[Update: I am switching to HomeBrew, so this post is for MacPorts users.  I will talk about why in a separate post.]

Despite all the tutorials on this subject, here’s one more.  I couldn’t find one that worked soup to nuts for me.

First, make sure you have macports. Also, make sure your path includes the /opt/local/bin directory where the symlinks to the scala binaries will be, if you’re using the default macports setup.

Do the following from the terminal:

> sudo port install scala

This will probably drop scala28 (or whatever version is latest) into your /opt/local/var/macports/software.  But note!  You need to run:

> sudo scala_select scala28

To get the symlinks set up correctly.

Ok, by now you should be good with the scala installation.

Finally, do the following (substitute your own working directory):

> mkdir -p Documents/code/scala/lift
> cd Documents/code/scala/lift

Expand the Lift tar or zip download here, you’ll get a couple of directories.  Then:

> cd lift_basic
> ./sbt update
> ./sbt ~jetty-run

Open a browser to localhost:8080, and you should see a web application running out of your directory!

Fred Wilson has written, emphasis mine:

About a year ago, we put a modest but non-trivial amount of cash into a Covestor account. We only invest with model managers in risk tiers 1 and 2 to keep our capital at lower risk. There were about five or six model managers in those tiers at that time so I put the minimum on all of them. I would check each month and slowly I left most of the managers.

This is a great example of survivorship bias. So five or six managers were sub-par, and one appears to be worth following. This sounds about right: 70-85% of any set of active managers, professionals at that, under-perform a passive market investment. The ones left standing, however, look like geniuses.

The real question is: how much out-performance of his favorite investor Robert has Fred Wilson captured? Sure, Robert may be an undiscovered Warren Buffet, but only 20% of Fred’s money was invested with Robert to begin with. And, how likely is it that Fred might continue to beat the market, now that all his eggs are in one basket (Robert’s)?

Why is Covestor Bad For You?  If you buy into its premise, you are:

1) Asserting that an amateur person can have better knowledge – consistently – than the combined knowledge of everyone in the market – a market where all participants have a vested interest in being right.

2) Asserting you are competent enough to figure out who this amateur person is.

3) Asserting that your investment objectives align perfectly with the person whose investments you are following.

4) Asserting that this person’s investment styles will continue to align with yours.

5) Asserting the tax implications and transaction costs of this person are correct for you.

Finally, notwithstanding all these caveats, and assuming an investor’s strategy is better-than-the-market, people will very quickly flock to this strategy and eliminate, going forward, any advantage it once had.

There is a whole lot of academic evidence for this. The net result is that the vast majority of participants in Covestor would be mistaken to use it.

Not to pick on Robert specifically, but let’s check out his full performance history against the S&P, from inception through February 2011, including the out-of-sample months since Fred’s post.

Inception June 12, 2007
S&P 500
Month to date (%) 0.75 -1.40
3 month (%) 4.42 12.05
1 year (%) 11.26 19.76
Annualized since inception (%) -2.41 0.67
Since inception (%) -8.76 n/a
Sharpe (annualized) -0.09 0.02
% of positive months 60.00 63.49

With apologies to Fred’s VC portfolio, a far better site for the average saver-investor would seem to be Betterment.com.

I wonder if Fred still has money invested with Robert?

Every once in awhile, I’ll stumble on a product that finally fills some long-standing desire, with a unique combination of features and ease-of-use that previous products never seemed to get right.

I’d wanted a Media PC in my living room A/V setup for awhile.  I have a fairly intense setup: a pair of Cabasse Kara speakers, a Bel Canto PrePro and Evo2 Amp, a Marantz BluRay player, a Squeezebox (feeding music from an always-on Synology NAS), and a cute little Logitech 1100 to make it all go-go-go (and most importantly to prevent my setup from reducing my fiancee to tears every time she wants to do something simple).

I didn’t want any of the bulky and/or noisy fat boxes, pre-made or self-built, that ran Windows Media Center or an open source Linux media distribution like MythTV.  And I didn’t want to upload content that had to sit locally on the machine – I wanted to stream it remotely.  I was also not convinced HDMI / HD connectivity on computing devices was up to par.

All those concerns are gone.  The WD box (extended with a Rosewill Wireless USB Dongle) is phenomenal.  I can stream instant Netflix, or access any media on my 1Tb mirrored-raid Synology NAS, and just play it through my living room setup seamlessly.  Since I don’t rip or download movies, I don’t require insane bandwidth, so I’m satisfied with my wireless.

Kudos to you WD.  You have made a loyal customer out of me.

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