World Bank Tour

Today I took the opportunity to tour the World Bank Treasury office, located near the Dupont Circle in Washington D.C. The tour was made possible by my professor, who currently works in the quantitative field on the World Bank, and also by my boss -- who allowed the liberty to work remotely after attending the tour. It turned out to be a very worthwhile experience..

The first thing I was impressed by the facilities of the World Bank office: it seemed very new, spacious, clean, and colorful. The latter caught me by surprise, since government-like institutions normally lack vibrancy whatsoever. I might even go as well as calling the office "chic".

Based on the quality of the tour, I will make the presumption that my professor is highly regarded at the World Bank. We were given presentations by two of his colleagues: a senior portfolio manager in libor, and another portfolio manager focused on fixed-income (read: I am not 100% sure). Both presentations were very informative -- only marred by their relative terseness given our limited time together. After the presentations, we were given a quick walk through the "trading floor of the World Bank". The previous is in quotations marks because these are not trading floors in the traditional sense of the word. Sure there are Bloomberg terminals and secure phones, but everyone trades at their own desks...which essentially are their respective cubicles. I guess this is the result of modern technologies.

Two things I took away from the tour: (1) a reinforcement that I eventually want to work in finance, and (2) the possibility of working for government-like institutions like the World Bank. I am determined even more now to eventually land a job in the finance sector, ideally in a position as a portfolio manager or investment specialist. Honestly, the main reason is money: salaries are significantly higher in the finance sector than most other fields. (I hope to land a $85k+ job following the completion of my Masters degree). The second is how there are institutions that do not act like institutions. The World bank struck me as very much corporate, but with the job security of any government agency.

Yoga

Through a wellness program funded by my employer, I am eligible to receive free yoga classes twice a week for the next month or so. The location is fairly close to my work location and so my immediate reaction is "why not?" Alas I tried it for the first time last night -- and it turned to be a worthwhile experience...

Why do I want to do yoga? Aside from it being free (biggest incentive by far), I feel it would be useful to balance out all the weight training I subject my body a few times a week. I heard many things about the healthy-ness of yoga, like how it helps to tone your body, make you more flexible, and to relax better. Those first two reasons consists of my second-tier incentives to take up yoga -- because I want to become a superior athlete (and get a six-pack). The biggest disincentive is that I am a guy and normally guys don't do yoga. Overcoming the social conventions wasn't easy but, when push comes to shove, sometimes one has to be different.

As I noted before, it turned out to be a good experience. I participated in the beginners class, in which the instructor was very helpful to carefully model each stance. We mostly did arm and shoulder-related exercises. Some weren't easy (e.g. balancing on one leg while contorting your arms together) but they were straightforward. All the other students were attentive, but older than I am. (This really isn't an issue as I can relate to the elderly populace).

Although I didn't feel an immediate physical gratification afterward, yoga turned out to be an exhausting ordeal. When carried out properly, each pose takes precise body control and relaxation at the same time. In other words, it can be very physically demanding when done correctly. I will definitely be returning to the class for the next month or so.

Goal-driven person that I am, I have come up with the following goals:

• Move up to the Level II class within 2 weeks, as a way to challenge myself.
• Go to classes twice a week.
• Practice independently from time to time.
• Get in better shape and become more flexible.

Power of Apple

[Let me preface this blog entry by admitting that I dislike products made by Apple Inc. A big part of the reason is probably because I have never owned any Apple products -- and have been proud of this streak. I was somewhat disappointed when I installed Apple iTunes on my computer for the first time...because Windows Media Player was failing me.]

Admissions of bias aside, I really admire Apple for its massively-profitable business. I am also grateful for its effect on the consumer electronics market, on both the software and the hardware fronts. This is especially true in the recent years. Cases in point: the iPhone and the iPad.

