Low Risk Stocks Should Have Higher Risk-adjusted Returns than the Market

  • Leveraged constrained investors with high risk tolerance will invest more heavily in stocks that are riskier than the market
  • Investors with a lower risk tolerance than the market can deleverage very cheaply by holding some combination of cash and TSM
  • There is no reason for an investor seeking less risk than the market to invest in low beta stocks because they could instead just deleverage a portfolio with beta = 1.
  • The only reason for someone to hold low beta stocks is if they offer better risk adjusted returns than the market
  • If high beta stocks get bid up by leveraged constrained investors, then their risk adjusted returns will be worse than the market, consequentially low beta stocks must then have higher risk adjusted returns than the market
  • If low beta stocks do have higher risk adjusted returns, there are limits to arbitrage because leverage is not free
  • Low beta stocks should still underperform high beta stocks in absolute terms

How to make Office Online use OpenDocument format

Did you know that Microsoft Office online can use either Microsoft Office format (docx, pptx, xlsx) or OpenDocument format (odt, odp, ods)? I didn’t until a commenter pointed it out.

You can change the default file formats for Office documents from your OneDrive Settings. There is an option called Office file formats.

Yovko Lambrev

If you visit the OneDrive settings on their website there is an option to change between the two formats.

OneDrive online settings to change office document format to OpenDocument

Then if you create a new “Word document” by right-clicking in OneDrive

OneDrive online right click dialog showing new word document

It’s actually a OpenDocument ODT file!

OneDrive online with two files open (one of them an ODT)

Then you can click on it to open it in Word online.

Microsoft Word online opening an ODT file

Pretty neat!


Switching to

For the past few years I’ve been hosting my blog on Linode, but I’ve decided to switch over to on their “Personal” plan since it was a bit cheaper.

So far everything seems to be working well, and I was able to migrate over all of the posts, pages, and comments from my previous WordPress installation. However, doesn’t support the www subdomain which is annoying, so I either have to make it the naked domain ( or use another subdomain like Right now, I’ve opted for the naked domain, although I think it looks much uglier than the version with www. does not support the www subdomain

Typical web developers, breaking something that’s worked for the last 30 years in favor of the new hotness.

I also had to disable the AMP feature which is enabled by default by going through Settings → General → Performance.


Santa Rock

I made some waffles and a small Santa hat for my pet rock.


Do dying industries make good investments?

I recently watched this video made by Ben Felix.

In the video he argues that based on the historical data it is a bad idea to invest into exciting new technologies, and the companies that create them. Historically investors have overestimated the future growth of new innovative firms and underestimated how long it would take for dying industries to become irrelevant.

From 1900 through 2019, rail companies declined from a 63% share of the US stock market to a less than 1% share. It is the ultimate example of a declining industry. Over that time period, rail stocks beat the US market, road transportation stocks, and air transportation stocks.

Ben Felix, 2020

To illustrate the point, Ben uses the example of the declining rail industry. Despite going from a 63% to 1% share of the stock market capitalization between 1900 and 2019, it still managed to outperform innovative new transportation technologies like cars and airplanes during the same time period.

Investors had overestimated how quickly the railway companies would become obsolete leading them to value those stocks too low. Similarly, they overestimated how well car and airplane companies would do causing those stocks to become overvalued and have lower returns.

The moral of the story is that great companies are not necessarily great investments if you pay too much for them, and when new technologies come out investors get excited and do just that. Additionally, bad companies could be good investments if you can get them cheap enough.

Since the approximate start of the age of information in 1971, the software industry has grown more than any other, from basically non-existent in 1971, to the largest industry by market capitalization at the end of 2019 at nearly 15% of the US stock market. The oil industry on the other hand has seen a massive decline in market capitalization, from nearly 15% of the US market in 1971, to about 3% at the end of 2019. Over this period, a dollar invested in the oil index grew to $134, while a dollar invested in the software index grew to $76.

Ben Felix, 2020

A second example is that you would have made more money holding oil stocks instead of technology stocks over the time period between 1971 and 2019. Most likely investors are overestimating how quickly renewable energy will make oil obsolete leading to oil stocks being undervalued and having higher returns.

So counterintuitively, it seems like you’re better off investing in cheap dying stocks over expensive growth stocks. In other words, values stocks (those with low multiples) outperform growth stocks (those with high multiples). This is a well known phenomenon called the value premium and is the basis for value investing.


Microsoft Office Online switches to OpenDocument as default format

So earlier today I was trying out Microsoft’s online office suite and noticed something interesting. Whenever you create a new Word, Excel, or PowerPoint file from the OneDrive interface, it automatically creates it using the OpenDocument file format (odt, ods, odp) as opposed to the Microsoft Office format (docx, xlsx, ppt). Interestingly if you create it from it uses the Microsoft format instead.


Spotify is trying to embrace, extend, and extinguish open podcasting

I really love podcasts. Not only do they provide great entertainment value as an alternative to audiobooks, but they are also one of the last open ecosystems on the web. Anyone can start a podcast by publishing an RSS feed on their website without having to rely on a central platform (thus nobody can “ban” your podcast). Once published listeners can consume their favorite podcasts from any RSS reader, including many specially made for podcasts like PocketCasts and Overcast.

