Operations Research Management Science - ORacle

<BODY bgcolor="#ffffff" link="cc0000" vlink="cc0000" text="#000000"> <img src="../cleardot.gif" width=1 height=1 vspace=4 border=0><br>   <table border=0 cellspacing=0 cellpadding=0 width=480><tr valign=top> <td width=10><img src="../cleardot.gif" width=1 height=1 hspace=4 border=0></td> <td width=470> <FONT face="verdana, arial, helvetica" SIZE=2><B><I><A HREF="../../ORMS.shtml" TARGET="_top">OR/MS Today</A> - June 2002</I></B></font><BR> <hr size="1"> <img src="cleardot.gif" width=1 height=1 vspace=4 border=0><br> <font face="times new roman, times"> <img src="../cleardot.gif" width=1 height=1 vspace=4 border=0><br> <FONT face="verdana, arial, helvetica" SIZE=2><B>ORacle</B></FONT><br> <IMG SRC="../barbluehook.gif" WIDTH="468" HEIGHT="4"><br> <img src="../cleardot.gif" width=1 height=1 vspace=8 border=0><br> <FONT SIZE="+2"><B>The Subway Parable</B></FONT><BR> <img src="../cleardot.gif" width=1 height=1 vspace=6 border=0><br> <FONT face="verdana, arial, helvetica" SIZE=2><B>by Douglas A. Samuelson</B></FONT><br> <hr size="1"> <img src="../cleardot.gif" width=1 height=1 vspace=12 border=0><br>    "There you are," the travel agent smiled as she wrapped up the OR/MS analyst's tickets, guidebooks and itinerary. You and your wife should really enjoy this vacation. Let me know how it turns out. Bon Voyage!"<BR> <img src="../cleardot.gif" width=1 height=1 vspace=6 border=0><br> "I'm looking forward to it," the analyst said. "This is the first good one we've been on since that trip to Canada you booked for us, three years ago. You know, the one where I got us hopelessly lost on the Montreal subway."<BR> <img src="../cleardot.gif" width=1 height=1 vspace=6 border=0><br> "I remember," the travel agent giggled. "I wasn't going to bring up the subway story."<BR> <img src="../cleardot.gif" width=1 height=1 vspace=6 border=0><br> "It was embarrassing," the analyst admitted, "but I've heard worse stories. A few weeks ago I was on a train with another guy who told me he'd fallen asleep on a train ride from New York to Washington and woke up in North Carolina. He got to Washington two days late and had to pay about $300 extra for the tickets. Talk about a foul up! At least when we went from our hotel to the stadium by way of some suburb way out to the northeast, we lost only about an hour and a few bucks. And of course we had a bunch of Frenchies laughing at us, but they do that to Americans anyway."<BR> <img src="../cleardot.gif" width=1 height=1 vspace=6 border=0><br> "That just shows they think we're successful," the travel agent groaned, rolling her eyes. "And they treat each other badly, too  don't take it personally." "No problem," the analyst laughed. "From a safe distance, it really was pretty funny. I thought I was being so clever, and then  oops! And for all that, it was better than no vacation. These past few years have been pretty rough."<BR> <img src="../cleardot.gif" width=1 height=1 vspace=6 border=0><br> "Did you get caught in the dot-com bust?" the travel agent asked sympathetically. "Well, fortunately, not my job," the analyst explained. "I know plenty of people who are worse off. First the dot-com boom had many employers looking for techie designers, not analysts. Then came this drop in the economy, and all the rethinking and re-jiggering that's happening since 9/11 has left a lot of us in suspense, or worse. The federal analytical sector, where I work, has been hit harder than most. Every agency seems to be waiting for directions and fighting over who gets to do what, and meanwhile not much new non-Defense work is getting started. I'm really glad we had a couple of long-term tasks in place when all this stuff hit."<BR> <img src="../cleardot.gif" width=1 height=1 vspace=6 border=0><br> "I'd say," the travel agent agreed. "You're lucky you still have a good job."<BR> <img src="../cleardot.gif" width=1 height=1 vspace=6 border=0><br> "But my investments are another story," the analyst added. "I was part of this investment club that got written up in the paper a few years ago because it was such a big success. Remember that? It was made up mostly of analysts like me, so we knew the high-tech sector pretty well. We could read business plans and financial statements better than most bankers. We were just flawless in picking stocks through most of the 1990s, and we made a lot of money  on paper. But we shifted more and more of it into high-tech stocks. Then, when the California power crisis hit, we picked up some energy supplier stocks, since those companies seemed positioned to profit from the regulatory mistakes. Between the high-tech bust and the energy fiasco, we're not looking good at all any more."