The former (iPhone) revolutionized the cell phones market -- widely perceived as the biggest "game changer" since the Motorola Razr phone of the early 2000s. Apple had numerous critics before the release of the iPhone and faced paranoia from its shareholders that the company was shifting away from its core business (in computers and software). Skeptics questioned whether Apple, a company with no prior experience in the cell phone market, could be successful in a very competitive industry. Moreover, it was about to compete with a completely new design of a cell phone: a multi-purpose device that was accessed primarily via the human touch (aka touchscreen). Cell phones until then had mostly been flip phones with tiny screens and limited to making and receiving phone calls.

The latter (iPad) received even more skepticism (read: ridicule), as just an upscaled version of the iPod Touch. Many people, me included, argued that there was no market for such a product. Even if there was a market, sales of the iPad would cannibalize those of the iPod Touch. In other words, it seemed like a losing preposition for Apple Inc. to go ahead and market this product.

Fast forward each described product a couple of years and we see that Apple not only proved its skeptics wrong, but has been enormously profitable. It has surpassed its rival Microsoft in market capitalization and still showing impressive growth. Reviewing Steve Jobs' leadership over the past decade, one can only be envious of Apple Inc. and its remarkable turnaround. A feel-good story for everyone but its competitors. The iPhone remains the hottest cell phone around, not due to its specifications but on the strength of its applications store (App Store) and its ease-of-use to most individuals. As for the iPad, it has proved to produce a similar effect on the market as its smaller brother. Namely, it has created a new market for tablet products and forced competitors to catchup its lead. There was no perceived market for the iPad because one could not anticipate how it would be used by businesses, consumers, schools, etc.

So what makes Apple so successful? It doesn't take a rocket scientist to point to Steve Jobs as the answer. Jobs has been visionary in his leadership of the company, a prophet able to foresee what products consumers want and able to profit off that future vision. But I applaud Jobs not for his visions -- because other CEOs in the past have been able to have streaks of developing wildly popular products. Instead, I applaud his solidarity and strong sense of self-identity to see through his convictions. He appears to be above the typical CEO: always worried about his/her job security and how to best increase shareholder value. Jobs seems to be separate to accomplish the latter without the former preoccupation. Critics may laugh at his standard attire of turtleneck shirt, jeans, and New Balance sneakers but cannot deny his success.

But I'd argue that Jobs is not central to Apple's success (he is instrumental in building this though). The keystone to Apple's success is brand equity, one unparalleled in the corporate world. Apple's brand recognition is superior to any of its competitors -- not even Google, Sony, and Coca-Cola can compete against it. How do I know this? The fanaticism of Apple consumers can be laughed off as the pinnacle of materialism but, oh boy, would I give anything to have that type of brand loyalty. These "Apple fans" are often loyal to the fault (to themselves, not to the company). They consider any products made by Apple as the must-have item and trust completely in its superiority. Therein lies the key: Apple products are often not the most advanced nor the most consumer-friendly (and they are downright expensive), but consumers trust in the quality of Apple's products and in their value without a second thought. The company's marketing may be polarizing ("I'm a Mac and I'm a PC", anyone?) but it is extremely effective at distinguishing Apple from its competitors. The marketing also serves to build upon this perception that Apple product-owners are trendy and always have the coolest electronics.

From a behavioral economics perspective, Apple is successful because it has no competitors for its products. There may be substitutes such as Windows and the Motorola Xoom, but these are imperfect substitutes at best. Apple builds its own software and hardware, both of which cannot be licensed. To the consumer, the lack of substitutes means they have nothing to compare Apple products to and thus unable to judge their prices nor their capabilities effectively. This in economics jargon, is known as "price anchoring". Because consumers do not have price anchors with which to compare, they are at the initiative of Apple to dictate the value and the capabilities of its products. For example, $500 is an enormous cost for the iPad: a tablet without multitasking capabilities nor the ability for office productivity. One can purchase a netbook for half the cost of an iPad. The iPad is largely used to play games, surf the internet, and watch movies -- all of which a netbook can do. But the iPad offers some differences from a netbook (e.g. touchscreen) -- differences significant enough to leave consumers at a loss about how to perceive its value. It should be worth about the price of a netbook but, given the uncertainty, it makes it easy for Apple to double the price without losing the double amount of potential customers. One can even argue that Apple wants to price its products relatively high due to the association with the "premium quality".

