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Archive for September, 2010

Are computers causing us to produce stupid physicists?

September 27, 2010 Leave a comment

An interesting post over at the Wolfram blog asks whether the use of computer software such as Mathematica contributes to the (perceived) decline in standards in the mathematical abilities of students. It’s an interesting question, and one that has been asked for almost as long as programs such as Mathematica have been used in educating new students.

On the face of it, there’s much to recommend the question. After all, we all know older mathematicians or physicists who can apparently solve hideously complicated problems in their heads. Since this is a skill that younger mathematicians/physicists appear to lack, is it not reasonable to suspect that computers play some part in this?

Well, no. The post I linked to reflects my views on the subject quite closely and is well worth a read if this sort of thing is of interest to you.

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Cute stuff

September 27, 2010 Leave a comment

Although most of the programming I do is geared towards the purely numerical end of the spectrum, there are times when I find myself faced with a task that would appear to benefit from having a handy GUI. Often, MATLAB provides me with sufficient tools for this since it comes with a built-in GUI builder that you can use to construct graphical interfaces to your code. However, this suffers from two drawbacks:

1) If MATLAB isn’t great at tackling the underlying problem you want to slap a GUI on, the MATLAB GUI builder probably won’t be a great fit for your needs. For instance, if you’d like to build, say, a graphical application that presents the results of monitoring some simulation that you’re running remotely, MATLAB won’t be a good choice since its networking features are, frankly, terrible.

2) MATLAB’s GUI builder uses Java. Enough said.

Having found myself faced with this kind of problem more times than I care to remember, at one point I decided to do something about it .There are several excellent GUI libraries out there that allow you to build stable and functional graphical interfaces to your code but for me there is one in particular that stands out: Qt. Not only is it a breeze to learn if you’re already familiar with C++, it’s also cross-platform, meaning that running your application on different operating systems is (usually, at least) a case of a simple rebuild. It also allows me to hook into existing C++ code very easily, which is great considering how much of the stuff I’ve got lying around.

If you’re interested in learning a GUI framework for similar reasons to the ones I’ve outlined above, Qt may be a good fit for you. The Qt documentation is great and there are plenty of tutorials online. There’s also a rather good book available on the subject, with a more advanced one due out soon. You can even read up on how to build your Qt applications with Python if that’s more your sort of thing. Indeed, the first of these books has been so useful to me when learning Qt that I’m going to shamelessly steal from it during the next post, where we’ll show just how easy it is to get a Qt application up and running. We’ll also cover one or two of the subtleties you need to take into account if you’re using a new version of Qt since the book deals only with an earlier version of Qt 4.

Categories: C++, MATLAB, Programming, Qt

Short straws

September 11, 2010 Leave a comment

Phew! Just my luck: I finally decide to commit to starting a blog when all hell breaks loose with work and I have to pull eighteen-hour days just to keep on top of things. What’s even more annoying is that I actually have a ton of posts in preparation but I’ve discovered that – just like when I’m trying to write a paper – I’m never happy with the results and keep trying to hone and tweak them to an inevitably unattainable level of perfection.

The moral of all this is of course that chasing perfection is a great idea when you’re trying to get a paper published, but it’s an absolutely terrible idea when you’re trying to get a blog off the ground. I shall have to pay attention to this in future.

Anyway, while we’re waiting for the good stuff to come along, I thought it might be worthwhile mentioning a conversation I had at lunch yesterday. I got into a discussion with a colleague about finance, a discussion which took rather a surprising turn. He’s someone whose knowledge on all things physics related genuinely impresses me but he hit me with somewhat of a bombshell half way through our conversation. We were talking about how large – sometimes stupidly large – amounts of money are made each day on stock exchanges by trading in shares. He understood how someone could make money by buying a stock and holding it in the expectation that its price could rise in value. But – and this is a big but – he had no idea how short selling works.

I’ve talked to some other people since then and almost all of them seem to have the same difficulty. I admit, short-selling stocks is a weird idea when you first encounter it, but it really couldn’t be simpler. Here’s how I explained it.

Suppose your next-door neighbour loves video games. In particular, he’s very fond of his Playstation 3 and tries to keep up with all of the latest game releases. Several months ago, he went to Amazon and pre-ordered a copy of an eagerly awaited game so that he’d be sure of having it delivered on its day of release. He waits and waits until, eventually, the release date arrives, his credit card is charged £40, and the postman pops a copy of it through his letterbox. However, being a busy man, he’s due to go on a business trip later that day and he won’t be able to play the game until he gets back in, say, a month’s time.

You’ve been watching his growing excitement about the release of the game with interest. You think to yourself, “Hey, if he’s this excited about the game surely others are too. And if others are excited about it, perhaps there’s a chance to make a few bob here.” (You say this to yourself in your best Del Boy voice.) Knowing that he’s going away for a while – and knowing that the game is in such high demand that there are actually shortages in stores – you ask him if he would mind you borrowing it while he’s gone, promising to give it back to him the moment he arrives back from his trip. In return for allowing you to borrow the game, you might decide to thank him by promising to keep an eye on his house while he’s gone.

Notice that you promised only to give it back to him when he comes home again; in particular, you didn’t actually tell him what you were going to do with the game! Instead of sitting down to play it, you decide to put it to work for you. You go to ebay, say, and place the copy of the game for sale there. You find to your delight that such is the enormous demand for the game, people are willing to pay a huge premium in order to get their hands on it. The ebay auction actually ends with one poor sucker bidder buying the game from you for £80 – double what your friend paid! You smile as your PayPal account grows by £80 and pop the game in the post to the buyer.

A month passes and your neighbour is due back in a few hours. Remembering that you promised to give him back a copy of the game, you stroll down to your local video games store and find – surprise! – that plenty of copies are now available. Even better, they’re available for only £30 now that the initial excitement has worn off. You pick up a copy and on the way home you buy a couple of six packs of beer, one of which is to thank your friend for letting you have the game.

That evening, you smile to yourself as you enjoy your beer.

Contrived though this example is, it captures essentially everything you need to know about short selling stocks. Broadly speaking, a trader will short sell a stock if he or she believes that the stock is over valued or that the stock price will drop over a certain time frame. Although different regulatory requirements mean that the details can sometimes change, the basic procedure is always the same: the trader seeks out someone who already has the stock and asks to borrow it from them for a fixed period of time in return for a small fee. He then sells the stock on the open market and puts the cash in his account. When the time comes for him to return the stock to the person who lent it to him, the trader buys the stock from the market, hoping that its price has gone down in the meantime. If it has, he makes a profit; if it hasn’t, he has to bear the loss involved with buying the stock and giving it back to its original owner.

There are, of course, plenty of reasons why shorting stocks in practice isn’t as simple as this (regulatory requirements, temporary freezes on shorts, managing the dividend payments on stocks you’ve shorted, stock splits that happen during a short, and so forth). Shorting also has rather a bad image among the public. But it’s really quite a straightforward – and ultimately beneficial – practice.

And it’s all done so that you can enjoy that beer when your short comes home!

Categories: Finance