Staircase by Kirsten Shipp

Katy looked at her alarm clock, 2:30 am. She had been trying to fall asleep for four hours now – and had tried just about everything from reading the dictionary, to meditation, to counting sheep. Nothing worked – it rarely did.
 

"Screw this," she mumbled as she rolled out of bed, "I'm going on a drive."
 

Despite living alone, Katy still tiptoed across her room as she went to grab her faded blue sweatshirt and her purse. As she headed for the door, she realized she had no idea where she would go, but something was telling her to just get out and drive. She drove for two hours. At first she drove with the windows down, and the music blaring, the noise helped block out the millions of thoughts going through her head. But then she turned the music off and let her thoughts consume her. Like why she was still with her dead-beat boyfriend and how much she hated her current job. She had worked hard through high school and college and done well, but lately life just wasn't what she thought it would be. She had stopped meeting up with friends in order to hang out more with Bobby – who usually just ended up getting drunk and yelling at her. And when Bobby was out of town, she would at work late to avoid her friend's advice that he was bad news. But she barely had enough work during the day to keep her busy, so often times, she wasn't even working during those late hours. She would wait until everyone else had gone home and then cry. She couldn't cry at her apartment – what if her neighbors heard, or a friend stopped by? It was easier to just cry when she knew no one else would hear or see her. That way she wouldn't have to admit how lost she felt.
 

Suddenly Katy's thoughts were interrupted as she focused on something in the distance.
 

"Is that a….staircase…in the middle of a field?"
 

She slammed on the brakes and got out of the car. This, she had to see. It was still dark out, and the only sound was that of her feet hitting the ground as she made her way to the staircase.
 

"This is unbelievable" she thought. "How come I haven't seen this here before?"
 

Katy stood at the bottom of the staircase for a good five minutes, before carefully placing her right foot on the bottom step.
 

"What the hell? It can't hurt."
 

She took one last look around her, she wouldn't want anyone calling the cops on the crazy girl at the top of the staircase in the middle of the field, and then started to climb. From the ground the staircase hadn't looked more than one story tall, but Katy felt like she was climbing forever. She was practically gasping for air as she reached the top.
 

"Geesh, I need to get back in the gym" she thought as she sat down, her feet dangling over the field below her. She reached into her sweatshirt pocket and pulled out a mangled cigarette and matches. She coughed with her first puff, and immediately put out the cigarette. It was a bad habit that she had picked up from Bobby, and one she hated.
 

"Disgusting" she mumbled as a tear rolled down her cheek, "just disgusting." She sat there in silence for five minutes, looking straight down as her tears dropped to the ground beneath her.
 

Then she did something she rarely did, she squeezed her eyes shut, clasped her hands together and she prayed. It had been so long she wasn't sure quite what to say, but she knew she needed help. She didn't ask for answers or for life to suddenly be perfect, she asked for the strength to move forward. And as she stood up she opened her eyes and looked out upon the fields in front of her. Suddenly the black, barren fields ahead had color and were unlike anything she had ever seen before. She saw several forking roads; some with hills and rocky paths, but at the end of every road was something beautiful. From the top of the stairs to nowhere, she felt like she was standing on the top of the world and from there she could see the world of endless possibilities that lay ahead of her. For the first time in years, she felt empowered, and as she climbed back down the stairs and got back into her car, she didn't look back. She knew that what she had seen at the top of the stairs would be gone, it was in her heart now, and she didn't have time to look back, the world was waiting for her.

Current Events and Importance of Open Mindedness, Civility, and Action

    We are now being ravaged in the news with stories of protestors in the streets carrying weapons and demanding their voices be heard. This is currently regarding health care but it wasn't that long ago it was the war we were protesting and immigration as well. After September 11^th, we banded together as a nation and were stronger than ever in our unity. That has over last 8 years started to fall apart. It is now at a point that we are as divided, if not more so, than we ever have been before. Right wingers have expressed extreme fear in Obama and the course our country is taking; left wingers are worried that the right wingers will not allow the necessary changes to occur. Another divide has now occurred that is slightly different. There are those that feel that are scared by all the fear and anger beginning to rise. They worry that something bad will happen if people become too worked up. They point out some valid reasons why we should not bring weapons into the streets during a protest. On the other side are the protestors, those that are becoming more and more angry and scared every day. They have reached a level that borders on demanding revolution and they don't understand the apathy of the silent. Who is right in this situation? What are their best points? How can we be the best citizens we can be and at the same time the best friends and neighbors?

