A few weeks ago I wrote about my experience at TEDxSF V ALIVE! and indeed that was an inspiring experience. Too often we are caught up in the back and forth motion of a routine, which stifles creativity and the desire to explore.

To live a balanced life one needs to be inspired, to step outside of one’s comfort zone and embrace what the greater world has to offer. This can be in the form of acting on a crush, off the beaten path travel or in my case meeting people from diverse and interesting backgrounds. Having had a relatively windy upbringing with both Kiwi and Chinese heritage, I could I am a new breed of generation X’ers born into a supranational identity – never too patriotic as too stifle an inherent desire to explore.

Being armed with this ethos, I signed up for a volunteer event over the weekend to help refugees stranded in Hong Kong. Going into the event, I must admit it has been a while since I’ve done this in IB and the objective wasn’t clear cut to build something tangible.

Upon arrival at the missionary shelter in Tsim Tsa Shui, the entire BarCap was greeted by a friendly group of refugees from a cornucopia of backgrounds. Present were refugees from the Middle East and Africa. As we waited they seemed all very brotherly, able to interact freely without cultural or racial divides. What tied all of these people together was their common predicament of being aliens with no rights in Hong Kong.

As the day progressed we switched locale to a lovely beach on the Kowloon side of Hong Kong. We were able to hear their stories individually and the length of time some of them have stayed is truly astonishing – 6 years for some. Behind all the jovial laughter one could really sense the intangible, but nonetheless tremendous impact of being in a foreign land without legal rights.

Imagine yourself to be displaced, and living on a stipend but not able to exercise your abilities to add value to society through employment. Put yourself in a situation where you do this for an extended period. The mind deteriorates because of this limbo state and it was really a testament to the human spirit how these refugees were able to remain cheerful and happy given how long they’ve lived in such a predicament.

For the Somalian refugees, it is an especially sad story given that Somalia has not had a legal government since 1991. More than half the country have been displaced externally. Though Hong Kong may be heaven compared to the streets of Mogadishu, the human free will to achieve will ultimately shine through and thus it is truly sad to see such stifling policies put in place on such capable individuals. In a very market sense, these policies are almost akin to planning.

Though the BarCap team did not build any houses or water taps, we did something just as substantial and that was to alleviate a dozen or so siloed human minds from the stationary nature of their lives. It was interesting to spend a day with them, seeing how they lived I realized I am myself.

Given the hustle and bustle of every mundane, one needs to go out of their comfort zone, explore a little bit, gain a new perspective, be grateful for where they are but always strive for more – to be the most holistic human being one can be.


So last week I was up in Vancouver for the International Student Energy Summit and I must say it was a really inspiring event which completely changed my view on the energy industry. That being said, Vancouver has also been a lot innovative than i had imagined, it is indeed a very green but also sustainable city.

I enjoyed being at the conference as I had the opportunity to debate on merits of the Enbridge Northern Gateway Pipeline debate as well as presenting in the final rounds of the FortisBC community energy challenge, which was to design a system proposal for the mayor of Sustainaville.

Aside from those activities though, some of the speakers had really new and interesting topics to present. My biggest takeaways from the conference are as follows:

Emissions Trading: There have been a string of government initiatives to promote the adoption of clean tech and abatement, but an effective emissions market is the only long term solution. With OECD countries up to their neck in debt, the distortion caused by the government cannot last.

It is only when you have market that can effectively quantify the externalities of emissions that clean technology and abatement become economically viable. It is the economics that ultimately underpins the success in our efforts. Despite all the criticism of the EU ETS, including windfall profits for utilities, emissions markets must be established for the long term. The introduction of the California ETS is vital for it acts as a model for other US states.

Nuclear Renaissance: Despite the Fukushima incident we are in a new nuclear renaissance. The stigma associated with nuclear technology has been attributed to incidents occurring at first and second generation facilities built in 60s and 70s. Even though there has been a public outcry against fission technology, it is very important to distinguish between sensationalist reactionary remarks and the realities of generation IV fission reactors.

Technology such as the pebble bed or travelling wave nuclear reactors are much more safer and advanced than the reactors which have faced troubles. No matter what the public has to say about fission technology, the reality is that nuclear energy is a low hanging fruit to addressing our emissions issues. Ultimately it is up the government to decide and with China’s continued push, there stands a very real chance that countries such as US and other developed nations will be coerced to pursue nuclear technology to prevent the growth and international expansion of a domestic Chinese nuclear industry.