This arrangement is beneficial to creators because it gives them full freedom of expression without having to worry about the censors on platforms like YouTube, and it gives them complete freedom of choice on how to monetize their work. It is equally beneficial to consumers who get to choose among hundreds of independently developed podcast apps to find the one with the best features for them. If a consumer wants to switch podcast players they can also do so while taking their subscriptions with them.

However, over the last few years Spotify has been making moves that could threaten this open ecosystem.


In 2015, Spotify started embracing podcasts by enabling users to discover and subscribe shows right in the Spotify app. The feature works just like any other podcast client and scrapes RSS feeds found on the web.

Later in 2019, Spotify acquired the podcast networks Gimlet Media, Anchor FM, and Parcast. However, they did not limit access to podcasts produced on those networks so users could still listen using their client of choice.


In May 2020, Spotify announced that it acquired an exclusive license to The Joe Rogan Experience (a popular comedy podcast) for $100 million dollars. Starting in September 2020, Joe’s podcast will be removed from all 3rd party podcasting apps and made available only in Spotify’s own podcasts section.

If the Joe Rogan license is a commercial success then it seems likely that the shows from the other podcast networks that Spotify owns will also be made exclusive to their own apps.


If Spotify chooses to continue on their current path of exclusive content it will break interoperability with other podcast apps and force listeners of those shows to use the Spotify podcast client. I suspect that many listeners will also transfer their existing subscriptions into Spotify to avoid needing two separate podcast clients.

If Spotify gains enough market share then it will effectively become the de facto gatekeeper of podcasts (similar to how Google Play is the de facto gatekeeper of Android apps despite side loading and alternative app stores). Once that happens many of the benefits of podcasts will be destroyed. Creators will no longer have full creative freedom as they risk annoying the Spotify censors and having a large portion of their audience taken away from them. Consumers will no longer have choice in podcast clients if they want to listen to shows that are exclusive to Spotify.

I really hope that Spotify’s attempt to centralize the podcasting ecosystem around their apps is a colossal failure, however, the Embrace, Extend, and Extinguish strategy is quite effective and thus I fear they may succeed.

As a small and feeble attempt to protest this direction that Spotify is moving I have decided to cancel my Spotify Premium subscription.


Switching to exFAT

I’ve decided that I’m going to be reformatting my 25 TB of external storage capacity (for storing datasets, backups, etc.) to exFAT. Most of it is currently ext4 or NTFS.

exFAT is great because similar to its predecessor FAT it has read-write compatibility with Linux, Windows, and macOS. But while FAT can only have files as big as 4 GB and partitions of 16 TB, exFAT can do 16 EB for files and 64 ZB for partitions. Lots more room to grow.

It’ll be a slow process since I can only format one drive at a time and need to copy the data to another drive and back again. So far I’ve converted 4 TB of data.


Jitsi open source video chat

So my university has shutdown the campus for the remainder of the semester due to Coronavirus concerns and asked all students to attend classes remotely (mainly using Zoom for live-streaming lectures). I went looking for an open source cross platform video conferencing solution with a fast onboarding process to keep in touch with fellow students and found Jitsi to fit the bill.

It’s free, it’s FOSS, and there are no accounts required to create a chat session on their website. You just need to enter a name for your room, and they give you a link to share for people to join.

The only officially supported web browser is Google Chrome which kinda sucks. But it seems to work okay in Firefox except I couldn’t get it to detect any of my microphones (your usage may vary). Instead, I’m using it in Falkon and it works flawlessly.

Unfortunately, it also doesn’t appear that video chats are end-to-end encrypted which means whoever runs the server can see the raw footage (but you can self-host).

Overall it’s good enough and it looks like the public service is hosted by 8×8, which is a public VoIP company, so I’m not overly concerned about eavesdropping (due to the lack of end-to-end encryption). I’ll keep an eye out for better options but for now I’m sticking with Jitsi.


Plasma Mobile on the PinePhone

Today, I tried out KDE Neon on my PinePhone “Brave Heart” and recorded the following video.

Here is a summary of some of the default apps:

  • Buho – the default note taking app. Notes can be tagged by color, keyword, and organized into “books”. It can also save URLs.
  • Discover – the same KDE software center available on the desktop.
  • Index – the file manager which draws inspiration from Dolphin.
  • KDE Connect – sync your Plasma Mobile phone with your Plasma Desktop.
  • Koko – the photo gallery and viewer. Has some issues with thumbnails.
  • Konsole – the same KDE terminal emulator available on the desktop.
  • Okular – the PDF reader for Plasma Mobile. It’s a different application from Okular for Plasma Desktop.
  • Phone Book – stores your contacts phone numbers, emails, etc.
  • Settings – settings app for Plasma Mobile which is currently missing some categories (ex: battery).
  • Wave – the default music player which don’t have any sound right now.
  • Phone – the dialer app for calling numbers and contacts.
  • Angelfish – the default web browser which has support for tabs, history, bookmarks, etc.
  • Calindori – the default calendar app but I couldn’t figure out how to add events.