    Those that are against the fearful bring up some very valid points. First of all, the structure of the government is set up with Checks and Balances. We've all leaned about them since we were in grade school, but this process helps ensure that no part of the government becomes any more powerful than the others. In addition, the will of the people is represented 3 times in our votes for the house, our votes for the congress and our votes for the President. The majority of us have decided that those in the position of power best represent our beliefs and they will do their best to make sure that we get what we want. Secondly, and to further demonstrate the powers of these checks and balances, not much has changed in the United States in decades. We have been through several Presidents, each rocked with their own scandals, wars, and fears and somehow we still seem to be on top of the world, with the majority of us enjoying the rights of life, liberty and happiness. Lastly, a religious argument is brought up, for those who believe, and that is one of confidence. We are told that God has a plan for us and that we should not fear walking through the valley of the shadow of death. We are told to put our faith in God and that in the end everything will be okay.

    The second group brings up some excellent points on why we should fear apathy the most. The checks and balances system is bruised at the moment. The party of the President now controls all of Congress. The only other branch of government isn't elected by the people but nominated by the President and confirmed by the congress. In this situation, if played correctly changes can be made to the country in an amazingly easy fashion. The most horrifying descriptions would be to say that a blitzkrieg of legislations can be brought down on us, whether or not it is the best decision. Secondly, we are not given all the facts. The major media outlets are our only window to the world as a whole and what they say we have to take as Gospel. Unfortunately, they do not give us all the facts and they work in a world that pays them more for exacerbating problems and fear mongering. How are we to have our voices heard, when they are most often the ones representing us to our peers? Lastly, in Pope Benedict's encyclical on Love he points out that if we truly love God, and want to be the best we can for him, then no longer is His will some alien will imposed on us, but it is actually our will. We can not sit by apathetically and hope God will take care of us; we need to first think hard about the choices in front of us, secondly, pray that the choice we make is the one he would also want us to make, and then we need to act. God says to love and forgive, not be apathetic. If the Apostles were apathetic we would not know about Christ.

    So where does this leave us. First of all, it is important that all parties keep an open mind. Listening and gathering more information is NEVER the wrong step. Secondly, if we do decide to act it is important we do so in a Christian manner, without weapons. Imagine the students at Tiananmen Square kneeling in front of tanks. They were not violent and their voices became louder through that sacrifice. Thirdly, we should not believe everything we hear. We need to do our own research, if CBS or Fox News or the Daily Show tell us their opinion about a major piece of legislature we should note it but come up with out own decisions. Hopefully we are not making up our minds before we get all the facts. Lastly is a word of warning. Our government has proven since Nixon that it can lie to us. It can manipulate the world behind our backs and systematically take away our freedoms. Historically in times like these where the powers that be feel that the people have become divided and are beginning to lose power, they will create a false flag terror attack. A false flag terror attack is "covert operation conducted by governments, corporations, or other organizations, which [is] designed to deceive the public in such a way that the operations appear as though they are being carried out by other entities." (Wikipedia, False Flag) These were performed most notably by the German's before WWII to rally the people against Poland and surrounding countries. Personally I fear that the government might perform one these attacks, and blame those that are the least apathetic, like the members of the Campaign for Liberty. We are coming to a crossroads. I do not know where will go as a country, but whatever happens, I hope that we remember the quote by Thomas Jefferson, "When the people fear their government, there is tyranny; when the government fears the people, there is liberty."

Volatility Neutral Portfolio Organization

Modern portfolio theory by Markowitz says basically that for increased levels of risk you should demand higher levels of expected return. We can combine instruments together to help maximize our expected return and minimize our risk. This we all know as diversification. Theoretically, there is a set of portfolios that are all "efficient" because they have maximized their expected return given a certain level of risk.

This is regarded as absolute truth, and provides us the ability to discuss Beta and the Capital Asset Pricing Model which are excellent ways of viewing the market; however, I found that personally when I built a portfolio of stocks I didn't know how to truly measure the risk I was taking, nor could I maximize my return based on that risk. Quite frankly, most investors have NO idea how to use any of that theory. All they really can gather is that they need to diversify.

One of these assumptions we have to make is that picking stocks is not an exact science. Many studies have shown, the average portfolio builder will do just as well throwing darts at a board of ticker symbols than diving in and doing their, "Jim Cramer Homework." So, it doesn't take long before we can make the not so horrible assumption that stock pickers will pick stocks that make money 50% of the time. Our average Joe now has a list of 10 stocks he wants to purchase. He does not know this now but 5 will go up in value, and 5 will go down. He now has the difficult decision to make of how many shares to buy of each of the 10 stocks.