Fusion is a Possibility: Fusion technology is not scifi anymore, it is very realizable within our lifetime. General Fusion gave a talk and their magnetized target fusion technique is very innovative, but could also achieve net gain fusion which the publicly funded institutions such as ITER much sooner.

The whole idea behind magnetized target fusion is a combination of traditional magnetic fusion (Tokamak design) and confinement fusion (NIF laser driven fusion). The use of pistons to generate acoustic waves to compress the plasma is very interesting and could provide net gain fusion by the end of 2012. On this track, a viable fusion plant could be achieved by 2020.

General Fusion is indeed a very exciting startup and if successful, their fusion technology could capture 80% of the world’s electricity market which would allow them to become the world’s first trillion dollar company by valuation.

Overall, I did learn a lot from the conference as the speakers really did bring refreshing ideas. It was a fun few days in Vancouver especially given my opportunity to debate and to present in front of an esteemed audience of industry experts and graduate students.

So I’m in Vancouver right now doing the FortisBC Energy Challenge as part of the International Student Energy Summit.

My team has made a video on the merits of district energy systems. Please show your support by taking a look

Smart Grids

Random Walk for 1000 trials generated in R

So I am stuck for a while at SFO waiting for my flight to Vancouver tonight. I thought it’d be the perfect time to collate thoughts on my skyrocketing AT&T bill with the pending AT&T T-Mobile deal. Though there have always been traditional arguments for economies of scale, I strongly believe there needs to be more telecommunications competition in the United States.

Back home in New Zealand Vodafone’s prepaid service is just fine for my basic needs. The consumer in the US is faced with hidden tigers of fees waiting to pounce on one’s monthly telephone bill. Companies such as LightSquared which are introducing a wholesale approach to the leasing of spectrum is a positive step for the US telco industry, but not the greater consolidation of providers.

M&A in industries of such strategic importance has always been fraught with regulatory oversight, but a quick look at the Herfindahl-Hirschmann Index (HHI) for market atomization reveals in a deal involving the consolidation of such a large amount of market.

Below is a chart of pre-merger market share in the US:

The US Telco space is already considerably consolidated with 3 carriers accounting for 77.5% of market share. Let us now take a look at the post merger market share:

Post merger, AT&T will have approximately 43% of the US market share. This is an extremely large concentration in the hands of one company. To get a sense of the scale of this market share shift we must analyze this merger in the context of the HHI.

According to the US Dept. of Justice/Federal Trade Commission the spectrum of market concentration is organized by the HHI into the following three categories:

Unconcentrated: (HHI below 1,000). A merger resulting in an HHI below 1,000 is considered unlikely to have adverse competitive effects.

Moderately concentrated: (HHI between 1,000 and 1,800). Mergers which result in an increase in the HHI of less than 100 points in moderately concentrated markets post-merger are unlikely to have adverse competitive consequences; those resulting in an increase in the HHI of more than 100 points in moderately concentrated markets post-merger potentially raise significant competitive concerns.

Highly concentrated (HHI above 1,800): Mergers which result in an increase in the HHI of less than 50 points, even in highly concentrated markets post-merger, are unlikely to have adverse competitive effects. Mergers resulting in an increase in the HHI of more than 50 points in highly concentrated markets post-merger potentially raise significant competitive concerns. When the post-merger HHI exceeds 1,800, it is considered that mergers producing an increase in the HHI of more than 100 points are likely to create or enhance market power or facilitate its exercise.

Based on the DOJ’s definitions let us now analyze this merger in the context of the HHI.

Pre-Merger HHI

HHI = 322 + 112 + 34.52 + 22.52 = 2841.5

Clearly this HHI indicates that the market is already highly concentrated, but whats more startling is the change in the HHI.

Post-Merger HHI

HHI = 432 + 34.52 + 22.52 = 3523.25

Change in HHI = 681.75

Under those DOJ guidelines, This change in HHI not only far exceeds its terms on the level at which a merger becomes a concern, but it also demonstrates a marked increase in the market power for the remaining competitors.

Looking from the HHI standpoint alone, the numbers already make the deal hard to justify, but as with M&A multiple fronts must be considered. For the interests of the US consumer though, I would hope the market remains free and competitive.

Yesterday I was debating on my attendance for TEDxSF. The day wasn’t the most pleasant with a heaving spattering of rain. I ended up going anyways and never looked back on that decision. I must say that TEDxSF V ALIVE! was absolutely amazing. It was one of the few places I found in the Bay Area which had such a great culmination of interesting people who see a problem and know how to fix it.

