Hedge Fund Math: Heads We Win, Tails You Lose - <AUTHOR> http://www.nytimes.com/2016/12/22/business/hedge-fund-fees-returns.html?emc=edit_dk_20161223&nl=dealbook&nlid=65508833&ref=dealbook&te=1&_r=0 <comment><USER3> Why aren't hedge funds compensated based on some sort of alpha, the difference from a benchmark? One of the common memes of investing over the last few decades is that no one can reliably beat the market. It's very easy to use an index fund to track the market at very low cost. If I invest in an actively managed fund I want them to be compensated for doing better than I could have done myself.

There are a few advantages to this, in my eyes:

1\. They only get compensated for their value, not the rising of the economy. It's terrible for the investor to have an economy that's going bonkers and the hedge fund that's taking 20% of that while not providing their own value. You could easily be doing worse after fees. 2\. It incentivises managers to figure out ways to avoid losses. If the market drops 10% in a year, but the fund only drops 5%, treat it similarly to a profit of 5% because that's the value the hedge fund provided.

Looking at any investment gains in isolation is outdated. Investing is easier than ever for the layperson. We need to start looking at the opportunity costs.

<comment><USER4> _" Why aren't hedge funds compensated based on some sort of alpha, the difference from a benchmark?"_

This is called a "relative return" strategy. Suppose the benchmark falls 70% and the hedge fund loses 50%. Your hedge fund manager has lost half your money, but has beat the benchmark by 20% (i.e. "positive alpha"). How does a fee based on alpha work in this case?

Hedge funds generally claim that they aim to achieve a positive return on investment regardless of whether markets are rising or falling (i.e. "absolute return strategy"). In theory, this means that hedge funds should have low correlation with the benchmark. This low correlation is attractive to investors because it provides a diversification benefit and (in theory) improves their efficient frontier. Low (or ideally zero) correlation to the benchmark is the main reason that institutional investors are willing to pay expensive hedge funds fees. However, if hedge fund managers have incentives based on relative returns to the benchmark, then hedge funds will be more correlated to the benchmark.

<comment><USER5> I'm asking for my edification, rather that putting forward a line of argument, but assuming for a moment that the trades are not so large as to have a direct impact on the market, there would appear to be a great deal of hindsight information available upon which to build a benchmark.

A hedge fund appears to be an investment strategy that compensates for having imperfect information. Why is it not possible to estimate an alpha on the range between the results of a completely naive Monte Carlo simulation ("no information") and the results of a search for the optimal hindsight strategy ("perfect information")? That is, the payoff for the manager will be fixed and proportional to the fraction of hindsight performance that he achieves.

You might not want to peg compensation directly to this, but rather to relative performance against the alpha (compared to other management strategies), but that's more of a salary negotiation detail.

This is the sort of idea that my brain comes up with when I try to think, except I somehow doubt that I am all that much brighter than the average hedge fund manager. I hope I'm not just wasting your time with the obvious, but why doesn't a system like that work?

<comment><USER6> I'm not an investment expert, but wouldn't there be virtually unlimited upside in an optimal hindsight strategy? I.e. you could use derivatives and other financial instruments to gain an arbitrary amount of leverage and hence return, since there would be no risk.

<comment><USER7> Expanding on this, this idea of looking backwards as a method determining what returns you could have made is actually the root of a lot of _bad_ investment advice.

People often look back and try to determine some type of optimal portfolio that they claim is the best in all economic environments because they found it to be the best portfolio in the certain timeframe they looked, but they had the benefit of checking hundreds of different potential sets of funds and if you were to actually calculate the probability that composition of funds is better than any other composition you'd find that it was just random chance it provided the best returns over that time frame.

Granted there is a lot to learn from looking back, but it's also very imperfect if you're not taking in to the benefit of hindsight.

<comment><USER8> Compensating for this effect of training may be done by properly discounting the measure using the Deflated Sharpe Ratio or similar corrected SR's. I always ask any interviewee who cites experience producing these measures a question with this effect as the crux. Few come back with a correct answer.

</comment></comment></comment></comment></comment></comment><comment><USER9> Hedge fund math = regular math. When you charge 2 and 20 but have slim or negative returns, the 2% dominates the 20%. Investors don't like the fixed part of fees, and want to be able to claw back some of the variable fees when later years are bad. Note that this already happens in reverse due to high- water marks (e.g. if you lose 20% one year and then make 25% the next, you don't get a performance fee since you're just back to even). Some investors would like to be able to do the same but in reverse.

In my mind, this is a business like any other. With more competition the price goes down. For HF that means lower fixed fees, higher hurdle rates, lower variable fees, or some combination. On top of that, you can look at it like any risky contract. If you want lower fixed fees, you'll have to pay more in variable fees, and your expected cost will be higher as the managers bear more risk

<comment><USER10> This is nothing like regular math. It isn't even like its closest competitor: private equity. They only get to take performance fees on exits, which can take years or even decades (or never) to materialize.

<comment><USER11> > It isn't even like its closest competitor: private equity. They only get to > take performance fees on exits, which can take years or even decades (or > never) to materialize.

I would argue that private equity is much worse on fees than hedge funds. Among other offenses, they're able to charge fees to both portfolio companies and investors. The investors usually get a credit for the fees paid by portfolio companies, but it's not a 100% offset.

To an outside observer, this seems to buy you performance that isn't too different from exposure to infrequently marked leveraged standard risk premia.

<comment><USER10> Private Equity has its own little scams, no doubt. But that doesn't excuse the hedge fund business's "top tick" performance fee scam. Basically, a person like Ackman and some friends could (in theory) bid up a stock 1000%, mark it there at the end of the month or year (or whenever they account for the performance fee), take their performance fee on that mark, and let it crash. In fact, doesn't that sound a lot like Valiant? 30% of the company was owned by Ackman and people close to him.

<comment><USER11> > Basically, a person like Ackman and some friends could (in theory) bid up a > stock 1000%, mark it there at the end of the month or year (or whenever they > account for the performance fee), take their performance fee on that mark, > and let it crash. In fact, doesn't that sound a lot like Valiant?

How much do you think Ackman lost in personal money on Valeant? You don't think it's much more than the performance fees that he earned from it?

</comment></comment></comment></comment></comment><comment><USER12> Buffet has said this about hedge funds for a long time now. Their fee structure incentivizes volatility, not long term performance, which is a bit ironic because the reason for the name "hedge" fund is that they should have the ability to do better risk management.

<comment><USER13> > Their fee structure incentivizes volatility, not long term performance

Can you explain why?

<comment><USER14> Suppose the fund gets 2% of all profits in a profitable year and gets nothing in an unprofitable year.

Scenario 1: 100 million dollar profits for two years in a row. Fund gets 4 million, customer gets 196 million.

Scenario 2: 300 million dollar profit in the first year, 300 million dollar loss in the second year. Fund gets 6 million, customer ends up with -6 million.

<comment><USER15> Most of the arguments in this comments sections are outdated. The same goes to the 'Buffet argument'. Most of the funds (after 2008) run with High-Watermark rule. Thus, in the case of your Scenario 2, fund will get nothing from the next 300 million it makes (apart from fixed fees). Thus, the investor will end up with 294 million at period 3. Just like if the fund made 100 million for 3 periods consequently.

<comment><USER16> That applies if people leave their money in the fund forever. If some of that cycles then there are no high water marks on the new money.

</comment></comment></comment></comment></comment><comment><USER17> There are some funds that have much better incentive structures than the standard 2-and-20. In particular, some funds charge an incentive fee over a hurdle rate of say, 6%. Even more fair to investors - this hurdle rate compounds and is subject to a high water mark - where the management company must beat the previous highest amount attained by the fund by the compounding hurdle rate. Additionally, some managers also credit any (usually lower) management fee to the incentive fee.

The downside is that the incentive fees get much more complicated - <USER2> complicated to lay out here. I've modeled the scenarios in the following Google Spreadsheet (feel free to copy and play around with this): [https://docs.google.com/spreadsheets/d/1RlB4iwg42dEa- atdti4H...](https://docs.google.com/spreadsheets/d/1RlB4iwg42dEa- atdti4HgV03qI0SaEZKp90tDp-iBOY/edit?usp=sharing)

If you do check it out:

Notice that in the [high ret] scenarios, there's little difference in total fees charged between the "fair" 6% hurdle and the 2-and-20 scenario. However, in the [low ret] scenario, the fee difference can be quite substantial: $227k for 2-and-20 vs $70k for the 6% hurdle scenario. And the resulting

Please feel free to copy and play with the values if you'd like. I'd love to discuss in more depth.

