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Winter Photography

Solitude - Lake Louise - Banff National Park

This past Monday I went to the Rocky Mountains to take photographs at Lake Louise and some other areas within Banff. In the past, I have engaged in photography during warm weather only.

I learned that winter photography is less forgiving than during the summer. One obvious challenge is the colder temperatures. I took my gloves off and used my exposed fingers to work the camera. After a few minutes, my fingers were surprisingly cold. Another challenge is that the sun hovers low over the horizon during the winter. So, catching the ideal time to photograph an area becomes more difficult, especially in the mountains where the sun has to rise over them.

To create great photographs, a photographer needs to be very picky about the specific time of day within a particular season and weather conditions. In the summer, I typically visit a few locations and get okay photographs. In the winter, that becomes more difficult. Although I went to great locations, the lighting conditions simply did not work. I recall one instance in the early afternoon where the sun was low on the horizon and almost shining directly into the lens. And, in another, the long shadows over the valley detracted from the overall view. So if I go back during the winter or early spring, I will need to visit these locations at better times.

Every photography trip adds to my experience and knowledge. I always come away with some added insight about how I want to approach my next trip. I find photography is much like writing—it takes an inordinate amount of practice to become good.


Have Oil Prices Bottomed?

Have oil prices hit bottom? While I don't know the answer, I have a hunch that we might have bottomed or might be close to bottoming. In a Financial Times article Opec chief says oil prices could soon rebound (subscription might be required) on January 26, 2015, Abdalla El-Badri indicated that prices might have bottomed.

Oil prices may have hit a floor and could soon rebound, said the secretary-general of Opec, the oil producing cartel, on Monday.

After hovering in the $45-$50 a barrel range, Abdalla El-Badri said, maybe prices have reached a bottom.

Speaking on the sidelines of a Chatham House conference in London, Mr El-Badri said to the Financial Times: How long will it last? I don’t know … but I am sure the price will rebound.

In a New York Times article Oil Prices Surge 8% After Long Slide Down (subscription might be required), there were a few factors contributing to a sudden rise in prices this past Friday. The decreased rig count, however, seems to suggest that oil production will decrease and that a bottom should not be too far away.

The rally came shortly after the Baker Hughes service company reported that the nation’s rig count had dropped by 94, or 7 percent, in the last week, the largest single-week drop since the late 1980s. That leaves 1,223 rigs in operation, the lowest number in three years, and energy executives say another 300 rigs could be decommissioned in the next few months as service contracts expire.

A drop in oil production normally happens several months after rigs are decommissioned, but the Baker Hughes report was another sign that oil companies were responding fast to the global oil glut by cutting their spending.

My gut says the oil price has been artificially low, and I think this is a logical correction from that overreaction, said Joel Moser, the chief executive at Aquamarine Investment Partners. It would not surprise me at all that this may reflect a bottom.

While I am not positive that oil prices have bottomed, I think we are at least close. Perhaps oil prices touch the high $30s. But I doubt that oil prices could stay in the $30s for an extended period of more than two months. I believe the pain being endured by the oil industry is intense, as evidenced by the dropping rig count. Thus, I expect that oil prices have either bottomed or will soon bottom.


2015 Stock Market Outlook

Reports that say that something hasn't happened are always interesting to me, because as we know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns—the ones we don't know we don't know. And if one looks throughout the history of our country and other free countries, it is the latter category that tend to be the difficult ones.

As we prepare to enter 2015, financial pundits aplenty will be giving you their forecasts for the upcoming year. People have a tendency to overestimate their confidence when working with ambiguity or uncertainty.

Rather than anchor myself to any pundit, I want to look at what the market is expressing through options. On Friday, December 27, 2014, the SPX closed at 2088.77. Looking at the SPX December 2015 Options (they expire on January 14, 2016) and using thinkorswim’s platform for options, I note the following:

  • about a 90% probability that SPX closes above 1400;
  • about a 90% probability that SPX closes below 2400.

Alternatively, we can state that there is an 80% (=100 – 10 – 10) probability that SPX is between 1400 and 2400. We note the skew to the downside.

Now, let's look at 80%:

  • about a 80% probability that SPX closes above 1650;
  • about a 80% probability that SPX closes below 2300.

Alternatively, we can state that there is a 60% (=100 – 20 – 20) probability that SPX is between 1650 and 2300. Note again the skew to the downside.

Incidentally, the approximate volatility across different strikes for next December’s SPX options is about 20.4%.

Again, these options expire on a Thursday on January 14, 2016. While this time period is slightly beyond yearend, it's close enough for government work.

