Standard Time is Different than Daylight Time

The official Twitter Account for the NFL on FOX tweeted out the following today:

Set your alarm clocks - football starts at 9am/EST 6am/PST this week! #DETvsATL https://t.co/bKhHal0sl4
— FOX Sports NFL (@NFLonFOX) October 21, 2014

This game will be played in London, and since the game will be on TV so much earlier than the usual Sunday games, FOX wants to make sure that people know about it so they don't miss it.

The only problem is that, anybody who follows the direction from this tweet literally will turn the game on one hour too late.  The game does not kick off at 9am EST, it kicks off at 9am EDT.  What's the difference?  9am Eastern Standard Time is one hour later than 9am Eastern Daylight Time.

"Daylight" time refers to Daylight Saving Time, the official setting in place across most of North America from the second Sunday in March until the first Sunday in November.  When we observe Daylight Saving Time, we move our clocks forward one hour, which means that the hour that would naturally be 9am becomes 10am. Thus, 9am EST is actually 10am EDT, and anyone tuning in at 9am EST is tuning in at 10am EDT and thus has missed the first hour of the game.

Being a computer guy, there's one more angle:  Eastern Standard Time is defined as UTC-5, which means five hours earlier than GMT (or UTC, the two are synonymous).  Eastern Daylight Time is UTC-4.  For those of us who deal with applications and programs that are time zone aware, this difference matters.

You may think that this is just an academic exercise and that this mistake doesn't matter, but consider this:  there are two states in the United States that do not observe Daylight Saving Time, Arizona and Hawaii. Arizona is in the Mountain Time Zone (UTC-7), which is two hours earlier than Eastern time.  However, during the summer, when most of the country advances the clocks one hour, Arizona remains on Standard time, meaning that it is three earlier in Phoenix than it is in New York during that period.

I live in Utah, which is also on Mountain Time.  Throughout the winter, clocks are the same in Salt Lake City as they are in Phoenix, but when we in Utah spring forward, from MST to MDT, Arizona remains on MST, putting Phoenix on the same time as Los Angeles.  Los Angeles is in the Pacific Time Zone (UTC-8), which becomes PDT during the summer.  PDT is UTC-7, which is identical to MST.  It does matter whether or not you get it right.

My Geographic Extremes - As of October 2014

I love to travel.  Even so, I still haven't managed to get out of North America; the closest I've come is the island of Curaçao, about 25 miles north of the Venezuelan coast.  Interestingly, three of the four compass point extremes are located on islands.

Here are my current geographic extremes:

NORTHERNMOST: 45.44° N

Rideau Circle, Ottawa, Ontario, Canada

45° 26' 40.7616" N
75° 41' 32.5248" W
Monday, October 1, 2012

Plot on map

As it turns out, this was in error. I was in Vancouver two years prior to this, and all of Vancouver is north of the 49th parallel.  I have posted a newer version of this page, dated September 25, 2015.

SOUTHERNMOST: 12.07° N

Caracas Baai, Curaçao

12° 4' 8.439" N
68° 51' 42.1524"

Tuesday, June 13, 2007

Plot on map

EASTERNMOST: 62.68° W

South Friars Beach, St Kitts

17° 16' 23.304" N
62° 40' 24.3042" W
Tuesday, March 5, 2013

Plot on map

WESTERNMOST: 158.10° W

Haleiwa, Oahu, Hawaii

21° 35' 35.448" N
158° 6' 12.5892" W
Monday, February 14, 2011

Plot on map


Conversions from Decimal to Degrees /Minutes/Seconds:
http://transition.fcc.gov/mb/audio/bickel/DDDMMSS-decimal.html

Sloppy, sloppy

When I was young, I had complete respect for journalism. I thought that journalists were very careful to get the facts straight and use correct grammar, and, in those rare occasions when they weren't careful, I believed that there were editors who would step in and fix the problems before the stories went to publication.

I don't know whether I was wrong in the past or if things have changed in more recent times, but I keep seeing stories written with really sloppy writing and bad facts. Rather than shake my head and ignore them, I think I'd rather shake my head and then post them here.

I'll start it off with this one-paragraph blurb from CBS MarketWatch talking about some problems at LAX Airport.  The problem this story is in the time conversion. The text says that the halt in flights began at 2:20 pm "local time," which in Los Angeles would be Pacific time, but the writer then converts that time to 11:20 am Eastern.  Yes there is a three-hour time difference between Los Angeles and Eastern time, but Eastern time is three hours later than Pacific time. At 2:20 pm in Los Angeles, it 5:20 pm on the East Coast; it's 11:20 am in Honolulu (at least during the summer).

Maybe this seems ticky-tacky, but this time conversion is not a complicated fact.  The story is just sloppy.

Airfares Make No Sense

Look at the following screenshot

This is a search for a one-way flight from Salt Lake City to Sacramento on Friday, June 6, 2014.   There are four non-stop flights on the route, although I'm showing only two of them in the screenshot, and all four of them are $500 for the one-way flight.

Now, examine the next screenshot, which depicts a search for a roundtrip flight on the same route:

The flights on the outbound portion of the roundtrip itinerary are precisely the same flights that are shown in the one-way search above, but, by flying rountrip, these flights are $126 cheaper than the one-way.

The lesson here is obvious:  If you need to fly one-way on this date, buy a roundtrip ticket and throw away the return portion of the trip.  You'll get your one-way trip for $374 instead of $500.

One Stock's Unbalanced Sway over the Dow Jones Industrial Average. (Not every stock in the average is average)

On Friday, April 25, 2014, the Dow Jones Industrial Average fell 140 points.  In this era of large market swings, that's no longer considered to be a huge move, but it's enough to draw notice.