The 6% hurdle is a reasonably fair expectation of annualized stock market returns going forward for next 10-20yrs. If there's sufficient interest please reply to this comment and I can detail reasons why, most likely in a full fledged post.

(Over the next 3-5 years, I believe "market returns" \- defined as those received from SPY ETF - are likely to be less than 6% from this point (Dec 23 2016), possibly significantly so.)

<comment><USER18> I'd love to hear why you believe 6% is a reasonably fair expectation of annualised stock market returns going forward for the next 10-20 years!

<comment><USER19> It's in line with historical averages, some decades are slightly down or up a lot, but over, say 30 year horizons, public equity delivers reasonably consistent returns. A 6% real return on the S&P 500 is a pretty standard assumption in the finance biz.

[http://www.fool.com/investing/general/2016/04/22/how-have- st...](http://www.fool.com/investing/general/2016/04/22/how-have-stocks-fared- the-last-50-years-youll-be-s.aspx)

<comment><USER20> FWIW, I think it's optimistic to assume 6% real returns for retirement planning purposes the coming decades.

<comment><USER19> Serious question: Why do you think that and how did you get there?

Real returns 1950-2009 are 7% [1], so my numbers are already rounded down a bit. You might further adjust for, say Shiller 10 year P/E numbers, but how complex do you want to make it?

[1] [http://www.simplestockinvesting.com/SP500-historical-real- to...](http://www.simplestockinvesting.com/SP500-historical-real-total- returns.htm)

</comment></comment></comment></comment></comment><comment><USER21> Glad to see investors are starting to push back on these ridiculous fees. For decades, the whole hedge fund industry, along with more traditional actively managed funds and financial advisors have been charging fees that can't possibly be warranted by the "value" they add.

I don't doubt that there are strategies and traders who can add skill-based alpha to broad market returns, but the catch is that it is essentially impossible to attribute performance to skill or luck. You may say consistently outperforming the market for 5, 10 or even 20 years is the mark of a great investor, but given the number of funds and players in the space, simple statistics would conclude such outcomes should routinely occur. You see it again and again where some manager has a remarkable run, raises tons of money, and proceeds to encounter mediocre/terrible performance. Some former "genius", do-no-wrong managers have actually lost way more client money than they've ever made because they attract tons of money after a lucky run and then proceed to tank.

The silliest part of the hedge fund industry is seeing all these funds and media retro-fit all kinds of rosy superlatives and sophisticated explanations onto a good year or two run, without ever acknowledging the likely role of luck and randomness.

Warren Buffets essay "The Superinvestors of Grahm-and-Doddsville" perfectly captures so much of this dynamic in a fun hypothetical exercise: [http://www.tilsonfunds.com/superinvestors.html](http://www.tilsonfunds.com/superinvestors.html)

<comment><USER22> To the extent that anyone is able to run a strategy that does beat the market:

a) they probably can't tell the difference between getting lucky and exploiting a niche

b) if they take on more capital their movements will be discovered and the strategy will fall apart

If you're well connected I'm sure you can eventually find a few funds trading on true insider info or novel strategies... but good luck getting in. As soon as the cat is out of the bag the party is over.

For the rest of us: forget it.

</comment></comment><comment><USER23> [https://www.bloomberg.com/view/articles/2015-05-05/rich- hedg...](https://www.bloomberg.com/view/articles/2015-05-05/rich-hedge-fund- managers-are-still-rich)

>But "hedge funds are a compensation scheme masquerading as an asset class," and maybe there's some value in the compensation scheme itself. If you are looking to hedge funds for outsize returns, you might want to pay your manager an option on your returns, by giving him a performance fee of 20 percent of the upside and limited penalties on the downside. Options increase in value with volatility, and giving a manager asymmetric rewards might encourage desirable risk-taking. That might be exactly what you want if you're a pension fund investing a small chunk of your portfolio with hedge funds in order to earn above-market returns. On the other hand, if your manager is already a billionaire investing a big percentage of his net worth alongside you, he might be more conservative with your money than you are, or than you want. It's probably more important for him to stay a billionaire than to rack up more money.

</comment><comment><AUTHOR> Curious how liquidity works against hedge fund investors.

Contrast a VC fund and hedge fund charging 2 and 20 on a $10 million investment over 5 years. Suppose they invest in identically performing assets. They buy at 100, it's valued at 110 at the end of Year 1, 200 at the end of Year 2, 190 at the end of Year 3, 180 at the end of Year 4 and 170 at the end of Year 5.

Both collect $1 million in management fees (the 2). VC collects 20% of the $7 million profit it made, _i.e._ $1.4 million. This happens once; VC carry is typically assessed only on distribution. So total fees of $2.4 million or roughly 1/3 of the gains.

Hedge fund managers calculate gains, and thus carry, at the end of each year. Our manager thus collects 20% of the $1 million Year 1 profit and 20% of the $9 million Year 2 profit, _i.e._ $2 million of Year 1 and Year 2 carry. No carry is earned for the subsequent years. Together with the management fees we have $3 million of fees for the same $7 million of gains, _i.e._ over 2/5ths of the profits or 25% more than the VC.

<comment><USER24> Not exactly sure what you're asking but happy to try answer any q's.

Couple points: I realize your example scenario is very hypothetical and just rough math, but a heads up about understating fees as these add up fast: For the hedge fund in year 2 when the value of the fund doubles to $20M or whatever it gets to, the 2% management fees are charged on those higher amounts. So after year 1 fees are ~$400k, ~380K, $360K etc...

With that said, a hedge fund is going to have much higher operating costs than a VC firm. The trading systems and technology costs at hedge funds can get very expensive and it comes out of the 2%. What does a VC firm need 2% every year for? Many of them seem to do their job using only a blue bottle coffee gift card and an iPad to check their schedules and answer emails, what are those management fees spent on?

Also despite having 2 and 20 in common, hedge funds and VC funds are completely different animals, comparing them is really apples to oranges. But yes in your example HF managers can earn more, one could just as easily come up with a scenario where the VC guys earn more.

Lastly, in some cases there is "clawback" on hedge fund fees. The hedge fund would give back some of the previously earned performance fees if say there's consecutive down years. It depends on the terms of fund, every fund is different and the documents of a fund's terms can be hundreds of pages long.

<comment><AUTHOR> > _Not exactly sure what you 're asking_

Pardon me, that was "curious" as in "exciting attention as strange, novel, or unexpected" [1], not short for "I am curious". That said, thank you for your comment.

> _one could just as easily come up with a scenario where the VC guys earn > more_

When comparing carry-on-distribution versus carry-on-mark, _ceteris paribus_ , I don't think so. High-water marks and clawbacks help, but they're ultimately a patch for a time-horizon mismatch between the LP and the GP.

Note that I wasn't comparing VC and hedge funds. I was comparing how they calculate carried interest. A hedge fund manager charging carry like a VC would assess on redemption, or at least only when a position is sold. The liquidity and transparency that benefit investors also give hedge fund managers another way to charge fees.

[1] [https://www.merriam-webster.com/dictionary/curious](https://www.merriam- webster.com/dictionary/curious)

<comment><USER24> Haha, oh that definition of curious. My bad. (side note: _I am curious_ why the M-W dictionary puts the archaic and obsolete definitions first)

Gotcha on the carried interest. Ya we have come a long way from sailing molasses across the ocean to calculate a carry. While scenarios and clauses can change payment to managers, c.p. or not, if we cut to the chase I think it's safe to say yes the incentive carry structures in hedge funds generally favor HF managers getting paid much more compared to VCs. When the top HF managers annual pay news articles come out, these numbers can get crazy, top 10 HF managers can make more in one year than the entire net worth of a top venture capitalist with decades in the industry. But VC guys get to do way more interesting investing, meeting with new tech companies is much cooler than public equity research I think. Thanks for posting this article btw.

<comment><AUTHOR> > _sailing molasses across the ocean to calculate a carry_

Got a reference on this? Sounds fascinating.