Aside from Steve Jobs and brand equity, Apple also has other things that most people may not consider. I read an article recently describing the effectiveness of customer service at Apple Stores, and a perceived generosity of Apple's protection plans. Apple customer helpers are apparently very willing to help anyone in need with a single caveat --as long as the product in question is an Apple product. When and where the product was purchased does not matter. The tenaciousness (read: helpfulness) of the helpers also creates a positive impression for customers. (I recall the article's example of a photographer coming to the store to complain about his MacBook's deficiencies and walking out very happy with a newer model...that he just purchased himself). So, Apple's customer service is often underrated. Another underrated area is Apple's control over its distribution channels and the ability to lock up inventory and suppliers. Its tight control over the suppliers is indicated by the rare leaks about its upcoming products and the lack of shortages over its products. Both of these effects have additional ramifications (of course).

Since the introduction of the iPod, Apple has gravitated away from a focus on devices with linear capabilities and into devices considered to be "jack-of-all trades, master of none". The beauty lies in the responsiveness of the populace to the latter. It seems people do not care much for the quality of a capability but their quantity. Makes sense in a way: would you rather carry three gadgets with specialized functions, or a single device that can do all three but maybe not as well? I think that unless you are an expert photographer or music professional (what is the probability? About one percent?), then you'd take the latter in a heartbeat. Slap on the that Apple brand and it's a OMGWTFBBQ moment for many.

The Feeling of Pathetic

I have to admit something: sometimes I feel very foolish in both thoughts and actions. A lesser way of describing this phenomenon is what I now call "feeling pathetic". But this "feeling pathetic" should not be confused with helplessness -- rather it is the feeling of helplessness when in fact knowing there are tangible things to do. In other words, choosing to be helpless/weak/inadequate and ignoring the obvious truth.

Case in point: I am in love with this girl called Mandy and I obviously can't stop thinking about her. This testament may generate the "aww" or other romantic sentiments but, in reality, I know fully well how she feels about me (at least at this point in time). But instead of facing reality and living in complete trust of God and His plans for me, I worry incessantly about things like whether Mandy truly dislikes me, whether she has found someone else, and how life could be otherwise with her by my side. This is bad because these thoughts are very effective at distracting me from my current engagements (e.g. work) -- leading to daydreams and other ways of fantasizing. Perhaps more pathetically, I often find myself unwilling to deal with these thoughts and willingly choose to let them consume my energies. First example of feeling pathetic.

Another good illustration of this phenomenon is when I indulge my urge to control and plan out my future. Mandy-related plans aside, I often succumb to desires to plan out my life in the future. Not just the next few weeks or months, but years in advance. For example, one of the thoughts that has stayed with me recently has been what to do after I obtain my Masters degree in Finance. Do I seek to work for banks or hedge funds and seek to maximize my salary? Or perhaps do something else like focusing on personal development (read: own family)? This is pathetic because I absolutely cannot control the future and readily acknowledge that things just happen some times. But acknowledging this feeling of pathetic-ness does little to resolve the actuality of being pathetic.

Upon further reflection, these feelings of pathetic may have arisen from straying away from the concrete foundation that has anchored my life over the past few years. This is my spiritual life and my relationship with God. For one, I have ceased morning prayer and even reading the gospel -- when I have told myself many times that I would. Instead of trusting in God completely, I let fears and other anxieties get the better of me. I have to change...starting today.

Thoughts on Labor Unions

This morning during my workout, I watched a segment on CNN about how teachers in Wisconsin are calling sick in-mass as protest against the proposal to cut their wages and benefits. I was appalled that, as a consequences of their actions, many schools were closed down and students unable to attend class. (While students may be happy to be missing school, they don't really know any better...) The cause of all this points to the powerful teacher unions in Wisconsin, as well as many other states. Teacher unions are not much different from other labor unions, like the UAW and the Poster Service Workers Union. In my humble opinion, labor unions largely exist in detriment to modern society.