Looking at the first series of numbers, we note that low value of 1400 is about 67% of today's value and the high value of 2400 is about 15% greater than today's value. Looking at the next series of numbers, that low value of 1650 is about 79% of today's value and the high value of 2300 is about 10% greater than today's value. The downward skew is clearly evident.

If these numbers seem way out there—way too far to even be considered—one can always sell the puts or calls and pocket the risk-free money. Me, nothing surprises me anymore, so I don’t consider any potential profits to be risk-free. Put differently, there is no risk-free money. While these values might seem far away from today's values, there can always be surprises that warrant lower or higher values.

How many of us predicted some of today's geopolitical concerns or the plummet in oil prices? The unknown unknowns can and will surprise us.

How accurate or reliable are these option generated percentages? These percentages are simply based on an option's pricing model. As prices move throughout the year, the values will change. At present, however, these values represent the market's view. That view will change. If you disagree, you can always take the other side. But I do find looking at an option pricing model's values helpful because it reminds me how much volatility and uncertainty exists. It's too easy to get lulled into thinking into a pessimistic or rosy forecast.

So when you hear or read about some pundit providing a rosy forecast, think back to our exercise. How many pundits are expressing that the market could have a significant retracement? My guess is that most pundits are going to express an opinion of a market rise of somewhere between five and 10%, largely because we've enjoyed two strong years. Yet, from the options model's values we noted the skew to the downside.

The key point from this discussion is to keep an open mind to next year’s potential outcomes.


Where Are Oil Prices Headed?

I have no clue where oil prices are headed. Like everyone else, I have been confounded by recent developments.

Leading up to the November 27 OPEC meeting, I expected that OPEC would not cut its production to support higher prices. I got that part correct. I thought, however, with the recent drop or fall in oil prices that most of the damage had already occurred. I did not anticipate a precipitous further drop in price following the OPEC meeting on Thursday and Friday.

I have been reading everything I can in an attempt to anticipate future developments. After all my reading, I have come to believe that the near future is highly uncertain. Some forecasters seem to suggest that we have likely already overreacted. While others, including Murray Edwards of Canadian Natural Resources who stated in a Financial Post article Canadian Natural Resources chairman sees oil touching US$30 a barrel, believe that oil prices might fall as low as US$30 per barrel.

My only expectation is that the next few months will be unsettling times for the oil industry. Eventually, oil prices will find a new normal and the industry will adapt. I further expect that there will be changes in Alberta and in Calgary, more specifically, with decreased oil revenues in the short term. Looking further afield, watch Venezuela. It was encountering severe stresses prior to the collapse in oil prices. Unfortunately this recent change might hasten further adverse changes.

The year 2015 promises to be one of change for the oil industry.


Photography at Lake Louise

Early October Morning at Lake Louise

On October 27, 2014 I went to photograph Lake Louise in Banff, Alberta. While I have been there countless times, I am always hoping to capture a better image than I have before.

I arrived early in the morning, before sunrise, and the temperature was near 0C or 32F. At about 8:15 a.m., the sun finally began to appear over the mountains. After I captured this photograph, I waited for a while longer hoping to get better or more even light. When I felt that was not likely to happen anytime soon, I headed toward the other end of the lake, closer to the base of the glacier.

When looking back toward Chateau Lake Louise, the Chateau was partially in shadow. Consulting apps on my iPhone, I knew that the sun would not swing around for a couple more hours. So, I headed up to the top of Beehive to capture my next photograph looking down at the Chateau.

Château Lake Louise

I typically carry too much stuff. In this instance, I carried my camera gear, including my tripod and its case. I felt like a pack mule going up the mountain. By the time I finally reached the top, I was exhausted. A key lesson when hiking in the mountains is to keep your stuff to an absolute minimum.

After capturing my shot from the top of Beehive, I returned the same way I came so that I could take my photograph of the Chateau from the end of the lake near the base of the glacier. On my way down, I noticed gathering clouds above. When I initially got myself into position for my final photograph, the Chateau was hidden in shadow. So I waited for a few minutes for the sun to move from behind the clouds and light up the Chateau.

Château Lake Louise

Behind the Chateau is the Lake Louise Ski Resort. Although it appears to be located directly behind the Chateau, it is actually across a valley through which the Trans-Canada highway is routed. The base for the ski runs is nearly 5 kilometers or 3 miles behind the Chateau.

Looking at these photographs, you'll notice that the color of the lake changes considerably. Although I am sure that there is some scientific explanation as to why the color varies from photograph to photograph, I don't know what it is. I know that lakes in the Rockies usually have a turquoise color because of the dissolved rock silt from glaciers. In the last photograph, however, the color is closer to a traditional blue lake color. I have a hunch that photographing from behind the sun on a cloudy day affected its color.