<comment><USER24> [https://en.wikipedia.org/wiki/Carried_interest#Definition_an...](https://en.wikipedia.org/wiki/Carried_interest#Definition_and_history)

[https://dash.harvard.edu/bitstream/handle/1/12274462/Legnani...](https://dash.harvard.edu/bitstream/handle/1/12274462/Legnani_gsas.harvard_0084L_11471.pdf)

</comment></comment></comment></comment></comment></comment><comment><USER25> Do we know if the customers definitely pay the fees in full? One might imagine a large customer (like a pension fund) might be able to negotiate a discount, and the discount might not show up in the published returns, or something like that?

<comment><USER26> Fees are coming way down in the industry - very few shops can charge 2 and 20 these days. A flat fee of 1% is much more likely. Bill Ackman was a rockstar od the industry, so could get away with it for longer than most. Not any more.

Even in the old days, 2 and 20 was the starting point for a negotiation. If a client can bump up a firm's assets under management significantly, they have a lot of bargaining power.

</comment></comment><comment><USER27> The fact that supposedly "sophisticated investors" didn't figure this out years ago amazes me. Hedge funds, as a class, don't perform that well.

The main difference between hedge funds and regular mutual funds is that regular funds have to report their numbers in a standardized way. The SEC requires mutual funds to report 1, 5, and 10 year performance, after all fees. Hedge funds don't have to do that. That lets them boast about their performance in good years, and shut up in bad years. This fools a surprising number of investors.

Under US law, hedge funds are for "sophisticated investors". Unfortunately, pension funds qualify.

<comment><USER28> Every one knows this, its not news...

As to the boasting about performance, hedge funds are not allowed to disclose their performance to the general public

Additionally, while some hedge funds might not be very different from a mutual fund, there are huge differences in what you can do in a regulated vs unregulated vehicle

<comment><USER27> Hedge funds are allowed to disclose their performance. About 7,000 of them do.[1] They just don't have to.

[1] [http://corporate.morningstar.com/US/asp/subject.aspx?xmlfile...](http://corporate.morningstar.com/US/asp/subject.aspx?xmlfile=545.xml)

<comment><USER28> and i'm pretty sure you have to attest to being an accredited investor/QP to access it, i.e. its not open to the general public

</comment></comment></comment></comment><comment><USER29> >The answer can be found in relatively simple math. As a simple example, consider an investment of $1 million in a fund that generates a 10 percent return in years one and two and then loses 5 percent in years three and four. The investor would end up with about $1.09 million, a total gain of $90,000, or 9 percent, over the four years before fees.

1,000,000x(1.1x1.1x0.95x0.95-1) = 92,025

Why do you bother rounding down the figure and using a different unit (m$) if you are going to use the same unit eventually. ($92,025 = $0.09 million = $90,000).

>the fund manager earns $20,000 and $20,400 for a total of $40,400

And then they proceed to take $400 into account. Vexing.

<comment><USER30> Ah yeah, was wondering where that $400 came from

</comment></comment><comment><USER31> Presumably the people who invest in hedge funds are intelligent, knowledgeable people who can understand these fees. The examples in the article don't require more than school-level maths.

So why is there no demand (and ~hence supply) for "fairer" or more-aligned incentives? There must be a price (in management fees) which would eliminate the reward for losing against the market. In which case, is this article complaining about something that is not widely seen as a problem?

<comment><USER32> "Presumably the people who invest in hedge funds are intelligent, knowledgeable people who can understand these fees." You would be surprised. Many of these investors are large institutional funds like state pensions funds. They have a large sum of money that needs to be put somewhere, preferably with minimum due diligence, and 100s of mediocre indistinguishable funds to chose from. People are more apt to pay attention when they are managing their own money

<comment><USER33> Do you have citations for this?

<comment><USER32> For which part?

</comment></comment></comment></comment><comment><USER34> Institutions who deal with hedge funds (especially public pensions) are loaded with consultants, attorneys, and analysts. If they get hoodwinked, it is probably due to their own lack of due-dilligence.

I think the effort would be better spent covering one of the many cases where ordinary people without consultants, attorneys, and analysts are in a "Heads We Win, Tails You Lose" situation.

</comment><comment><USER35> These investors got off easy as far as Ackman's customers go. Investors in his Target fund (Pershing Square IV) lost more than 90% of their money.

[http://seekingalpha.com/article/119879-bill-ackmans-hedge- fu...](http://seekingalpha.com/article/119879-bill-ackmans-hedge-fund-losses- are-staggering)

</comment><comment><USER28> for being based in new york, and ostensibly the nation's newspaper of record, the new york times, regularly (either through ignorance or malice, distorts the story

yes - if a hedge fund under-performs, investors still ended up paying a bunch of money for under-performance. I'm not sure what is surprising here.

As it relates to incentive fees, the issue that needs to be discussed is when is incentive calculated, is there a claw back, and is there a high-water mark?

Different funds' positions on these issues varies considerably, but its not some mysterious subject.

</comment><comment><USER36> How is this not well understood?

The metaphor I always use for people is with lawyers. In most cases (unless they are working on contingency), whether you win or lose the lawyer gets paid.

</comment><comment><USER37> I'm not that sympathetic to hedge fund investors. Hedge funds are supposed to be high risk - high return investments. If you want a bit more safety put your money in an index fund.

Also, there are some big winners, but I'd be shocked if all the hedge funds together turned a profit after fees.

</comment><comment><USER38> The hedge fund still needs to be compensated for their time and skillset. In my life, time is the most precious resource I have. This investor's rant has a paradoxical comical impact for a rich man's tragedy.

</comment><comment><USER39> The fee structure is very simple and transparent. Customers didn't get tricked or legally trapped, they just didn't consider what happens if the fund loses money.

</comment><comment><USER34> For Ackman's underperforming fund to cost you money, you would have to invest in it, and even then, it's still probably not as bad as a lot of "actively" managed mutual funds that charge incredible fees to track similar index funds. That, and the losses are still private.

It's like there's little to no distinction between an iffy private investment vehicle (with private losses) to what the investment banks get up to: Goldman and JP Morgan take risky bets, fail, then have the government/taxpayer top them back up to 100% + profits and bonuses -- while the debtors are still on the hook with little to no government relief.

<comment><AUTHOR> > _Ackman 's underperforming fund...[is] still probably not as bad as a lot of > "actively" managed mutual funds that charge incredible fees to track similar > index funds_

Ackman's fund _is_ an actively-managed fund. I think these articles are appropriate for putting guardrails on what public controllers, _e.g._ of state pension funds, should and should not accept in terms of fees. Nobody is calling for regulating investment vehicle fee structures for wealthy individuals.

<comment><USER34> This is not realistic in terms of how power works.

When you have a wiz-bang asset allocator like Swensen (Yale) or Bronner (RSA), no one is going to have enough political juice to put restraints on them, and even if they did, typical legislators/administrators are largely too ignorant of the process and fee structures to come up with restraints in the first place.

<comment><AUTHOR> > _legislators /administrators are largely too ignorant of the process and fee > structures_

You're criticizing an article for bringing attention to something you claim cannot be changed because nobody pays attention to it?

<comment><USER34> I'm criticizing it for being a non-issue compared to investment banking regulatory capture.

No one is forced to put money in his hedge fund. If his fees are too high and his performance is too low, that's his investors' problem.

Whereas with much of the banking industry, taxpayers are on the hook with little to no say in the matter.

<comment><USER40> _> No one is forced to put money in his hedge fund._

...except the people represented by those "legislators and regulators" that you sneer at for being ignorant, and thus can be _educated_ by articles like this.

Your posts in this thread feel like libertarian position-staking more than anything coherent.

<comment><USER34> Haven't met many libertarians who complain about regulatory capture.

My complaint is that this article is a distraction.

People who deal with hedge funds (especially public pensions) are loaded with consultants, attorneys, and analysts. If they get hoodwinked, it is probably due to their own lack of due-dilligence.

I think the effort would be better spent covering one of the many cases where ordinary people without consultants, attorneys, and analysts are in a "Heads We Win, Tails You Lose" situation.

<comment><USER40> That's fair; I withdraw the libertarian comparison and I apologize. But what's to say we can't pay attention to both at once? I feel like this is kind of a false economy.

<comment><USER34> Any article crying boo-hoo for hedge fund investors is up to something. People who can invest in hedge funds are big boys who can look out for themselves.