When someone mentions teacher unions, the example that pops into my mind is the "war" waged by former Washington D.C. schools superintendent Michelle Rhee against her union counterparts. A little background: D.C. public schools have been notorious for many years about its perverse cost-per-student to student performance ratio. Each year, the school systems spends around the same amount of money per student as in New York City but its students perform much poorer than their Big Apple counterparts. In an effort to ameliorate this problem, the former Washington D.C. mayor appointed Michelle Rhee, someone with minimal educational experience aside from a stint with Teach for America, to head reforming the district's education system.

Although she had her own flaws (e.g. overbearing personality and very confrontational with anyone), Michelle Rhee began closing under-performing schools and laying off teachers considered inept. Her ultimate goal was to greatly reduce, if not eventually eliminate teacher unions, and put all teachers on a merit-pay system rather than the common seniority system. And boy did she run into opposition. Teacher unions obviously opposed her actions with ferocity and attempted to stifle Rhee's efforts on every side: politically, financially, etc. Teacher unions also mobilized PSA (Parent Student Associations) to side with them on the matter. Rhee's slugged through the difficulties --largely resulting from her explicit backing of the former governor.

Yet in the end, her effort largely failed and both she and the governor left their positions. (She actually resigned because the governor had lost the reelection to someone else). There were marked improvements in standardized test scores and greater efficiency, but the movement fizzled out with her out of power. I saw on the news last week that the teacher union is pushing the current Washington D.C. mayor to reinstate teachers fired under Rhee, with back-pay for any time lost since their firing. That is absolutely absurd. Rhee's personal flaws aside, she must have had valid reasons to fire the teachers that she did.

I think the problem of modern day education is quality of educators rather than their quantity. I recall during high school (I attended a public high school) that there were many amazing instructors. My biology teacher actually fostered a passion of biology in me and I learned many many things from a number of others. My French teacher, who left before my senior year, actually cried when she admitted ot the class that she had been offered a better position at a nearby university. But for every great teacher, there are probably two average and two poor teachers. I recall that there were some teacher who did not care much for its students -- instead bent on teaching things they considered appropriate, or the minimum possible.

As a student for many years (even now, in graduate school), the teacher plays a pivotal role in the development of not only knowledge but also passion for knowledge. The latter is arguably more important because, only with passion will one have the curiosity to look beyond the obvious and/or beyond the bare minimum. It is the nectar what cultivates future innovation and future leaders.

In the current economic environment, with states facing record budget deficits, government spending must be cut in certain areas. Everyone has to share the financial burden if they want to see the survivability of their jobs. Unfortunately, people tend to be myopic and thus fail to see that having their way now means a bleaker future for themselves and, perhaps more importantly, their children.

Although I agree that teachers today are mostly under-compensated, I think the problem lies in the incentives system currently in place rather than public governance. The merit-pay system seems to be an extremely fair compensation scheme: compensate teachers for how their students perform first and foremost. Although the measure of student performance (e.g. standardized tests) are not the best and can definitely be improved upon, it is much better than the current system of rewarding teachers based on their years of service. This is because years of service is a wholly independent criteria (read: irrelevant) to educational standards. How are the number of years of service indicative of how well you teach? I can see a counterargument of "years of service equals experience" but I would re-counter this with the fact that experience is the antithesis of adjustments needed. Teachers who have tenure have no incentive to change their methods, even if their students are failing left and right. Change is necessary as a precursor to better introduce new and better methods of reaching out to students.