Here's a link to a photograph shot by my Flickr friend Bernie. You'll note that he is even higher up the mountain than I was, and from his photograph, you can see Lake Louise and Lake Agnes. Notice the difference in color between the two lakes. And, from Bernie's photograph, you can see Chateau Lake Louise, the valley, and the ski trails.

In reviewing these photographs, I know there is room for improvement. When I get home and review my pictures, I compare what I recall seeing in my mind to what I see on the computer screen. It's a tough challenge, because the immense grandeur of Banff is difficult to capture. Yet, it's a valuable exercise because I discover where my photographs fall short. Sometimes it is something as simple as lighting. That can only be fixed by being at a location at a different time, or a different time in a different season. Other times, I see that my lens selection is poor. Perhaps a wider or narrower lens would be more appropriate. Perhaps some photographs would be better captured from a different location or angle. And at other times, Mother Nature wasn't cooperating. In the last photograph, for example, the water was too rough. In that instance, it simply means that I have to try it again on some other day. Even with all the shortcomings, the trip was a valuable exercise because it is only through experience that one learns to become better.


Calgary’s Peace Bridge

Peace Bridge

Along with Canadian cities Vancouver and Toronto, Calgary typically places among the top ten in the Economist's annual ranking of the most livable cities. And earlier this year, The New York Times published an article 52 Places to Go in 2014 which featured the Peace Bridge, as Calgary’s entry, at number 17. Having seen Chris Bolin's striking photograph, I knew I wanted to capture my own image.

Calgary is a clean and modern city, perhaps a bit too modern with all the new construction. When driving downtown, it often seems to resemble an obstacle course. Despite the affluence from the energy sector, people remain friendly and cooperative.

Complementing its growth, Calgary's arts and cultural community continues to become stronger and better each year. As the city matures, it is becoming more balanced.

And, of course, as all Calgarians appreciate, the city is a gateway to the Rockies.

Not surprisingly, with so much to see and do, tourism is a significant contributor to Alberta's economy. Visitors are always welcome.


Do I Need Microsoft Office 365?

On my old and now retired Movable Type blog, I wrote an article dated August 29, 2012, Giving Microsoft Office 365 A Whirl. And earlier this month, Joanna Stern of The Wall Street Journal wrote an article Do You Really Need Microsoft Office Anymore? (subscription required).

In my earlier article, I mentioned that although I didn't know much about Office 365, I was willing to give it a try. One of my concerns was that I did not understand SharePoint. Although I still don't understand it, that hasn't stopped me from using Office 365. One of these days I will learn at least the introductory benefits of using SharePoint.

In Stern's article, she compares some of the pros and cons of Office 365 against some free alternatives. While it's true that most of us don't use many or most of the features of Word and Excel, it's likely that we all have different preferences. That is, the tools and features that you use most are likely different from those that I use.

For example, most people don't use macros. Sometimes when working with Excel, I get neck deep into programming macros. These macros allow me to crunch numbers and produce results much faster than I otherwise could. And, they are especially helpful when the work is repetitive.

Aside from macros, I have specialized software applications that tie into Word and Excel to produce specialized documents and perform risk calculations. These applications are not required by typical users; however, I find this functionality essential.

What I like most about Office 365 is that I am already familiar with Word, Excel, and PowerPoint. And I am learning how to use OneNote effectively. With Office 365, I have all my familiar software loaded on my desktop, laptop, and iPad. Much to my surprise and delight, Office 365 is surprisingly good. When I work on a document using my iPad, it shows up in my recent documents on my desktop computer—even better.

I mentioned that I am learning how to use OneNote more effectively. Prior to OneNote, I used a variety of methods to keep track of spurious bits of information. Now, using OneNote, I am keeping my information more organized and accessible. All my stored information on OneNote is automatically available on all devices. One feature that I appreciate is the ability to email notes into OneNote with me@onenote.com feature. Often when I am browsing the internet with my iPad, I come across information that I want to save for later. I quickly send myself an email and the item is added to the bottom of my Quick Notes. Later, I organize my information.

As an advanced user of Word, Excel and PowerPoint, I doubt that I would ever feel completely comfortable using another suite of products. Over my career I have accumulated too much knowledge to want to start over, learning something new. So coming back to Joanna Stern's question of do I really need Office 365 anymore, my answer is a loud and resounding yes.


A Dull and Boring August for the Market?