At the same time, there are so many bogus mainstream investment vehicles (like so many heavy-load, low-performance mutual funds that a lot of employees are stuck with because that's what their 401k offers), advertised in newspapers and television, that are far more deserving of media scrutiny. I can't help but suspect that part of the reason why they are not scrutinized is that they are well-paying advertisers.

Ackermann is probably getting a colonoscopy here because he is not an advertiser.

</comment></comment></comment></comment></comment></comment></comment></comment></comment><comment><USER41> "But where are all the customer's yachts?"

<comment><USER11> I understand the origin of the phrase, but I always thought I would be somewhat upset if pension funds started buying yachts.

Pension funds are the customers here and it would be pretty bad if they started buying yachts.

<comment><USER30> You should be, unless they also maintain them themselves -- you know, with those "management" fees.

</comment></comment></comment><comment><USER42> "Give me control of a nation's money supply, and I care not who makes its laws." \--Rothschild, 1744</comment>


200+ Labels Withdraw Their Music From Spotify: Are Its Fortunes Unravelling? - <AUTHOR> http://www.wired.com/epicenter/2011/11/200-labels-withdraw-their-music-from-spotify-are-its-fortunes-unravelling/

<comment><USER2> _Add to that the feeling that their music loses its specialness by its exploitation as a low value/free commodity._

Interesting quote. Is music production being exploited as a low value commodity, or is it in reality a low-value commodity? With the insane amount of music that is available I personally feel like it's the latter, and the reverse exploitation of publishers/distributors has gone on for too long.

<comment><USER3> The factor that is often missed in this equation is that good music will always have a high value to the people who make it, because they pour their heart and soul into it. This will strongly affect their decisions about selling/marketing it, in ways that will likely appear irrational in the light of cold economic analysis.

Those who manage to understand this "passion" factor and work it correctly into their business models are the ones that will make the post-piracy music industry work for them.

A simple example of this is the sale of super-deluxe limited edition box set versions of albums for $200 which we've been seeing over the last couple of years.

<comment><USER4> > _The factor that is often missed in this equation is that good music will > always have a high value to the people who make it, because they pour their > heart and soul into it._

Passion doesn't change the economic facts. Painters pour their hearts and souls into their works as well. That doesn't mean that they can realistically sell at a high price. Most painters are broke, and most of the art people own are cheap reproductions from places like Pier 1 or Art.com. And most people still own relatively few reproductions.

The question for musicians should be how can they maximize revenue, not price. Unless they want to live in a world where albums are purchased liked paintings: rarely and only by a small market.

<comment><USER3> _> Passion doesn't change the economic facts._

Nope, but it will change economic behaviour.

</comment></comment></comment></comment><comment><USER5> _more than 200 labels has withdrawn its entire catalogue from Spotify, Napster, Simfy and Rdio._

Somewhat sensationalist headline trying to make it sound like it's Spotify that's losing these labels when in reality it's the labels opting out of ALL subscription based music services. Not to say that it's not a huge problem but there is no need to single out Spotify in the title.

<comment><USER6> Also, it's a bunch of small time techno labels, and not a single major label is a part of the enormous sounding "200 labels".

</comment></comment><comment><USER7> "because it turns a service that has everything into a service that has "most stuff""

Spotify already was a service that has "most stuff"--it was never a challenge to find holes in their catalog.

And judging from the ads that the free version of Spotify plays for me, either their entire userbase is really into country, or their advertising is more intended to badger me into buying a subscription so albums I actually like aren't interrupted by country music every 2-3 tracks.

<comment><USER8> _... has "most stuff" — that's a life-and-death difference to a hardcore music fan_

as you say, spotify's lacking catalogue is not news.

I would be interested to know however if _hardcore music fan_ 's makes up the majority (or a significant minority) of spotify's user base. As such is this truely a life-and-death difference to spotify as a whole.

</comment></comment><comment><USER9> I have a strong suspicion that these particular "labels" mostly have 1 artist on them.

<comment><USER3> This is not the case. They are admittedly all UK-based underground electronic music labels, so perhaps not the end of the world for spotify, but it isn't something they can ignore. STholdings has been a successful distributer for many years, it underpins the UK scene. Others are sure to be watching.

<comment><USER10> If anything, it's more worrying for Spotify that these labels are all closely related by genre. This leaves a gaping hole in that specific genre, which is harder to ignore than a few artists here or there.

<comment><USER11> InsideOut (the biggest progressive rock/metal label) removed all their music from Spotify about a year ago. This would have been a dealbreaker for me when I started my Spotify subscription, but now I almost can't be bothered to switch...switching would mean exporting my 200 playlists to the next sertive.

<comment><USER12> Same here. I lost Frost* from my playlists, but frankly there' so much other music to listen to that I'm not missing them.

<comment><USER13> That's one scary aspect of music services such as Spotify. They twist our listening behavior with selective offerings.

</comment></comment></comment></comment></comment></comment><comment><USER14> If someone is going to solve the music problem, the business model should be as focused on addressing the concerns of labels and artists as it is on consumers. If the middleman is making customers happy, and artist/labels feel like their getting an equitable fee, lock-in will happen and it will become a strategic disadvantage to leave.

It's far too easy to say "give the customers what they want. Your model is antiquated, catch up!" That isn't solving a problem. If we only look at the consumer end, we're bound to end up with lots of models that don't interest labels and artists, and ultimately will not satisfy customers either. If the ultimate destination is a world where we largely marginalize labels (which seems to be something a lot of people advocate as it will push costs down), then does Spotify get us any closer to that goal? Not as it stands now.

<comment><USER15> _> It's far too easy to say "give the customers what they want. Your model is antiquated, catch up!" That isn't solving a problem._

I think the gaming industry is good proof that this DOES work. Steam (and Gabe Newell) basically came out to say that making it super easy and convenient for customers basically made it easier to purchase from Steam rather than pirate. (Myself included.)

The consumer end, especially for media like music or gaming, is probably the most important for business considerations, in my opinion.

</comment></comment><comment><USER12> I'd love to know whether Spotify was generally causing an increase or a decrease in the amount spent on music.

I'm currently spending £120/year on music that I wasn't spending before, but I'm aware that I might not be normal.

<comment><USER9> What matters is how much of that spending is making it back to the rights holders. Is that amount increased or decreased via spotify?

<comment><USER12> Some good figures here: [http://www.hypebot.com/hypebot/2011/09/how-much-does- a-band-...](http://www.hypebot.com/hypebot/2011/09/how-much-does-a-band-earn- from-each-music-platform-uniform-notion-shares-the-numbers.html)

<comment><USER16> Keep in mind that comparisons like this don't take into account that streaming services like Spotify attract a lot of users who would not have spent a dime on music distributed in any other way, so they are effectively useless to compare revenue streams. They are a bit like equating every pirated song to a lost sale.

Myself, I'm just like the guy above me, I literally spent $0 on music for over a decade, until I got a Spotify Premium account about a year ago. I think there are many others like me.

<comment><USER17> Services like Spotify and Netflix are marginal cost services. Their intent is to monetize the previously non-paying customers like yourself at unheard of low prices.

However, it's not all gravy. Marginal cost services cannibalize a portion of the existing market. The degree to which this happens depends on the popularity of the service. It may a small percentage or in the extreme, every customer.

If Spotify remains relatively small and is kept in check, then it will likely be a net benefit to artists and labels as it costs them little to participate.

However, it's also a disruptive innovation at a radically lower price point. If the lion's share of the music market were to switch to Spotify or a similar service, the drop in revenues would not sustain the market since great content is labour intensive and expensive.

</comment></comment></comment></comment></comment><comment><USER18> This is truly the big problem with Spotify. They're completely at the mercy of the big labels/distributors, who aren't receiving enough money for Spotify to matter to them that much. Whereas Spotify completely cannot afford for labels to pull their music.

The problem is beyond sheer numbers of subscribers as well, Spotify needs people to listen to less, so that the money generated per song play increases and makes them a more attractive distribution medium. Radio stations do this by having DJ's talk lots between songs and varying the popularity of the songs they play, so they don't play too many new and expensive songs. The only tool Spotify has to alter the revenue per song play is changing the subscription price.

</comment><comment><USER19> I wonder how many new fans those artists got from being on spotify, how many people then paid to see them live and recommended them to their friends. It's difficult to put a price on that.

</comment><comment><USER20> This is a gamble that can turn both ways; what these labels/artists now risk is that they basically no longer exist, or are no longer discoverable, for a large portion of listeners.