The first and somewhat obvious method is to buy 100 shares of each stock. He will then have 1000 shares of stock and his stocks will be evenly distributed. But the mildly involved already know that if stock number 1 costs $5 per share and stock number 2 costs $100 per share, he has not equally distributed his money. Interestingly, the first method is very similar to how the Dow Jones Industrial Average works. Next we realize that we need to take the total amount we want to invest and divide into 10 equal pieces, then use those pieces to invest in each stock. So if we have $10,000 to invest, we then need to buy 200 shares of stock 1 and 10 shares of stock 2, so we then have $1,000 invested in both. We continue that for each of the 10 stocks. This is how most other market averages like the S&P 500 work.

Before I present my method, I would like to make a quick note for description purposes. We all have had portfolios and have tried to use the second method above to invest. We may then find ourselves in a situation where we check our stock portfolio's total value on a day to day basis. This is not the healthiest method of staying sane but it is human nature. After a few weeks we'll notice that while we have invested equally in all the stocks, a few of the stocks have a tendency to catch our eye the most. They move a great deal and their movement is large enough as to have a large degree of effect on our portfolio. We might wonder whey some of the other stocks, seem to move nowhere at all, and never have an effect on the bottom line. Inevitably we'll focus all of our mental effort on the volatile stocks and forget completely about the low volatility ones because, our brains have already figured out that we are not diversified at all. We have over invested in volatility and under invested in low volatility.

The third method which I propose is to use some measure of volatility to change the amount we invest in each stock, with the underlying goal of creating a volatility neutral portfolio. If we invest more in those stocks that seem to never move, and less in the ones that move a great deal, then there must exist some combination where a "good day" in one stock is equivalent to a "good day" in any other with respect to its effect on our portfolio.

Naysayers may point out that we have made a new assumption. This new assumption is that volatility remains constant. This is not true, but volatility often begets more volatility and vice versa. One can imagine a stock that moves a great deal one day, out of nowhere, due to some amazing piece of news. Investors and traders will then try and buy or sell that stock the next day depending on their own views about the big movement. This buying and selling will create more movement which will of course bring more buying and selling. Vice versa if stock does not move, most investors will assume that it is not going to move the next day and their money will be better spent elsewhere. This is a self-fulfilling prophecy and soon no one will want to do anything with the stock and its volatility will stay low. This being said over time volatility does change for reasons like the one above and when that happens the portfolio should be readjusted to reflect the new volatilities.

One can use just about anything to measure volatility, but for the average investor historical values of daily high, low, and close are pretty easy to come by. If we take the average change from day to day we'll get a rudimentary level of volatility. For example if a stocks closing price goes from $10.10 to $10.25 and then to $10.15, the absolute value of the changes were $0.15 and $0.10, giving us an average daily volatility of $0.125. I like to include the high and low to know something about how much the stock is moving during the day. If high(1), low(1) and high(2), low(2) are the highs and lows for day 1 and 2 respectively I then use the equation d = MAX(ABS(high(2) – high(1), ABS(low(2)-low(1)). If you're handy with excel you can get a spreadsheet from Yahoo finance of historical stock prices and then quickly come up with the value d as it changes each day. We then take an average of d over time, for example 25 days is a month in stock market terms. We can assign this value v1 to stock number 1 and continue this process for each of our 10 stocks.

We now have a set of numbers which represent the volatilities for each of the 10 stocks we are going to buy.

(v1, v2, … v10)

Since we are trying to make weights that value the stock with least volatility highest, and the highest least we need to reorder the volatilities. If we find the maximum of them and divide by each individual volatility we will get a new reordered set with order we are looking for.

(vmax/v1, vmax/v2, … vmax/v10)

Now that we have an index we can then use these values to come up with the percentage of the total portfolio each stock must be to be volatility neutral. The sum of these volatilities can be called the volatility of the portfolio but it really a nonsensical number. That is used in the calculation of the percentage. We take each of the reordered weights and divide by the sum to come up with a percentage to invest in each. Now simply multiply your percentage by the total amount to be invested and this will give you how much money you should invest in each stock. At the end of this you will find a neat relationship between the volatilities and percentages. If one stock is twice as volatile as another stock for example it moves $4.00 per day and the other moves $2.00 per day, you will invest twice as much money in the $2.00 volatility stock as you do the $4.00.

Sometimes our eyes can get a little blurry when looking at equations but essentially this will create a portfolio that, given certain assumptions, will for some period of time into the future create a portfolio of stocks that are volatility neutral. One can imagine our Average Joe investor who has picked 5 stocks that will go up and 5 that will go down. If 1 of the stocks that will go down has been moving a great deal up to this point and he does not invest using this method, there is a likely hood that even though he should break even with 5 up and 5 down, because he invested equally in this stock, he might lose money as the performance of this stock will dominate his portfolio performance. One can even imagine if average Joe picked so well 9 stocks went up and 1 went down and that 1 was so volatile as to destroy almost 10% of his money. If we weight things appropriately and believe that volatilities persist, then in both scenarios he should fair better with a volatility neutral portfolio organization.