In the end, I argue that labor unions such as teacher unions are antiquated organizations. They are vestiges of a past where companies abused their workers (e.g. 19th century steel manufacturing) and the government did little to help the average Joe. But nowadays, there is a dizzying array of instruments through which anyone aggrieved can seek to address others' wrongdoing. For example, companies know better nowadays than to permit workplace harassment or employment discrimination -- because the government will punish them accordingly. Unions of today have little function than as a collective platform to push for ever-increasing wages and benefits, as well as to limit entry into their areas of profession. They function as artificial barriers of free enterprise and thus very much inefficient/wasteful. With minimal training, I think most of the currently unemployed can work the assembly line or teach in the classroom. There are a great number of intelligent, well-educated individuals eager for jobs like the ones held on union members. Why can't companies just boot out all their union members and hire new non-members instead?

As another example, unions always put their members first and will often force companies to transfer employees than to fire them. Teacher unions are notorious for moving teachers between school districts instead of allowing these teachers to be fired -- about violations of conduct. Albeit with much controversy, I will make the analogy that teacher unions are like the Catholic Church: transfer pedophile priests between churches rather than expelling them outright. The transfer only provides fresh ground for abuses...

Happy Hour: Ping Pong

One of the new attractions of post-graduate life is attending happy hours with friends. A "Happy Hour", for those unfamiliar with the terminology, is a fixed time slot in most restaurants or bars during which prices for drinks and food are greatly reduced. They normally last only for a couple of hours on weekdays, directly after work hours (e.g. 5-7pm). Happy hours are pretty popular for young professionals -- probably due to the reduced prices of beverages and food.

So I attended a happy hour last night with a couple of friends from high school. We went to Ping Pong, a dim sum placed located in Chinatown. The place was pretty posh and spacious, so I was impressed. Their happy hour is from 4-7pm on weekdays and, by the time we left around 7pm, it got very packed.

To be honest, I am not much of a drinker nor a connoisseur of different cuisines. The main reason I went was to catch up with the two friends. The dim sum was good but it was too pricey -- even with the happy hour prices. Drinks (I got the "Ping Pong") were okay, as it wasn't really anything too unique nor extravagant. The waiter was helpful though and the atmosphere pretty good so, altogether, everything was alright.

On the way out, I was struck by the multitude of people crowded around the bar. I recall making a comment about how some people probably do this everyday -- at different restaurants probably. Just not quite the thing for me: I'd much rather go to a sit down place or tour somewhere and grab a quick bite to eat. Good experience though.

Value Investing

In the little spare time I have, I have recently begun reading "The Big Short" by renowned author Michael Lewis. The book details the background of the financial crisis of 2008-2009, including little known facts such as the players involved and the messed up nature of the motives. Lewis provided as good of a explanation as can be found on what sub-prime mortgages and credit-default swap are -- and how it was manipulated by major financial corporations for a gain. I am pretty appalled at the fact that intelligent people would be so carried away by the greed.

One character from the book (thus far) stands out: Mike Burry. I believe the guy is still around -- he is a self-professed value investor who foresaw the crash of the housing market and bet heavily against it through his hedge fund Scion Capital. Prior to betting on credit-default swaps, Burry had consistently beat the S&P500 index through "value investing".

Value investing is picking particular stocks/securities that are seemingly undervalued by the market -- in other words, what Warren Buffett does. The key is being able to show great patience and not just look for short-term gains. The investor has to analyze the cash flow projections of companies and understand not only its product line, but also the industry as well.

I discuss value investing because it is pretty much what I am attempting to do -- only I am not so patient sometimes. I started buying stocks in May 2009, when the stock market was slowly recovering from its bottoming out two months prior. I essentially put all my equity into a number of companies:

• Nvidia, Citigroup, Ford, GE

A couple of months in, I decided to sell Nvidia and Citigroup and instead acquire some of AIG, some of Wells Fargo, and some of AMD. The reasoning are as follows:

• Selling Nvidia -- I originally bought the shares on the hype of its Tegra chips, which promised to revolutionize computing. The only problem at the time was, these chips were not due to be on the market for at least a couple of years. Nvidia stock actually doubled over the past couple of months. But at the time, it showed minimal changes and looked like they would be quashed by...
• ...Buying AMD -- I am a geek and so like to read news about computing technologies. I was determined to hold onto a tech stock and AMD looked good at the time. Sure they were in debt and were dwarfed by Intel in the market, but I think they had great potential.
• Buying AIG -- purchased these shares purely on the fact that its price had jumped 2-fold that day. I realized that it (acquired for $20/share) had potential to go even higher, especially since it was worth more than $600 per share not two years earlier.
• Selling Citigroup -- pretty much a trade for Wells Fargo stocks. Wells Fargo looked better since it had much lower debt.
• Buying Wells Fargo -- strictly as a means of diversification. Bank stocks were performing great back then and I had high hopes they would continue. Wells Fargo had also just absorbed my bank, Wachovia. Unfortunately, this stock languished for about a year and I ended up liquidating it for little profit.

I think it was back in November 2009 when I made my second adjustment or, as-you-will, series of trades. I ended up selling AMD for its lack of performance; sold a portion of AIG when it peaked around $60. I believe my holdings at the time were: AIG, GE, F, Wells, and AMD. These stocks I would hold until about a year later.

Last October, I made my third adjustment that essentially diversified my holdings even more. Ended up selling AMD, Wells, AIG, and a minor portion of GE in favor of buying AOL, AXP:

• Buying AOL -- I had been trying to get a job with AOL the months prior and in the process learned a substantial amount about the company. It looked like it was bouncing back and was a major player in the online advertising market. Google may the the king of search, but AOL controlled a significance market share of display advertising through its subsidiary Advertising.com. Also, there were rumors the company would be acquiring Yahoo!. I ended up liquidating these shares for a minor loss for the lack of performance and the passing of the acquisition rumors.
• Buying AXP -- its price had dropped significantly that day on news of an antitrust ruling against the company, Visa, and Mastercard. It had solid cashflow, paid okay dividends, and thus seemed undervalued. This stock performed okay but not great.

About two months later (November 2010?) I ended up consolidating my positions by selling off everything except for GE and Ford. I used the proceeds generated to acquire more Ford and reacquiring AMD. The former because it looked promising in the long run (and a friend shared similar thoughts) and the latter due to its release of the Fusion chips. We shall see.

One of my struggles has been the lack of capital, without which I cannot create economies of scale. Even with the low transaction cost of $5, it is hard to generate any substantial gains/profits without relying exclusively on major stock price increases. The latter is difficult to comeby and more difficult to identify (the stocks about to explode). In other words, I could generate a good profit if able to purchase 2000 shares of a company instead of 200...

Mandy

(Foreword: Mandy is not the name of the actual person, just a pseudonym for practical purposes. Let's just say I have an irrational fear of being identified.)

Mandy is the girl of my dreams. Actually, as the movie "500 Days of Summer" says so well, she is better than the girl of my dreams...because she is real. She is kind, beautiful, quirky, and absolutely amazing. (Affection can be very difficult to define -- and I almost certainly failed to define it here.)

Why do I like her? Aside from the reasons I just mentioned, I do not exaggerate when I say that she has the power to make me happy on any given day. It's funny because her mere presence can do that...which sounds vaguely pathetic... We also happen to share very similar religious beliefs, of similar age, and from similar cultural backgrounds.

(Yes, I am pretty much in love with Mandy.)

But unfortunately, Mandy does not feel the same about me. I know for certain because she has told me so herself. No reason was given.

(Yeah...I am going to stop writing this post. Not a happy subject...)

Development Goals

A little background about me:

I graduated last May from a private university with a double major in Economics and in International Studies. Following a 2-month hiatus of finding a job, I took the opportunity to become a paralegal for a well-known immigration law firm. The original intention was to gain experience before ultimately going to attend law school. But I wanted to have a Plan B in case my interest waned and thus began taking graduate courses for a past-time Masters in Finance program. I was glad to have done so because my interest in the legal field ultimately did fizzle out.