<comment><USER21> The could also be thinking of building an in-house product similar to Spotify.

Every label is probably thinking, "we can pay some web dev to build us this". Well, I hope they all do and see what happens.

</comment></comment><comment><USER22> Oof. The sole reason I have a Spotify subscription is for its vast dubstep catalog. Checking out my "favorites" playlist today, I hope I don't see half of them gone!

<comment><USER22> Yep. Lots of stuff gone. Joker, Mount Kimbie, Luke Vibert, Distance. Huge names, gone.

This is why subscription models don't work when you're subscribing to the middleman. If a label suddenly wants to yank their music, they can.

It has nothing to do with Spotify remaining solvent.

<comment><USER20> _This is why subscription models don't work when you're subscribing to the middleman. If a label suddenly wants to yank their music, they can._

Without a middleman, it's going to be a pain to subscribe to multiple labels. It would require vast improvements in protocols/infrastructure in an industry that's extremely slow moving.

<comment><USER23> Billing would probably the hardest part - customers won't want to pay different values each month depending on the labels the music they listened to happened to belong, in my opinion. They (We) want flat, predicable bills, and that involves having a middleman acting as a "financial buffer", which charges the same to every client but pays different values to each label.

</comment></comment></comment></comment><comment><USER3> When I read this I was _not_ expecting it to be STholdings! That's about half of my favorite new music right there. Glad I didn't buy a subscription now.

</comment><comment><USER24> If more gaps in Spotify's library really makes people purchase albums again?

I know it makes me switch to Grooveshark.

</comment><comment><USER25> Scumbag STHoldings. Withdraws music from Spotify. Available in Soundcloud.

<comment><USER3> They only publish clips to soundcloud.

Also, it's their music, they can do whatever they want with it.

</comment></comment><comment><USER26> IMO Spotify is overrated, www.tubalr.com is where its at.</comment>


Canadian firms plan to try to make car from hemp - <AUTHOR> http://content.usatoday.com/communities/driveon/post/2010/08/canadian-firms-plan-to-try-to-make-car-from-hemp/1

<comment><USER2> I don't know about the hemp, ut what the world needs is an open source car. you know, one that works like the PC where can upgrade every subsystem as it wears out with something way better than original.

ok, so cars need a lot of integration so it probably wouldn't be a great car, but it sure would be cheaper.</comment>


Live stream of Instagram selfies with Nicolas Cage's face - <AUTHOR> http://feelingcagey.com/

<comment><USER2> One question: Why go for Rails + Pusher? Seems to me this is something that would be a perfect example for something to be ran on NodeJS.

Not to swing the Rails vs Node debate here. Pure curiosity. I've started my first Ruby/ Rails4 project for a lead fulfillment /support / admin of all sorts related backend, and building this in Rails seems like a clear choice and a blaze compared to any PHP framework.

But now as I'm starting to think about APIs and real-time presentation through WebSockets, it feels to me this stuff has not matured enough in Rails to do this easily enough without needing a 3d party like Pusher (?) (I've been looking at tubesock but it seems minimal). In other words, the Rails+puma+pusher serer seems redundant to me if you would have used Node. You do seem to make a clear statement about using MongoDB for "web scale". So I´m wondering why you would want to go the Rails way for a one-page app built for and relying on concurrency.

</comment><comment><AUTHOR> A little side project I built this past weekend. Source is here: [https://github.com/joshmcmillan/feeling_cagey](https://github.com/joshmcmillan/feeling_cagey). Uses OpenCV and some other goodies. Criticism of all varieties welcome.

<comment><USER2> awesome, thanks for the source luke!

</comment></comment><comment><USER3> This is on Yahoo front page. [http://movies.yahoo.com/blogs/movie- news/feeling-cagey-ve-go...](http://movies.yahoo.com/blogs/movie-news/feeling- cagey-ve-got-just-thing-001044027.html)</comment>


Ask HN: So, what the heck do VPs do? - <AUTHOR> I have experience working in a FANG and multiple other tech companies.
In a deep sense, I believe I understand the role of most positions, from the C-level down to junior employees.
However, I don't understand what VPs do, or rather, what goes on at upper management. This is odd, considering I believe what goes on at the CEO level. So, what do VPs do? To help give context, here is a bestiary with a description of the roles:
<comment></comment><comment></comment><comment></comment><comment></comment><comment></comment><comment></comment><comment></comment><comment>---
Worker (SWE, Developers, and the many other kinds of white collared staff, HR, sales, CSR, etc.)
- Do the work.
- Although "lowest" in the hierarchy, workers do not necessarily have low status. Star employees (i.e. Senior Staff Engineers at Google) can have comp and influence greater than directors.
Line Managers (Manager, Senior Manager, Project Manager, Product Manager): - The conventional manager who supervises, reviews employees.
- Importantly, they do not determine strategic direction (even though they often desire to or represent themselves as such).
- Their value is making sure workers are productive, providing a smooth interface from upper decisions to worker day to day.
- Sometimes have considerable value as ICs.
Senior Manager (Director):
- Handling execution and related politics from above.
- Has sense of actual business but performs no IC work. Furthermore, work that is performed done is managed by line managers.
- Vice President: ???
CEO or equivalent top officer(s):
- Set vision and goals for the company. Instill these goals in senior management.
- Often the CEO's value is far removed from the ostensible company operations. For example, some companies have 'charismatic' CEOs or CEOs whose value is in bizdev or raising money.
Honorary mention (CTO/CFO/other C officers):
Basically senior managers under the CEO with domain specialties. </comment><comment><USER2> Where the CXO is generally focused on vision and externally facing aspects of strategy and growth, the VPX is typically focused on the internally facing aspects and the execution.

CTO: how does Internet of Things fit into our strategy as an underwater basket weaving company? How does that position us relative to Baskets Inc? What upstarts do we need to look out for?

VPE: what sorts of experts should we hire for our new IoT department? How should the department be organized? What leaders does it need? Should we prioritize building for Siri or for Alexa?

</comment><comment><USER3> The VP of something should be more or less the best at that thing in the organization. The VPs in each area should theoretically be considerably better than the CEO is at that area. Specifically, at leading that area, which usually comes from deep functional experience in that area as a specialist. The career path of IC, founder, player-coach CEO, investor is one thing, but the alternative is specialist skills in a function (ie. marketing coordinator, manager, director and finally VP).</comment>


How many fart apps do we need? - <AUTHOR> http://blog.acthompson.net/2013/05/how-many-fart-apps-do-we-need.html

<comment><USER2> Good point and a funny post. Although what he sees as fart apps are now "startups" that were not built but "founded" by "founders" causing major "disruption" to all billion dollar industries, unless they are addressing some multi- million dollar "niche".

It's great that people started to ask this question. In past this type of projects were entertained as a hobby, hopefully making a little impact or improving a programming skill.

I hope we get back to basics soon and bloggers will stop promoting entrepreneurs who are just looking for a lottery ticket to next instagram, but entrepreneurs who build reasonable and durable businesses.

</comment><comment><USER3> Fun is what is missing in mainstream education...

As an "old-fart" my-own-self, it is hard to see through the eyes of younger generations.

Fart apps are a fad, and will fade in time, with some revisits from time to time.

The key could be to find MORE fun items for students to go after, rather than impose limits...

william...</comment>


Software Dogengineer - <AUTHOR> https://www.google.com/about/careers/search/#!t=jo&jid=32155002 <comment><USER2> One Day Doge Talk is going to be a programming language.

<comment><USER3> [http://zachbruggeman.me/dogescript/](http://zachbruggeman.me/dogescript/)

<comment><USER2> > _such woof much foo bar bat_

What next, the International Obfuscated DogeScript Contest?

</comment></comment></comment><comment><USER4> It makes me uncomfortable that there's an expectation to be part of a certain culture in order to be developer.

</comment><comment><USER5> __Responsibilities

        write much web-based code. very programming. so <script></script>.
        so participation in code review. much scary. no cry pls.
        type type type on computer.
        very building. much system OS/corn. such complicate.
        wow.

Could be [mis]construed as making fun of Asian accents.

<comment><USER6> How???

<comment><USER7> See "The Simpsons" episode CABF01, "Lisa the Tree Hugger", for some good examples of stereotypical comedic Asian immigrant speak:

\</comment></comment></comment><comment></comment><comment>--

Bart: Man, I need a job.