The interesting thing about that big decline is that nearly half of the movement on that day can be attributed to a drop in just one of the thirty stocks which comprise the average, VISA (V). In fact, on that day, eight of the stocks in the average, more than one quarter of them, actually increased in price, and the aggregate price changes of the other 29 companies would have caused the Dow to drop by only 73 points. VISA made the difference between just a run-of-the-mill down day and the perception of a bad day.

How can that be? How can one stock have such a huge impact on the average, the benchmark that most news outlets use as their benchmark for the entire market?

The answer lies in the way that the average is calculated. The Dow Jones Industrial Average is a simple average. It is not weighted for prices or market capitalization like the NASDAQ average is. The simple calculation methodology means that equal percentage moves in various stocks have disparate impact on the average, based on the price of the stock, which we'll see in a moment.

First, let's look at how the average is calculated. Back in 1896, when Charles Dow created the average which still bears his name, he simply added up the prices of thirty large industrial stocks of the era and then divided by thirty. It is exactly the way we all learned to calculate averages in elementary school (statisticians call this an "arithmetic mean."), and it had the same flaws when Dow first published it as it does today, that more expensive stocks impact movement in the average more than cheaper securities do, but, again, we'll get to that in a moment.

While Dow started out dividing by thirty, as time passed, that divisor had to change. In order to maintain consistency of the number for comparability over time the divisor had to be adjusted to allow for things like stock splits and changing of component stocks in the average. For example, say that one of the companies in Dow's original list underwent a four-for-one stock split, reducing its share price from $120 to $30. This would cause the sum of the prices of the thirty stocks to be $90 less than it was pre-split. If Dow had continued to divide the sum of the prices of his stocks by 30 was maintained, then his average would have fallen by three points even though no wealth been lost by any investor. In order to make sure that values from Dow's average were comparable from one day to the next, he had adjust the divisor, in this example, from 30 down to 28.8 in order to make sure that his average was consistent.

In a similar manner, changes in the company composition of the average also caused the divisor to change. Replace a low-priced company with a more expensive company, and the divisor must be increased; replace an expensive stock with a cheaper one, and the divisor decreases. Over the past 100 years, the predominant trend of the changes has been to decrease the divisor, mostly due to stock splits, to the point that the divisor eventually (in 1986) fell to near one, and then declined below it. The current divisor, as of April 25, 2014, is 0.155715905, which means that every one dollar change in any of the Dow Stocks cause the average to move by 6.42 points (1 / 0.155715905).

And that's how we get the imbalance. Take a look at the thirty stocks which currently comprise the DJIA, along with their closing prices on April 25 and the day's change for each, represented in terms of dollars and a percentage:

		Close	Change	Pct
AXP	American Express Co	87.03	-0.38	-0.4366%
BA	Boeing Co	128.66	-1.20	-0.9327%
CAT	Caterpillar Inc	104.69	-0.59	-0.5636%
CSCO	Cisco Systems Inc	23.00	-0.33	-1.4348%
CVX	Chevron Corp	123.99	-0.31	-0.2500%
DD	E I du Pont de Nemours and Co	66.66	-0.45	-0.6751%
DIS	Walt Disney Co	78.23	-1.36	-1.7385%
GE	General Electric Co	26.60	0.14	0.5263%
GS	Goldman Sachs Group Inc	158.24	-2.61	-1.6494%
HD	Home Depot Inc	79.38	-0.39	-0.4913%
IBM	International Business Machines Co...	189.63	-0.59	-0.3111%
INTC	Intel Corp	26.26	-0.49	-1.8660%
JNJ	Johnson & Johnson	99.79	-0.17	-0.1704%
JPM	JPMorgan Chase and Co	55.70	-0.49	-0.8797%
KO	The Coca-Cola Co	41.01	0.31	0.7559%
MCD	McDonald's Corp	100.73	0.89	0.8836%
MMM	3M Co	136.56	-0.09	-0.0659%
MRK	Merck & Co Inc	57.24	-0.29	-0.5066%
MSFT	Microsoft Corp	39.91	0.05	0.1253%
NKE	Nike Inc	72.70	-0.69	-0.9491%
PFE	Pfizer Inc	30.75	0.04	0.1301%
PG	Procter & Gamble Co	81.41	0.26	0.3194%
T	AT&T Inc	34.49	-0.01	-0.0290%
TRV	Travelers Companies Inc	88.31	-0.28	-0.3171%
UNH	UnitedHealth Group Inc	75.66	-0.93	-1.2292%
UTX	United Technologies Corp	117.21	-1.77	-1.5101%
V	Visa Inc	198.93	-10.47	-5.2632%
VZ	Verizon Communications Inc	45.94	-0.34	-0.7401%
WMT	Wal-Mart Stores Inc	78.62	0.31	0.3943%
XOM	Exxon Mobil Corp	100.41	0.40	0.3984%
		2547.74	-21.83	-0.8568%

Note that VISA is the most expensive stock in the list, nearly $200 per share (three years ago, I owned VISA, and sold it for $88 per share when I got spooked, but that's another story).  VISA shares declined over $10, which was over 5% of VISA's value.  That $10.47 change, when divided by the current Dow divisor, means that this stock had an impact on the average of -67.24 points.

Now, say for example that Cisco Systems (CSCO) had suffered a decline of the same magnitude as VISA's plummet.  Cisco's stock would have fallen $1.23, from its opening price of 23.33 down to $22.10.  But, the same divisor calculation means that the Dow Jones average would have fallen only 7.89 points.  Cisco's shareholders would have endured a financial loss of 5.26% in the value of value of their position, identical to the pain suffered by VISA's shareholders on Friday, but Cisco's pain would have barely dented the Dow Jones average.