I was very fortunate to have been offered an entry-level position in an international consulting firm in Washington D.C. So I gave notice to the law firm (which was one of the most difficult things to do -- akin to breaking up with someone) and began the new year in my new job as a Business Analyst. It has been a very positive experience thus far...

...but looking ahead, I have thought about a number of development goals for myself. They are separately vaguely by category and not ranked in any particular order. I hope to better explain some details as time goes on:

Academic Development

• Increase GPA for the graduate program (3.7+<)
• Build comprehensive skills and understanding of modern businesses
• Network with peers and professors
• Improve language skills (e.g. Chinese Mandarin, French, Portuguese)

Spiritual Development

• Grow deeper in faith and in trusting God for everything
• Live in thankfulness everyday and with humility
• Love others with the lovingkindness God has demonstrated
• Serve the church and minister to others

Personal Development

• Volunteer time to help those in need, and increase charitable giving
• Become a better and more effective orator/communicator

Social Development

• Win over Mandy (Mandy = girl of my dreams)
• Become more sociable to others
• Continue to maintain friendships with high school friends, college friends, and family

Career/Professional Development

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• Mastery of Access, Excel, and Oracle Applications
• Complete Element K Certificate programs (PMP, Office Specialist, etc.)
• Become integral part of project team and of the company
• Understand the company business better

<>

• Migrate onto "Future State" team
• Take on additional leadership duties and network with corporate leaders
• Continue to network and explore other possibilities within the company

• Start my own business as a learning experience

Lawsuit!

This morning I traveled to the County General District Court and filed a small claims lawsuit against a former landlord, to the amount of $500 plus the $56 filing fee. I have been trying to settle the matter amicably but it has gotten nowhere. Therefore, I have resorted to legal action.

Background of the case:

About two weeks ago, I made a $500 deposit for an apartment --or rather, a room in a 3-bedroom apartment-- with the intention to take up residence beginning of this month. The rent for the room was less than $800 dollars, everything included, which seemed like a great deal at the time. However, I realized shortly afterward my financial condition would be stronger if I tried to find somewhere else cheaper. I gave notice to the landlord two days after making the deposit, with an understanding I would be receiving a major portion of my deposit back.

Fast forward two weeks, and I still have to see the return of my deposit. The landlord argues that I forfeited all my "security deposit" because I changed my mind -- and the receipt we both signed indicated this as a term. But, the law code actually defines my deposit as an "application deposit" since it was for securing a place for future residence. The law indicates that I have the right to see the return of my application deposit under most circumstances. Thus I pointed this to the landlord and sought to settle with him for $400, in addition to finding him a replacement tenant. However, for some unknown reason, he has refused these terms of settlement. He seemed very much adamant about keeping my deposit --and even ignored the replacement tenants I had found him.

Arguments for the case:

• The law code clearly defines my deposit as an "application deposit" and indicates it should be returned to the tenant in case the dwelling is not ultimately rented. Government documents even point out that clauses indicating a forfeiture of deposit are "probably not enforceable".
• I gave notice in good faith two days following making the deposit. The landlord essentially had two weeks to find a replacement tenant --an action in which I offered my ready help. I even referred him to number of my friends, whom he turned down.
• Landlord made no effort to contact other prospective tenants, especially one of whom was very interested and responsive about the place.
• We reached a verbal agreement that should I find him a replacement tenant, he would refund me the entire deposit. He clearly did not intend to honor this agreement.
• Landlord since stated there is no lease agreement to sign for the apartment, a fact not revealed to me beforehand. I cannot take an apartment without signed documentation granting me tenancy to the dwelling.
• Landlord indicated in his last email he did not wish to rent the dwelling to me any more, thereby effectively ending any previous agreement and releasing me from taking the apartment.
• I made every attempt to settle this matter amicably. Landlord ceased communications with him (e.g. refusing to respond to emails, phone calls), except for the last email in which he argued he felt threatened and no longer wishes to rent the room to me.

My hearing is in 2 months time. This will be my first ever civil lawsuit, unless it is settled beforehand... Yikes!