[passes the You Thai Now restaurant]

Thai Man: [comes out of restaurant] You need job? I have job for you.

[they both enter the restaurant]

You take these.

[hands Bart a stack of doorknob signs]

You hang Thai menu on door. I get more business. Send daughters to small liberal arts college. Swarthmore, maybe Sarah Lawrence. Call professors by first name. Ha -- dynamite!

Bart: Hang 'em on the door. Got it.

...Bart finds the job too hard, and tosses then menus in dumpster. The restaurant owner finds him...

Thai Man: You quitter! [sing-song:] Quitter boy! Quitter boy!

Bart: I'm sorry.

Thai Man: Now restaurant fail. Children go to state college. Serious students powerless against drunken jockocracy. Baseball hats everywhere.

Bart: Hey, man, this job is too dangerous.

Thai Man: Menu boy no be coward, like shrimp; menu boy be brave, like prawn.

...montage of Bart training...

Thai Man: Menu boy must move silently, like ghost. Leave no footprint, only lunch specials.

[hands Bart some menus]

Bart: Hai! [Bart flips around, covering a wing chun dummy with menus]

\</comment><comment></comment><comment>--

The text quoted by Edmond does have the same kind of speech patterns.</comment>


Show HN: Hobson is an open-source automation platform - <AUTHOR>

Hobson is an open-source automation hub and aggregator for the Internet of Things (IoT). It integrates smart devices from many manufacturers and makes them available via an intuitive web-based console and simple REST API.
Hobson's goals are:
- ease of use for both end-users and developers - no cloud service requirement - high modularity - comprehensive documention - small footprint for resource-limited devices
http://hobson-automation.com
Be sure to check out the newly published developer video.
Thanks for looking! <comment><USER2> This is the product I have been looking for. I have my Venstar Thermostat, Philips Hue Lights, and my Foscom camera all working through Hobson seamlessly. I was surprised to find out that Hobson auto discovered my Thermostat and Foscom camera, and there was no configuration required on my end, other than adding the plugin from the menu. GUI is super simple to use. Great job on this. =-DA</comment>


Building iPad Pro features in Swift - <AUTHOR> https://www.swiftbysundell.com/posts/building-ipad-pro-features-in-swift <comment><USER2> I just don't see how an iPad Pro could ever really work as a computer replacement for true professional workflows. I'm talking about multitasking between final cut, building a website, creating assets in photoshop, taking screenshots, downloading things from an email...these are daily tasks for me. An iPad would struggle to do one of these at a time let alone all of them at once. iOS is just too limited to ever make it a real "pro" machine. For limited things like a photography workflow or photoshop workflow, maybe, if that's all you do. So I think it's time to give up on the idea of an iPad as a true pro machine. It will never replace your laptop and Apple doesn't want it to. It's a shame though because the hardware is certainly capable enough. It would require Apple basically throwing out iOS for iPad and designing a whole new way of interacting just for iPad. iOS is great for iPhones but not great for professional applications. It would be cool, but I doubt Apple will do it.

<comment><USER3> > An iPad would struggle to do one of these at a time let alone all of them at > once.

You haven't touched a modern iPad, have you? Not only do they not 'struggle' to do one of those at a time, they're butter smooth at it. The workflow/task juggling aspect is definitely an issue, but there is _nothing_ preventing an A10x or A12x iPad from doing any of those things with all the performance you'd expect from a $3k+ MacBook Pro.

<comment><USER4> GP is talking about how the design of iOS is preventing one from doing all those tasks in a satisfactory way, but not the hardware.

For example I could be editing a movie and waiting for it to export. Then I switch to a different app and start editing my photos. There is a Task Completion background API to allow the former to continue to run, but there is no guarantee nor any notification when iOS decides my new photo editing app is consuming too much resources and jettison or kill the movie app. It contributes to this nagging feeling of needing to switch back to the background app so that iOS would keep it alive.

It's just an app management model ill suited to professional work.

<comment><USER5> As a workaround, you can put the app into split screen and the OS will keep it alive because it is still in the foreground.

<comment><USER6> Seems like trying to do anything serious on an iPad is a story of one workaround after another. Why would it be worth the hassle?

<comment><USER5> It's thin, light, and has better specs than my laptop?

</comment></comment></comment></comment></comment></comment><comment><USER7> Using UIPanGestureRecognizer for gestures that should be recognized immediately on touch down is a common mistake I see a lot of people make. The problem is UIPanGestureRecognizer doesn't actually start recognizing until the touch has moved a short distance, and at this point, you can't recover the original touch location, only the location at which the gesture recognizer began recognizing.

The solution is to use a UILongPressGestureRecognizer with minimumPressDuration set to 0. With this configuration, it will begin recognizing immediately on touch down, allowing you to take action even before the user has moved their finger (or pencil).

<comment><USER8> How do you track the translation during the gesture if you use UILongPressGestureRecognizer? Do you have an example you can link too?

<comment><USER9> Admittedly you do lose the convenience methods from UIPanGestureRecognizer (sure would be nice if Apple would add them to UILongPressGestureRecognizer too), but you can recover translation just by grabbing the location of the recognizer in the associated view when the state moves to .began and then subtracting that from the current location on every subsequent .changed state callback. Calculating velocity is harder of course, but you could do it without too much difficulty by recording the previous location and timestamp and using that to calculate an instantaneous velocity (I'm not sure if this is what UIPanGestureRecognizer does or if it tries to smooth the velocity at all using multiple "frames").

I don't have any linkable examples offhand, but at a previous company one of our standard interview questions was to implement custom drag & drop of a view using a gesture recognizer, and our reference app used UILongPressGestureRecognizer because it let us do such nice things as visually "lift up" the view (scale it up slightly and add a drop shadow) the moment your finger touched it.

<comment><USER10> That's an incredibly specific interview question... there's a lot more to iOS development than drag and drop. How has it fared for you?

<comment><USER9> Actually quite well. The fact that it's drag & drop is pretty irrelevant, except in that it's not something the interviewee has likely done before because it's not a very common thing to interrupt.

What's more important is that it's fairly basic usage of UIGestureRecognizer (which _is_ a common thing to need, at least if you're doing any kind of UI development) as well as some basic management of state involving 2 views (the view being dragged, and the destination view it's dropped into).

<comment><USER9> s/interrupt/implement/

</comment></comment></comment></comment></comment></comment><comment><USER11> Cool hardware, but there's no way I could justify the price to myself with the limited functionality of iOS as it stands today. A lot Apple tech writers/podcasters keep saying "just wait for iOS 13!", but the earliest a developer is going to see iOS 13 is 6 months from now at WWDC, the earliest the general public will get any additional functionality is 11 months from now. That's a LONG wait to see if any changes will be made to make these capable of doing real work for all but artistic professionals.

<comment><USER12> I think given the specifications of these devices, the pricing, while definitely high, is not completely unreasonable for what the hardware can do - these iPads do things no currently shipping Mac notebook can - 120hz refresh, 240hz touch/pen tracking, FaceID, performance in similar ballpark to a $3k MacBook Pro while passively cooled (!) etc etc.

It's just such a shame iOS isn't quite ready yet to provide the kind of computing experience the hardware is clearly capable enough to deliver. If this is going to be priced like a macOS machine, it needs to offer a reasonable set of Mac style functionality - for me this means proper multi- user support so my family can all use the device with their own accounts and services and ideally some kind of windowing model for the OS to better handle multi-tasking.

iOS will need to answer a lot of questions in the next few years that it has so far steadfastly avoided. Apple bragged how these iPads can drive 5k monitors via an Xbox one S performance class GPU, but without indirect input methods (e.g. a mouse) this feature is really not much use for anything other than display mirroring. Today I only ever use video out on iOS devices for occasional video playback on TVs, I suspect I'm not alone in this.

iOS will likely either need to support a mouse or Apple will have to create some kind of standard for multi-touch external monitors that can allow iOS application input via touch on the external display if professional class workflows using multiple monitors on iOS is ever going to be a mainstream thing the way it is on the Mac.

<comment><USER11> _I think given the specifications of these devices, the pricing, while definitely high, is not completely unreasonable for what the hardware can do - these iPads do things no currently shipping Mac notebook can - 120hz refresh, 240hz touch /pen tracking, FaceID, performance in similar ballpark to a $3k MacBook Pro while passively cooled (!) etc etc._

Totally agree, and if they had XCode or a decent native C# IDE on there I'd be at an Apple store right now forking over fist fulls of cash.