A couple of my favorite pastimes are following world events and the financial market. And, often the two are intertwined. Usually when there are significant adverse political developments, the market falls because of greater uncertainties and risks.

Given the backdrop of increasing geopolitical tensions, the approaching end of Fed’s Quantitative Easing in October, and the S&P 500 bumping along at almost 2000, I am surprised that the market has remained as resilient as it has over the past few months. Moreover, this past Sunday, The Wall Street Journal article For S&P 500, Strategists’ Forecasts Fall Short (subscription required) suggests that many strategists believe that the majority of this year’s gains have been realized.

With the market’s resilience so far, I would not be surprised by a pullback. And because we are approaching the end of the earnings season, with many investors and traders away on vacation, I do not expect stocks to go much higher in the absence of positive news. Thus, my investments remain much the same as they were before because I expect a dull and boring August.


Physical Books Versus E-Books

After listening to a recent radio story about people still preferring physical books over e-books, I decided to write why I generally prefer e-books.

Having recently read several long length biographies and Russian novels using Kindle on my iPad, I found several advantages.

Perhaps most important is that while reading I am able to quickly investigate something of interest—historical facts, locations, items, words, or people. If I were reading a physical book, I likely would not stop, put the book down, and then start searching. With an e-book, I can highlight the item of interest to investigate further. Highlighting often provides more information. If that approach doesn't work, then I can search on the internet.

With long and complex Russian novels—such as Fyodor Dostoevsky's Crime and Punishment (Vintage Classics) and Leo Tolstoy's Anna Karenina—I found the Kindle's X-Ray feature invaluable. When I come across a character that I've forgotten, I can use the X-Ray feature to quickly spot where the character was mentioned. If the X-Ray feature is not available for a particular book, simply searching the book is a good substitute.

Moreover, I often like to highlight or annotate specific passages. With e-books, I can easily markup text without physically damaging the book. Later, if desired, I can simply delete my markups. With Kindle, I can easily find all my highlights and annotations.

And last, I like that my e-books are extremely portable and readable across several devices.

Even though I prefer e-books, I sometimes purchase both the e-book and a physical version.

Those are my reasons for generally preferring e-books over physical books. Regardless of whether you prefer to read an e-book or physical book, it's great to read.


Nicholas and Alexandra

After having read and reviewed Robert K. Massie's books Peter the Great: His Life and World (Modern Library) and Catherine the Great: Portrait of a Woman, I recently finished the remaining two books in the series: Nicholas and Alexandra (Modern Library) and The Romanovs: The Final Chapter (Modern Library). In this article, I will briefly review the last two books.

The first book detailed the lives of Nicholas and Alexandra. As I began reading, I had an uncomfortable sense of foreboding. I knew that their lives ended in tragedy with their assassinations in Ekaterinburg in 1918. So, as I read through the book, I knew that all the events led to one unfortunate conclusion.

As I read through all these biographies, I tended to identify with the characters. When I read about Peter the Great, I traveled back in time and was with him during his accomplishments and festivities. Along with him, I suffered his defeats and celebrated his victories. Similarly with Catherine the Great, I suffered along with her during her hardships, especially at the beginning of her career, and then I celebrated her accomplishments during her reign.

Reading about Nicholas and Alexandra, my feelings were much different, because instead of a leader who overcame his challenges, this story was about a leader and his family who eventually succumbed to their challenges. Moreover, in the prior biographies, I romanticized about a period in time where there were few conveniences. During the times of Peter and Catherine, horses were used for travel and letters for communication. In Nicholas's reign, trains, cars, and planes began to complement and replace horses. Electricity was commonly used, with the added benefit of better night lighting. And, the telegraph was used for fast communication. Some of the romanticism of earlier life was replaced by the common familiarity of more modern conveniences.

I was also struck by the recency of the era of Nicholas and Alexandra. Reaching back into history, it's as if my fingertips are almost able to touch some of those who knew or saw Nicholas and Alexandra. For example, George Balanchine, one of the twentieth century's most prolific and famous choreographers and well-known choreographer for the New York City Ballet, performed as a young child before the royal couple. I was already alive when Balanchine died in 1983, which is not that long ago. Most of the prominent characters, however, were adults during Nicholas's reign and died earlier, before I was born.

Nicholas’s life was filled with challenges that he was never able to overcome. His father, Alexander III, died too young at age forty-nine, long before he had an opportunity to teach his young, inexperienced, twenty-six year old son Nicholas II all that he needed to know and understand to govern Russia. Nicholas married Alexandra, a woman that he truly loved from Germany. Together they had four beautiful daughters, Olga, Tatiana, Maria, and Anastasia, followed by one son, Alexei. Unfortunately, Alexandra carried a gene that led to Alexei being cursed with hemophilia, a disease that prevents from the blood from clotting in a regular and timely fashion.