You know you’ve had an interesting day when you’ve met an Indian who grew up Brazil who is fluent in Hindi, Portuguese and English. Or when you meet an aspiring rapper who also wishes to make an impact through NGO work, a freak CS dropout working on improving computer science education at a young age and the co-founder of Lookout. Though these people have very diverse backgrounds, what binds them together is their humanity and desire to live a fulfilling life. These people are not tools, but rather the agents of change to issues of concern to them. I was indeed very impressed and inspired.

Perhaps the pinnacle speaker for me was Andres Torres, the Giants player whom recently made the MLB after 12 years in the minor league. His story was one of extreme perseverance. He arrived in the US at the age of 18 and began practicing his swing by batting against the mattress which he slept on. He worked his way up into the minor leagues, but found himself stuck. Presented with circumstances in which most of other players would’ve given up and sought other careers, he kept at it and eventually broke into the MLB after 12 grueling years. This to me is perseverance and also extreme fortitude to withstand criticism and white noise that distract one from their path in life.

TEDxSF was my second TEDx event and I would definitely say that the quality of attendees and speakers trumped my wildest expectations. The beauty of TED is its ability to disseminate this form of acute form of humanity and desire for action to a greater audience to inspire creation as opposed to subjugation. This form of inspiration is just as important as the hard scientific research being conducted in the fields of biotech and quantum computing. In short, TEDx was really emblematic of my expectations of the Bay Area as being the innovation capital of the world.

As part of my summer reading list, I have recently finished Emanuel Derman’s “My Life As A Quant”, which is a biography of his transition from the field of theoretical particle physics to high finance on Wall St. Derman’s book is enjoyable for its realism in depicting the “elite” world of particle physics and quantitative finance.

Unlike more academic books on finance, Derman’s approach to explaining models he worked such as “jump diffusion” or “implied volatility trees” allows easy following and thorough of the reasons behind the incorporation of such features into then existing models in quantitative finance. He really takes his time to break down the mathematical formalities which sometimes limit the audience of academic papers. In this respect, his tenure on Wall St has allowed him to become the medium through which highly theoretical ideas can be conveyed and realized in the real world.

I find this pragmatic approach very admirable, as what is the use highly theoretical works which can only be understood by a few dozen individuals in the world? What appreciable change does such an esoteric work bring to the world? This is a question which Derman poses and answers well with this intuitive explanations of otherwise complex and esoteric subjects. Moreover, his final points on the differences between models in physics and finance have strong resonance with someone like myself whom has been fascinated with the modelling of human behavior.

Unlike physics, models pertaining to human interaction cannot be absolute but rather an estimate. To rely blindly models is indeed a flaw, although I am not prepared to jump ship on yet on the belief of an elegant unified theory of markets in finance.

Today, I had the pleasure of meeting up with Lena who heads the Paintbrush Diplomacy effort at Berkeley. Paintbrush Diplomacy is a wonderful program aimed at promoted global cultural understanding in the next generation through the exchange of artwork. For practical purposes, I would be delivering this package to a group of disadvantaged children in Hong Kong. I would then supervise these children in painting artwork to a specified them which this year is related to the environment. The artwork painted in Hong Kong would be brought back and then separated for other diplomats to deliver to other parts of the world.

Upon opening the package I was delighted to see artwork from a 10 year old Nigerian girl which depicted her house. I was truly delighted at the global reach of actions. By acting as a conduit in the exchange of ideas, I felt to some sense of the word very excited with this mini project I would be undertaking on the side in Hong Kong. On reflection, looking at the simple drawings by these children from different parts of the world reminded me of how young and naive I was only 10 years earlier. Though the artwork all depicted the theme of the environment, it was interesting to see the nuanced depictions by children as a result of cultural differences.

Though this diplomacy may be insignificant in the greater scale of the things, if in some way my actions have in some visceral form lessened cultural prejudices and helped the implant the seeds of global citizenship in the children these pieces of artwork reach, then it will have indeed been a fulfilling experience.

So its that time of the year when things are winding and one can finally find solace within the peace and quiet of the summer time. Given the one month before I start work I have put together the following books for my summer reading list:

1. The Road to Serfdom by F.A. Hayek
2. The General Theory… by Keynes
3. The Black Swan by Taleb
4. Wealth of Nations by Adam Smith
5. 4 Steps to Epiphany by Steve Blank

Looking forward to adding more books to this list in the coming days.