<comment><USER13> Regarding C#,

[https://itunes.apple.com/us/app/continuous-net-c-and-f- ide/i...](https://itunes.apple.com/us/app/continuous-net-c-and-f- ide/id1095213378?mt=8)

</comment></comment></comment></comment><comment><USER14> When it comes to programming, I just can't see myself typing thousands of lines of code on a tiny iPad screen, no matter how clever the gestures and multitasking in iOS gets.

Maybe one day the iPad Pro + stylus will do wonders for visual programming languages like VVVV (can't think of any others).

<comment><USER5> > When it comes to programming, I just can't see myself typing thousands of > lines of code on a tiny iPad screen

iPad Pro has a 13 inch screen; that's the same size as my MacBook Pro's display. With a good keyboard, such as the one Apple sells, I don't see why it should be difficult to write code in an iPad.

<comment><USER15> I find it difficult to write code on even a _15_ -inch MBP display. It feels very cramped to me. There's barely room for 2 adjacent windows, so I spend all my time scrolling and switching desktops and re-layering windows.

13" is barely bigger than the 12" display on my Apple IIgs (late 1980's), or my first laptop (mid-1990's). That was a perfect size for a VT100 emulator (it's the same size as the original 1978 VT100!), but that's not how I write software any more.

The same size screen is actually relatively worse than 20 years ago, because these days all documentation is online, so it has to share my screen.

<comment><USER16> Same here. It's painful to write code in the 13" screen that I always connect to an external display if one is available.

</comment></comment></comment></comment><comment><USER5> > To avoid having to re-create the same key commands multiple times, and to > only do so when actually needed, we'll use a lazy property to keep track of > them internally as well

Honestly, I think this is a premature optimization. I don't think it's worth trying to prevent the allocation of a four element constant dictionary, especially one which requires awkward syntax (indirection through a computed value) to work because it must fulfill a protocol requirement.

</comment><comment><USER17> I can imagine that Apple is ready to release an OS for the iPad with the full functionality (file system, mouse & cursor) and would do so in the event of the more expensive and port-lacking new Air undersells. Wouldn't surprise me if they had it ready as a backup plan, especially seeing the success of tablet computing with the MS Surface.

<comment><USER12> > especially seeing the success of tablet computing with the MS Surface.

MS Surface sales last quarter: 602,000. iPad sales last quarter: 9.6 million. Even the Mac shifted over 5 million machines, all the more impressive when one considers that for much of that quarter staple models such as the Air were long, long overdue a refresh. The Surface sales figure presumably includes models that aren't even tablets - the "Surface Laptop" is likely one of their best sellers I'd assume, given the attractive combination of price, design, specs and generally positive reviews.

While I too would love to see the features you suggest in iOS, Apple's success in the tablet space is largely unprecedented for a computer manufacturer.

<comment><USER18> I find it so weird that people continually talk about apple as if it's producing one failure after another and they need to start copying less successful products, when it's the largest company in the world and has more profits by far than any of their competitors in any market they're in.

</comment></comment></comment><comment><USER19> Great article again. Sundell is quickly becoming one of my favorites besides mainstays like objc.io

</comment><comment><USER20> What a language!</comment>


Software Engineering Lessons from Aviation - <AUTHOR> https://riceo.me/posts/software-engineering-lessons-from-aviation/ <comment><USER2> I think there's a lot to learn from the aviation industry. I did a talk at my companies internal conference on this (turned into words at [https://medium.com/ingeniouslysimple/why-dont-planes- crash-1...](https://medium.com/ingeniouslysimple/why-dont-planes- crash-14a0579a5e2d)).

For me it's the mindset that differs. Too often as software engineers we find a bug and just fix it. Aviation goes a step deeper and finds the environment that created the bug and stops that.

Unfortunately, the recent 737 MAX incidents seem to have changed this. From what I understand the reaction to the problems sounds more like what I'd expect a software business to do, rather than the airline industry!

<comment><USER3> _> as software engineers we find a bug and just fix it. [...] Unfortunately, the recent 737 MAX incidents seem to have changed this._

I think there's some nuance about MCAS that's lost in all the media reports. As far as I understand, the MCAS software didn't have a "bug" in the sense we programmers typically think of. (E.g. Mars Climate Orbiter's software programmed with incorrect units-of-measure.[0])

Instead, the MCAS _system_ was poorly _designed_ because of financial pressure to _maintain the fiction of a single 737 type rating_.

In other words, the MCAS _software_ actually did what Boeing managers _specified_ it to do:

1) Did the software only read a _1_ AOA sensor with a single-point-of-failure instead of reading _2_ sensors? Yes, because that was what Boeing managers wanted the software to do. It was purposefully _designed_ that way. If the software was changed to reconcile 2 sensors, it would then lead to a new _" AOA DISAGREE"_ indicator[1] which would then raise doubts to the FAA that Boeing could just give pilots a simple iPad training orientation instead of expensive flight-sim training. Essentially, Boeing managers were trying to "hack" the FAA criteria for "single type rating".

2) Did software make adjustments of an aggressive and unsafe 2.5 degrees instead of a more gentle and recoverable 0.6 degrees? Yes, because Boeing _designed_ it that way.

Somebody at Boeing _specified_ the software design to be _" 1 sensor and 2.5 degrees"_ and apparently, that's what the programmers wrote.

I know we can play with semantics of "bug" vs "design" because they overlap but to me this seems to be a clear case of faulty "design". The distinction between design vs bug is important to let us fix the root cause.

The 737 MAX MCAS software issue isn't like the Mars Climate Orbiter or Therac-25 software bugs. The lessons from MCO and Therac-25 can't be applied to Boeing's MCAS because that unwanted behavior happens _in a layer above_ the programming:

\- MCO & Therac: design specifications are _correct_ ; software programming was _incorrect_

\- Boeing 737MAX MCAS: design specifications _incorrect_ ; software programming was "correct" \-- insofar as it matched the (flawed) design specifications

[0] [https://en.wikipedia.org/wiki/Mars_Climate_Orbiter#Cause_of_...](https://en.wikipedia.org/wiki/Mars_Climate_Orbiter#Cause_of_failure)

[1] yellow "AOA Disagree" text at the bottom of display: [https://www.ainonline.com/sites/default/files/styles/ain30_f...](https://www.ainonline.com/sites/default/files/styles/ain30_fullwidth_large_2x/public/uploads/2019/03/aoa_vaneindicator_aoa_disagree_lg2.jpg?itok=vNHrwopw)

<comment><USER4> That's a different issue. Aircraft systems are classified as to degree of risk. This is from MIL-STD-882C.

\- I Catastrophic - Death, and/or system loss, and/or severe environmental damage.

\- II Critical - Severe injury, severe occupational illness, major system and/or environmental damage.

\- III Marginal - Minor injury, and/or minor system damage, and/or environmental damage.

\- IV Negligible - Less then minor injury, or less then minor system or environmental damage.

Now, face it, most webcrap and phone apps are at level IV. Few people in computing outside aerospace regularly work on Level I systems. (Except the self-driving car people, who are working at Level I and need to act like it.)

MCAS started as just an automatic trim system. Those have been around for decades, and they're usually level III systems. They usually have limited control authority, and they usually act rather slowly, on purpose. So auto trim systems don't have the heavy redundancy required of level I and II systems. Then the trim system got additional functionality, control authority, and speed to provide the MCAS capability. Now it could cause real trouble.

At that point, the auto trim system had become a level I system. A level I system requires redundancy in sensors, actuators, electronics, power, and data paths. Plus much more failure analysis. A full fly-by-wire system or a full authority engine control system will have all that.

So either MCAS needed to have more limited authority over trim, so it couldn't cause trim runaway, or it needed the safety features of a Level I system. Boeing did neither. Parts of the company seem to have thought the system didn't have as much authority as it did. ("Authority", in this context, means "how much can you change the setting".)

Management failure.

<comment><USER5> > So either MCAS needed to have more limited authority over trim, so it > couldn't cause trim runaway, or it needed the safety features of a Level I > system.

There are two other dodgy things going on. One you can't disable MCAS without totally disabling the electric trim. And the mechanical advantage of the manual trim isn't sufficient to re-adjust trim once it's too far out. And hasn't been _forever_.