A Wish Come True (A metaphor on life)

    "All I can tell you Jeremy is believe in yourself and don't ever give up."

    Jeremy reached up and grabbed the handlebars of a zip line going from the 32^nd street YMCA rooftop out to the middle of the baseball diamond. He could see ahead of him a man with a purple cape and mask carrying a bowling ball shaped bomb starting to run from the first floor entrance into the baseball field. There was a safety net below him and his entire family and friends from school standing in the street smiling and waving him on.

    "Come on buddy, you can do it!"

    "Help, Jeremy, Help!"

    "Only you can save us! You can do it!"

    Jeremy was a 10 year old boy and because of a disease he couldn't pronounce he wouldn't live past 11. You've never met a happier boy though, especially considering what he was going through. He loved school, but was forced to miss several weeks at a time in the hospital. He sang with his Church choir and has a crush on Hannah Montana, but doesn't like to talk about it.

    4 months ago the Fairy-God-Mother Company found out about Jeremy's situation and called his parents. They wanted to give Jeremy the chance to feel what it was like to have his dreams come true. His parents were thrilled that their son had this opportunity and Jeremy's dad sat down to talk with him about his dreams.

    "Would you like to go to Disney World, or meet someone famous? You know we could probably get Hannah Montana?" His Dad said with a big grin, sitting on the edge of Jeremy's bed.

    Jeremy blushed, "Dad! No!"

    "Okay then Son, what do you want?"

    Jeremy thought hard, he looked around his room at the sports wall paper, and his racecar bed. He looked at his stuffed animals and then his eye caught it: a 6-inch action figure of Batman. He was standing with his fists tight and on his hips, chest out and looking across the room proudly. Below Batman was his father's collection of original Batman comic books. He knew his Father loved Batman and whenever he read the comics he always imagined Bruce Wayne was really his Dad, and that late at night when he went to bed his Father would put on a cape and mask to fight his arch-nemesis the Joker.

    "I want to be Batman," he said and pointed at the action figure.

    His father's eyes immediately filled with tears and he felt tightness in his chest. That's exactly what he would've asked for he thought. He wished he could see what kind of man Jeremy would grow up to be but at that moment he knew that Jeremy wanted to be Batman to not only to fulfill a dream but to make his Dad proud.

    Time had passed and the company agreed to help organize a staged capture of an evil villain planning to bomb the local baseball field where Jeremy liked to play. The whole community got involved and Jeremy's entire family flew in to see the event. Jeremy was told to get dressed into a Batman costume that was made just for him. When he was done the doorbell rang and it was two police officers telling Jeremy "Batman" they need his help. After an exciting car chase in the front of a police cruiser with the siren on, he was sent inside the 32^nd street YMCA and told to check the roof. When he got to the roof his dad was standing there with the zip line handle bars and a big smile.

    Jeremy ran up and hugged his Dad. He was so happy he could just about burst. Still holding onto his Dad he looked over the side of the building and saw his whole family who let up a big cheer. Tears started to pour from his Dad's eyes but he was still smiling.

    "You look good son, are you ready to fly?" he choked on the last word to keep from crying more.

    "I love you Dad," was all Jeremy replied.

    His Dad stood up took in a deep breath and puffed out his chest and said, "All I can tell you Jeremy is believe in yourself and don't ever give up."

    Jeremy grabbed the handle bars and stood on the ledge, his Dad buckled him into the safety rope and the gentleman from the Fairy-God-Mother Corp checked the rigging then gave the thumbs up. The villain ran out of the downstairs doorway and into the baseball field.

    Jeremy was a little nervous but held extra tight to the handlebars and jumped.

    He began to fly towards the baseball field; he could feel his cape fly out behind him and the wind blow by his face. The roar of his family was hard to hear over the wind and in his mind there were no handlebars, Jeremy was Batman, flying across Gotham after the bad guys.

    Jeremy was welcomed at the baseball field by his mother and a huge hug. She reached down and handed him his big squirt gun and Jeremy pumped it full of pressure, ran up to the purple masked man and squirted him right in the chest. The purple villain fell in a heap on the pitcher's mound and the two police officers ran in and cuffed him.

    "We'll take it from here Batman."

    "Great work!"

    Just then the whole family including Jeremy's Dad ran up to hug him and lift them on their shoulders. One friend looked up at him and said, "Good job, Batman". He looked down with a big smile and said, "I'm not Batman, I'm Jeremy."