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Calendar Consciousness


Ross M. Miller
Miller Risk Advisors
September 26, 2005

Time, to me, is the most fascinating thing going. My earliest interest in things both financial and economic stemmed from a desire to understand get my head around the old saying that "time is money." Although I learned some control theory and lots of other borderline useful math along the way, I was ultimately disappointed with how economics dealt with the element of time. After a length intellectual detour into a study of how economics incorporated information into its warped conceptual framework (my conclusion was that it did so not very well at all), I got back into the time business through financial economics, a field in which time is a defining element. (If time's not involved, it's not finance.)

What gets me to the topic of calendar consciousness is an idea that struck me during the most recent dog days. As August wore on, I notice that several people, some of whom read this commentary from time to time, owed me a phone call, e-mail, or whatever. I figured that it was summer, they had essentially vanished, and once Labor Day rolled around I would hear from everyone simultaneously and so I had better prepare the deluge, not that I actually did. Sure enough, the day after Labor Day I was a popular guy once again.

I first became enlightened to the true nature of the calendar soon after joining General Electric's R&D Center. My pre-GE life was, as far back as my memory goes, spent entirely in the clutches of the academic world. I first became aware of what passes for life on Earth in nursery school, did the K-12 routine (albeit at an accelerated pace), undergrad and grad school, and then played professor for about ten years. (I am currently engaged in an encore performance.) The only calendar I knew until GE was the academic calendar—life starts in September and ends in May or June. Summer was first for recreation, then for work, and finally for grinding out publications.

In the beginning, life at GE seemed like temporal limbo. For one thing, at least where I fit into the company, there was no such thing as a real vacation. I was fortunately far enough off Fairfield's radar that for a time I had most weekends off, which is more than I could say for professorial life. I also had loads of theoretical vacation days by American standards since my prior incarnation counted as service time toward vacation days. Actually taking these days, however, was another thing. Some bean counter, somewhere, started to notice that anyone with any responsibility was "banking" vacation days from one year to another and invented paperwork that required managerial approval to keep days in the bank from expiring. My stated "reason" for banking vacation was that I saving up enough days to take a sabbatical. One of my several insane bosses loudly ridiculed this, but signed off anyway. There is a happy ending to this story—when I left GE I got the cash equivalent of my vacation days prorated at my terminal salary, meaning that the banked days actually had interest paid on them since they dated mostly from times when my salary was lower.

Although the concept may have vanished by now, GE did have a residual notion of giving its research personnel some limited opportunity to pursue their own research agendas. This was unintentionally facilitated by an edict from Jack Welch that the bulk of R&D be directly funded out of the budgets of GE's dozen-or-so businesses. What then happened was that every business cut out most of its research from its year-end budget in an effort to "make its numbers." When January 1 rolled around, there were no "shop orders" to charge one's time to, so one could do whatever one wanted until February or March when the businesses were cowed into reinstated the money earmarked for "external" R&D. At the other end of the year, many budgets ran out in early December, so everything went back on the company's tab. (This is why taking a year-end vacation was bad idea. For diehard researchers, getting the company to pay you to do your own research was better than vacation and there was no practical way to take vacation any other time of year.)

My new mental calendar then had me move research time from summer, where it was in the academic world, to winter. This scheme worked great until the year that a GE executive with Jack's ear and infinite resources at his disposal tracked me down at the annual ASSA meetings (in Boston that year) on January 2 and "ordered" me to get on a plane to Seattle ultrapronto. Fortunately, on my way to the airport I had just enough time to keep a lunch meeting downtown with the person who would hire me away from GE the following year.

When I later moved into the worlds of consulting and publishing, I developed a new calendar, which is the one that I use today. According to that calendar, you can only get things done that involve other people between Labor Day and the second week of December and again between some secret day in early March and an equally secret day at the end of June. The rest of the time you can forget about getting anything done—someone who needs to be in the loop to make a decision is sure to be missing. A book proposal that I made the mistake of submitting in January (at ASSA meetings several years later) ended up being "discovered" by the editor I sent it to when he was cleaning up his desk right before that secret day in June. (The book was published by that editor's outfit, is currently being translated into Japanese by a nice fellow who is reading the book more carefully than anyone here in the States has, and last I heard my old editor was training to become a bureaucrat in some socialist republic and said he would stay in touch with me, but, of course, never has.)

All of my scribblings, both here in Miller Risk Advisorsland and over at Financial Engineering News, take the calendar into account. My September/October piece on mutual funds was ready for the July/August issue, but I figured that your typical financial engineer would have better things to do in summer than read about financial engineering. So my July/August column ended up being essentially a review of a science-fiction movie. My summer commentaries for my interactive audience have gone artsy as well.

Now that fall is here, it is time for me to turn serious again and, fortunately for my readers, I have strong feelings that anything to do with my internal organs is strictly off-limits. (This is not the case with Bill Gross, who details his pre-colonoscopy cleansing in his most recent Investment Outlook.)  My next Financial Engineering News piece (due out in early November) will look at how Alan Greenspan and the Fed fit into an increasingly quantitative world. My January piece takes the riff on time in this commentary and generalizes it beyond recognition.

One of the many people who got on my case après Labor Day was a most helpful editorial assistant at journal that I wish to maintain good relations with and that was nice enough to invite me to write a paper for a special issue of theirs some months ago. My current, fittingly pedantic, title for the paper is "Toward a General Theory of Market Autonomy," but I will spew forth my half-digested thoughts next time as "Market Mulligans."

Copyright 2005 by Miller Risk Advisors. Permission granted to forward by electronic means and to excerpt or broadcast 250 words or less provided a citation is made to