</comment></comment></comment></comment><comment><USER6> Checklists and written procedures are very important. One of the earlier things I did when coming into my company was create a written procedure for software upgrades until we had time to automate it with ansible.

One thing I have not had very good discipline about is I want to use checklists both for code submitted for review and when I'm doing reviews. Lint checkers etc. can only go so far.

If anyone has published checklists for code reviews I'd be curious to see them. This one seems reasonable: [https://www.liberty.edu/media/1414/%5B6401%5Dcode_review_che...](https://www.liberty.edu/media/1414/%5B6401%5Dcode_review_checklist.pdf) though I'd add concurrency to the list.

</comment><comment><USER7> This was great!

> 1\. Don't kill yourself

> 2\. Don't kill anyone else

Could we reorder these, though? Every once in a while a plane will hit a house and kill its occupants (and the pilot, usually) and it's so awful. I think not killing others as a pilot is so much more important than not killing yourself.

<comment><USER8> That ordering reminds me of the first rule of search and rescue: don't create another victim.

If your job is to save a life and that life depends on you, you don't do anyone any favors if you die

</comment></comment><comment><USER9> "...plenty of episodes of Mayday/Air Crash Investigation available on Youtube too. (Be warned though, all doomed flights take off from one of the busiest airports in the world .)" Great show. Comment is spot on, and don't forget "investigators were under extreme pressure".

</comment><comment><USER10> Nathan Marz talks about this previously, with unique insights: [http://nathanmarz.com/blog/how-becoming-a-pilot-made-me-a- be...](http://nathanmarz.com/blog/how-becoming-a-pilot-made-me-a-better- programmer.html)

</comment><comment><USER11> Though article isn't about software development in the aviation industry, a few thoughts on that:

The industry is really slow to change its practices and tools. Like the use of C for most software, I do feel a more safer language out to be preferred.

Use of 1553 bus for inter device communication, the bus and protocol aren't general, it is very opinionated/rigid about the manner in which communication should happen. And the hardware parts for it are horrendously expensive compared to most ethernet, IP equipment. There is an aviation ethernet standard, but adoption of it has been slow.

<comment><USER12> _it is very opinionated /rigid about the manner in which communication should happen_

This could be a strong factor in its popularity. If things _must_ happen in a certain order, then the behavior of the system becomes easier to verify. Ease of verification should never be understated in safety-critical systems.

<comment><USER11> Yet the industry uses largely the C language, which isn't a model for safety or ease of verification.

<comment><USER13> It is, compared to other languages, because it's simple and deterministic. The #1 most important thing with avionics systems and software is determinism. That's why they even disable CPU caches on avionics systems.

</comment></comment></comment></comment><comment><USER14> Not killing yourself and a checklist (like we learned in driver's ed but apply informally at best) also apply to driving a car.

<comment><USER15> Uh, no. In a car, if things go badly you pull off the road and work on a solution. If things to really badly, you have seatbelts, airbags, crumple zones, and a thick frame to help you out.

In an airplane, if things to badly, you keep flying until you land. If things go really badly, remember that everything is built to be light weight, and unless the crash is well controlled, everything will be destroyed and everyone will die. If your engine quits, your cabin ruptures, your instrumentation fails, you keep flying. And you need instruments; in poor visibility, your own sensory inputs are in fact faulty, and won't help you figure out which way is down.

Unlike in a car, where it's pretty obvious where the ground is, for example.

</comment></comment><comment><USER16> I still hold my opinion that checklists are for hardware issues. One should not be filling them on software tasks. Instead, software is automated, automatically tested and automatically verified - routine checks are an anti- feature and inversely correlated to quality.

</comment><comment><USER17> The article talks about pilot procedures, not engineering procedures specific to aviation.

</comment><comment><USER18> Thinking of aviation makes me remember the impact of doing things right.</comment>


What is RubySpec? - <AUTHOR> http://www.engineyard.com/blog/2009/what-is-rubyspec/

<comment><AUTHOR> Are there other multi-implementation languages that have an executable language spec like this?

<comment><USER2> Perl 6.</comment></comment>


Prehistoric humans and archaic relatives paired off twice - <AUTHOR> https://www.nature.com/articles/d41586-018-03300-7 <comment><USER2> Likely it happened a bunch of times and only two of them survived to present.

</comment><comment><USER3> Not a very detailed article, not an interesting read at all.</comment>


Siemens Electric Airplane Flies Us Toward the Future - <AUTHOR> http://cleantechnica.com/2016/07/06/siemens-electric-airplane-flies-us-toward-future/ <comment><USER2> The most recent episode if "fully charged" was also about a prototype electric acrobatic plane:

[https://m.youtube.com/watch?v=Xe1g1JrRRkY](https://m.youtube.com/watch?v=Xe1g1JrRRkY)

It reminded me of Tesla's evolution, where they found a niche where they can apply the benefits of electrics and rethink some basic elements of the platform most notably in the double propellers.

<comment><USER3> I've been flying electric powered high performance model airplanes (mostly F5B class) for decades. I'd like to think the electric r/c flight industry has been trenching this territory for quite some time. With the next 2x improvement in battery energy density cars and possibly full scale planes are going to make a huge leap forward.

Here's a video of F5B class R/C planes. It's hard to convey just how insanely fast these things are. Huge power to weight ratio and very aerodynamically efficient.

You can hear the crowd gasping at the performance they see. Also note that the motor is only turned on for a second or less at at time. If the motor were on longer these planes would reach 1,500 feet in 5 to 10 seconds tops.

[https://www.youtube.com/watch?v=T0z9iy2SJA0](https://www.youtube.com/watch?v=T0z9iy2SJA0)

</comment></comment><comment><USER4> They never said anything about batteries and efficiency, the primary constraint holding back electric aircraft.

<comment><USER5> Exactly, sure the motor is super light. Great. What happens when you put enough batteries in the airplane for a ~2 hour flight? Just assume that at cruise it's only using 1/2 of the rated power. OK, now where do we find a 260kWh battery pack light and small enough to fit in the plane? That's a full 3x of Tesla Model S battery packs.

</comment></comment><comment><USER6> I'm surprised it's "nearly silent". I would have thought that the rotors, not the engine, were the bulk of an plane's noise.

<comment><USER7> Try standing next to one even at low rpm. Rotor noise becomes a factor at high rpm, but then the engine still is noisy itself. As a private pilot, small- aircraft engines are noisy as f... Among the reasons: No development at all for about two decades when the small-aircraft market was down (which is why you see so many built decades ago, then a big gap, and only in the late 1990s new developments started to come to market). Other reason, but it's part of the first one (due to the costs involved): being conservative. If you only have one engine and you have a very reliable one, that's what you keep using. Especially when the costs of developing something new and getting it approved - and you have to repeat that in different regions with different government agencies - are very high.

It is true though, when a propeller airplane flies overhead you get significantly more noise when it is directly perpendicular, when you get the most noise from the propellers.

Jet engines had a significant positive development in this area. On the small Livermore (CA) airport I had the chance to compare two small jets, an old one and a new one. The old one made me cover my ears. The new one - less noise than a Cessna, quite amazing.

In this context, an anecdote, but about noise on the inside: I always thought sitting in a glider would be quiet. It is - if you keep the little window shut. But then the cabin heats up too much (at least flying in California). I was very disappointed about my 1 hour in a glider.

On the other hand, sitting inside a small airplane the noise from the engine is significant and a big reason why you really want that active noise- cancelling headset.

I can relate to this pilot (except that if he had used a good headset he could have had it _much_ easier): [http://www.askthepilot.com/small-plane- misery/](http://www.askthepilot.com/small-plane-misery/)

Tip: When flying in a small piston-powered airplane, _always_ bring a good isolating headset, or ear plugs (or even both!). The movies are lying, those cockpits are as noisy as... I can't think of an equivalent, but it's on an "industrial level". Noise is a major stress factor in small aircraft aviation, as you could see from that pilot's article.

<comment><USER6> Interesting, thanks.

</comment></comment></comment><comment><USER8> How does the engine compare to a piston engine in terms of equivalent HP?

<comment><USER9> According to this[1] it's a 350HP electric motor.

[1]: [https://youtu.be/T_9-V73nT1k](https://youtu.be/T_9-V73nT1k)</comment></comment>