Prior to reading this book, I had no clue about this awful disease. For small children during that period, this disease was especially cruel. While ordinary kids often got bumps and bruises that quickly healed, hemophiliacs suffered a much worse fate when bruised. Their blood didn't clot easily. Instead, the unconstrained bleeding led to internal swelling that affected their joints, often immobilizing limbs. Hemophiliac kids cried out in extreme pain, begging their parents to help them, yet there was nothing that could be done. For young Alexei, he sometimes spent long periods unable to walk.

During Alexei's painful periods, Alexandra took solace from a man named Rasputin. Rasputin was an enigmatic, Janus-faced peasant who showed the Romanovs a religious, caring side of his personality, while he showed others his more eccentric and aggressive personality. When he was with the Romanovs, he was able to provide Alexandra with often prophetic words of wisdom that comforted her as she cared for her son. More important, however, was that he was able to calm everyone, which helped Alexei when the doctors were powerless to help. The significance of remaining calm was that Alexei had a better chance that his blood would clot and stop the internal hemorrhaging. Because Alexei often got better, Alexandra saw Rasputin as a savior, her conduit to God.

Switching away from Nicholas the sovereign to Nicholas the husband and father, I found striking differences between Nicholas and his predecessors Peter and Catherine. Nicholas was very much a family man. During his marriage with his wife, they exchanged over six hundred letters, and their letters remained warm, loving and intimate throughout their marriage. He cared deeply and passionately about his children, perhaps with special attention to Alexei because of his illness and because of his special role as heir. My impressions of Peter and Catherine is that for each of them, their greatest loves were their roles as sovereigns while families and romantic partners came a close second.

Just focusing on Nicholas, I have two trains of thoughts. First, he was a weak leader, most probably because he went from having no particular roles or responsibilities prior to his father’s death to assuming the role as sovereign of Russia in only a heartbeat. Very few could make such a dramatic transition successfully. Moreover, others claim that he was indecisive and unable to stick to his decisions. As a result of being an indecisive and weak leader, events seemed to shape his destiny. And second, as a person, he was charming, extremely considerate, man who cared deeply about his faith, family, and country. I was left with the impression that Nicholas was a likeable person who found all the stars aligned against himself. As a leader and as a person, he simply had too many unfortunate circumstances to overcome.

At the end of the book, I read about the tragic events that took place at Ekaterinburg’s Ipatiev House, which was called The House of Special Purpose. On 17 July 1918, Nicholas carried his son from upstairs to the cellar, where he and his son along with his wife and four daughters and three others—Trupp, valet; Demidova, Alexandra's maid; and Kharitonov, cook—were executed. After the execution, the bodies were hastily buried near one of Ekaterinburg's mine sites.

The first book Nicholas and Alexandra was written at about 1967, when the Soviet Union still ruled Russia. At that time, some information was unavailable. The second book The Romanovs: The Final Chapter was written in 1995, a few years after the break-up of the Soviet Union, when more information was discovered and became available.

The Second book, The Romanovs: The Final Chapter is divided into three main parts. First, I learned greater detail of their execution. The book discussed discovery of the bones of the deceased. Once the bones were discovered, there was considerable confusion among scientists and competing claims between government entities. There were Russian, American, and British scientists who all worked, though not always harmoniously, toward identifying the remains. And, both Moscow and Ekaterinburg claimed rights to the remains. After the book was published, I learned that Moscow eventually won and that the remains were interred at St. Peter and Paul Cathedral in Saint Petersburg on 17 July 1998, eighty years after the executions. And, I believe that all remains, including those of the servants, are together.

The first part also goes into the DNA science and government squabbling in great detail. I just wanted to know the conclusions.

The second part of the book discusses a Polish woman who represented herself as Anastasia, one of Nicholas's daughters. Once again, the book goes into considerable detail about her life and those that interacted with her in trying to assess her claim of being Anastasia. In the end, I learned that she was a peasant woman from Poland. As she had been in sanatoriums, she might have been mentally ill and sincerely believed that she was Anastasia. Again, I had little interest in all the details. All I wanted to know was the conclusion.

And the last part of the book discussed where some of the still living Romanovs are now. Some are living in obscurity while others have achieved prominence in their fields.

Robert K. Massie is a superb historian and author. With all the rich detail packed into each book, I can only begin to fully appreciate all his efforts to research and chronicle the lives of the Romanov dynasty. What an incredible reading journey I have enjoyed.