<BR> <img src="../cleardot.gif" width=1 height=1 vspace=6 border=0><br> The travel agent nodded empathetically.<BR> <img src="../cleardot.gif" width=1 height=1 vspace=6 border=0><br> "Again," the analyst went on, "I know people who have done worse. One friend of mine had stock in a start-up that got bought by another company, trading their stock for the start-up's stock. The new stock was worth about $9 a share when he got it, and then it took off like a rocket. Most of the other people from the start-up sold it in the $20 range, but he thought it was worth more and held out for $30. It actually did hit $30  the week he was out of town. It turned out a lot of other people were looking for $30, too. They all sold, and it dropped like a rock. Then it dropped some more, as other people decided to cut their losses, or take their reduced gains, and bail out. He rode it all the way back down to $4, waiting for the turnaround. He's still waiting."<BR> <img src="../cleardot.gif" width=1 height=1 vspace=6 border=0><br> "That's awful," the travel agent grimaced. "Poor guy."<BR> <img src="../cleardot.gif" width=1 height=1 vspace=6 border=0><br> "Yeah," the analyst agreed. "The investment club at least did some selling on the way down and kept part of the gains. But these decisions have been a lot harder than picking the right companies on the way up."<BR> <img src="../cleardot.gif" width=1 height=1 vspace=6 border=0><br> "It does sound rough," the travel agent concurred. Then she looked pensive for a moment. "You know," she said softly, "you did the same thing both times!" "What do you mean?" the analyst asked, puzzled.<BR> <img src="../cleardot.gif" width=1 height=1 vspace=6 border=0><br> "Your investment club did what you did on the subway!" the travel agent exclaimed. "You thought you had the system figured out. You made some good choices, you checked and re-checked, and sure enough, you were headed in the right direction. You had the transfers and transitions figured out, too. But then maybe you got a little careless, or a little over-confident, or a little too caught up in watching the scenery go by, and you missed the most important decision. It's impressive, all right, when you go somewhere you haven't been before and find your way around, but you haven't really done it right until you also know when and where to get off!"<BR> <img src="../cleardot.gif" width=1 height=1 vspace=4 border=0><br> <IMG SRC="../barbluehook.gif" WIDTH="468" HEIGHT="4"><br> <img src="../cleardot.gif" width=1 height=1 vspace=2 border=0><br> <FONT face="verdana, arial, helvetica" SIZE=2><I>Douglas A. Samuelson is president of InfoLogix, Inc., a consulting company in Annandale, Va. He is also an adjunct professor at The George Washington University and at the University of Pennsylvania, and an external research professor at the Krasnow Institute, George Mason University.</i><BR>  <img src="../cleardot.gif" width=1 height=1 vspace=5 border=0><br>  <img src="../barblue.gif" width=468 height=1 border=0 alt=" "><br> <img src="../cleardot.gif" width=1 height=1 vspace=8 border=0><br> <font face="verdana, arial, helvetica" size="1"> <CENTER><script type="text/javascript"></script> <script type="text/javascript" src="http://pagead2.googlesyndication.com/pagead/show_ads.js"> </script></CENTER><br> <img src="../cleardot.gif" width=1 height=1 vspace=8 border=0><br> <LI> <A HREF="tocfr.html" Target="_top"><I>Table of Contents</I></A><br> <img src="../cleardot.gif" width=1 height=1 vspace=4 border=0><br> <LI> <A HREF="../../ORMS.shtml" TARGET="_top"><I>OR/MS Today</I> Home Page</A><br>  <img src="../cleardot.gif" width=1 height=1 vspace=8 border=0><br> <img src="../barblue.gif" width=468 height=1 border=0 alt=" "><br> <b><i>OR/MS Today</i></b> copyright © 2002 by <A HREF="http://www.informs.org/" target="_new">the Institute for Operations Research and the Management Sciences</a>. All rights reserved.<br> <img src="../cleardot.gif" width=1 height=1 vspace=3 border=0><br> <img src="../bargrey.gif" width=468 height=1 border=0 alt=" "><br> <b>Lionheart Publishing, Inc.</b><br> 506 Roswell Rd., Suite 220, Marietta, GA 30060 USA<br> Phone: 770-431-0867 | Fax: 770-432-6969<br> E-mail: <a href="mailto:lpi@lionhrtpub.com">lpi@lionhrtpub.com</a><br> URL: <A HREF="http://www.lionhrtpub.com" target="_top">http://www.lionhrtpub.com</A><br> <img src="../cleardot.gif" width=1 height=1 vspace=3 border=0><br> <img src="../bargrey.gif" width=468 height=1 border=0 alt=" "><br> Web Site © Copyright 2002 by Lionheart Publishing, Inc. All rights reserved. </td></tr></table> <img src="../cleardot.gif" width=1 height=1 vspace=2 border=0><br> </BODY>