranks.
  • Dogs are the (single) man’s best friend – This should be obvious. Luckily, my pup has a penchant for women. Good boy!
  • Potty training – My dog was pawned on me as being house- and kennel-trained. BS. He was kennel-trained, but certainly not house-trained. It took a week to fix that. Anyway, if you have a puppy (or a worthless cat), Nature’s Miracle is awesome. They’re going to have accidents. Prevent future accidents by spraying the area with Nature’s Miracle. Pro-tip: it also takes blood out of fabric, you know, if you’re a murderer or something.

Anyway, I’m rambling today.

Net-net: don’t feed your dogs crappy food, get a clicker, and be a responsible pet owner and get your dog spayed or neutered. I’m off to teach my dog the final leg of beer fetching. Wish me luck!


TrueCar was one of the world’s best websites. It created a reverse auction for any car, requiring dealers bid against one another in an effort to sell cars to its frugal visitors. Visitors who simply wanted the best deal possible could now force dealerships to compete.

Over time, it pissed off the car dealers. Thousands of dealers fled the site, fearing it would expose what dealerships really are — an ineffective, expensive, and piss-poor way to sell a car.

Today, TrueCar operates like any other aggregator. Dealers name their price for their inventory, and TrueCar simply picks the best one for the buyer based on the parameters. TrueCar takes $299 and $399 for each new and used car sold, respectively. Dealers retain some of their pricing power, since it no longer operates on a reverse-auction basis.

It’s still a race to the bottom, but the race isn’t as fast as it was. Conveniently for TrueCar, it has effectively inserted itself into the capital-light part of the business model — the shopping experience. TrueCar stole the best part of the business, and left the worst part (carrying inventory, owning massive car lots) to the dealers.

Cars vs. Homes
Zillow shares similar economics in that it forces transparency into the real estate market, hoping to knock-off real estate agents and expose them for what they are — an ineffective, expensive, and piss-poor way to sell a home.

The only question for online home listing sites is whether the real estate agents of the world are as powerful as the car dealers. Car dealers effectively forced TrueCar to change. Can real estate agents force real estate sites to change?

After all, real estate agents have pricing power and economics on their side. If they invested a mere 1% of their 6% sales commissions into defending their turf, real estate agents and REALTORS® could have a very powerful legal and economic lobby.

Then again, Zillow/Trulia have an incentive to allow real estate agents their beefy commissions, for now. Why not? Zillow/Trulia are just rent-seeking on the backs of rent-seekers. (No pun intended.) Note, though, that their executive rosters were largely responsible for the death of travel agents.

I just wanted to share this because I find it an interesting microeconomic thought exercise. And because it’s a story that needs more attention.

The middlemen don’t like being told to kick rocks.


It’s that time of the year again. The time of the year I go to the nearby horse track, PPs in hand, and grind it out for hours at a time only to win $0.20.

(That’s what happened yesterday — 7 hours invested for $0.20 in winnings!)

There are some aspects of the sport that fascinate me. Of particular interest to me is how much more money is wagered on statistically poor bets vs. the statistically best bets.

Here are my two biggest gripes:

Win vs. Pick 3

If you are going to bet 3 races in a row, there is little reason to make 3 separate “win” bets.

Monmouth Park, for instance, takes 17% of the money out of win pools each race. On the other hand, it takes out 25% of pick-3 pools.

.83^3 = ~57%
.75^1 = 75%

Thus, all else equal, the risk-reward is much better on a pick-3 bet. And, although it’s much harder to pick 3 winners in 3 races in a row, it is the statistically better wager.

Win vs. show

A win bet pays only when your horse comes in first. A show bet pays if your horse comes in first, second, or third.

What’s the statistically better wager, all else equal? The win bet.

Tracks break payouts down to 10% of the minimum wager. On a $2 bet, that’s $0.20.

So, if a bet should mathematically pay out…say, $12.75 on a $2 wager, the track will pay $12.60 and pocket the $0.15.

As payouts get smaller, the “breakage” becomes more significant. “Show” bets almost always pay less than winning bets. Frequently, show bets will return as little as $2.40 on a $2 wager, even when a horse pays $8 to win on $2.

The maximum breakage is $.19. That’s about 10% of a show bet payout, or about 2.5% of a win bet payout in the example above.

Thus, the effect of rounding down is larger relative to bet size for show bets, making show bets a much worse wager than a win bet.

Sidebar: Betting east coast tracks is arguably your best bet, since most break down to $0.10, instead of $0.20.

So why do people bet statistically poorer wagers?

Most betters largely seek to minimize their drawdowns.

Grannies love $2 show bets, because, even though it’s a statistically poor bet, the odds of cashing a winning ticket are substantially higher than the odds of cashing a win bet.

Likewise, bettors would prefer to place 3 win bets in a row than bet a pick-3, because they would prefer to cash 2 winning tickets than lose a pick-3 in the third race.


  • The “smart money” on any given day is betting the daily doubles (2 winners in a row), pick-Xs (pick-3 to pick-6s), knowing the takeout has a smaller effect on paydays. Look at the “will pays” for any pick-X bet to see where the serious handicappers are putting their money.
  • The “smartest money” is betting the pick-Xs at a track that have guaranteed pool sizes (say, a $250k guaranteed pool for a pick-6), as well as pick-Xs at tracks which have a carryover (money from the previous day that was not won because no one had the winning combination). Carryovers are closely followed by the most experienced bettors.
  • Betting more-likely wagers like show and place bets may make you feel more comfortable, but you’re slowly getting robbed due to breakage.
  • Making money at a race track today is exponentially harder than years ago. The decline of horse racing left only the experienced handicappers — the “dumb” money is watching some other sport, not betting on ponies.
  • Don’t gamble to make money. Seriously. I have a simple rule: if you bet more than the minimum bet, you’re betting to make money. If you’re betting to make money, you probably have a gambling problem, or you’re on the fast track to a gambling problem. I refuse to bet any more than the track minimum.