Weekly Roundup 15: A Curated Linkfest For The Smartest People On The Web
Attention: I appreciate your patience. Normal programming will resume tomorrow. Thanks again and I hope these links will hold you over until tomorrow.
Here are some links to articles that didn’t make our front page. Several of the articles are very insightful I highly recommend reading them. As always, the articles are from different fields but should make you a more well rounded investor. Take Care. (Click on the titles to access the articles)
1. What Is Academic Freedom – via Rationally Speaking – Time to put New York Times’ columnist Stanley Fish in his place, again. Fish is a rather interesting kind of animal: an academic through and through (he is, after all a professor of law at Florida International University and dean emeritus of the College of Liberal Arts and Sciences at the University of Illinois at Chicago, and before that has taught at the University of California at Berkeley, Johns Hopkins and Duke University), who nevertheless relishes harsh criticism of academia. I have taken him to task before for his comments on the “new atheism” and for his unbounded enthusiasm for much nonsense that goes under the umbrella of post-modernism and deconstructionism.
2. Household Income & Debt Trends Since 1980 – Via Credit Slips – The folks who write Credit Slips are among those who have long wondered what the “exit strategy” was for an economy that was predictably on a wobbly course, with about 70% of GDP driven by household spending when many of those households were on kind of shaky ground. That’s obviously not a sustainable long term strategy for economic growth when, on one hand, the income side of the ledger for a large share of those households was sputtering or stalling, while demands on the expense side from big ticket, basic items like health care and health care financing, education, and housing were growing. The American household debt burden looks like a more complex problem if you think about the cumulative impact of all of these trends, rather than just thinking “flat screen TV” and stopping there.
3. The End Of History – Via Francis Fukuyama – In watching the flow of events over the past decade or so, it is hard to avoid the feeling that something very fundamental has happened in world history. The past year has seen a flood of articles commemorating the end of the Cold War, and the fact that “peace” seems to be breaking out in many regions of the world. Most of these analyses lack any larger conceptual framework for distinguishing between what is essential and what is contingent or accidental in world history, and are predictably superficial. If Mr. Gorbachev were ousted from the Kremlin or a new Ayatollah proclaimed the millennium for a desolate Middle Eastern capital, these same commentators would scramble to announce the rebirth of a new era of conflict.
4. David Swensen Says Most Endowments Shouldn’t Be Like Yale – Via ProPublica – David Swensen, the chief investment officer at Yale University, has enjoyed great success. When he arrived in New Haven in 1985, Yale’s endowment was worth just over $1 billion; as of the end of June, the endowment was worth nearly $23 billion. Swensen invested heavily in private equity funds, real estate and hedge funds, a strategy that initially met with some skepticism. Not all U.S. universities followed Swensen’s lead, but many of those that didn’t hoped to do so someday. Imitators include private foundations, pension funds and even the sovereign wealth funds of oil-rich nations.
5. The Art History Web Book – Via Oculture – Now there’s a nice alternative to the traditional, expensive art history textbook. The folks at smARThistory have created a free multi-media web-book that offers a dynamic survey of art history. The online resource combines traditional images with audio and videos, and the beauty is that you don’t have to read this web-book in a linear fashion. Rather, you can sort through things by time period, style and artist and find the information that you want. In case you’re wondering about the credibility of this resource, it doesn’t hurt to mention that one of its founders, Beth Harris, is the Director of Digital Learning at the Museum of Modern Art in New York City, and the other, Steven Zucker, is Dean of the School of Graduate Studies at the Fashion Institute of Technology, part of the State University of New York. Have a look.
6.Canadian Oil Sands – Via National Geographic – In Boucher’s memory, though, the change begins that day in 1963, on the long trail his grandfather used to set his traps, near a place called Mildred Lake. Generations of his ancestors had worked that trapline. “These trails had been here thousands of years,” Boucher said one day last summer, sitting in his spacious and tasteful corner office in Fort McKay. His golf putter stood in one corner; Mozart played softly on the stereo. “And that day, all of a sudden, we came upon this clearing. A huge clearing. There had been no notice. In the 1970s they went in and tore down my grandfather’s cabin—with no notice or discussion.” That was Boucher’s first encounter with the oil sands industry. It’s an industry that has utterly transformed this part of northeastern Alberta in just the past few years, with astonishing speed. Boucher is surrounded by it now and immersed in it himself.
7. Ten Books Every Teacher Should Read – Joe (a prospective teacher in an certification program) teasingly asks what is on my list of books about education that everyone should read. More useful, perhaps, would be my list of books that every teacher/prospective teacher should read. So, here’s the first in an occasional series of Brighouse recommendations. This is not strictly one that every teacher should read, but certainly every American non-rural public school teacher, and I’d guess most private school teachers too.
8. A New Day For Intellectuals – Via Chronicle – Soon after election day, the columnist Nicholas D. Kristof wrote in The New York Times that the “second most remarkable thing” about the election was that “American voters have just picked a president who is an open, out-of-the-closet, practicing intellectual.” What goes on here? Was the historian Richard Hofstadter wrong in his classic Anti-Intellectualism in American Life to detect an irresistible current in our society of “resentment and suspicion of the life of the mind and of those who are considered to represent it”? Has that current weakened or been sufficiently dammed up to explain the election of a president who is reflective about history and ideas as well as about policy and practice?
9. How Goal Setting Can Lead To Diaster– Via Wharton- In early 1969, just as the U.S. was preparing to reach John F. Kennedy’s lofty goal of sending Americans to the moon, the famed Ford executive Lee Iacocca gave a similarly ambitious mandate to his team of engineers. Faced for the first time with competition from low-cost, high-mileage foreign imports, Iacocca set a specific target: Ford would design a new automobile that weighed less than 2,000 pounds and sold for under $2,000, and it would be on the showroom floor in time for the 1971 model year. What resulted was a mad dash to create the Ford Pinto.
10. Moving Beyond OldThinking About New Risks – Via Wharton – The 9/11 terrorist attacks, Hurricane Katrina and the recent financial collapse: These and other recent catastrophes are a wakeup call for the need to better prepare for natural and man-made disasters that have wider effects as the world grows more interconnected. But do we have the planning tools we need? Perhaps not, some experts in risk analysis warn. And even if experts could develop better statistical tools, there are human tendencies to be overcome, like the habit of downplaying some risks and overreacting to others. Reason becomes clouded when people assess emotion-laden events like terrorist attacks, making public-policy decisions on risk very difficult, according to participants in a recent Wharton risk management conference titled, “The Irrational Economist.”
11. You’re Not As Attractive As You Think – Via Observations Of A Nerd – Sure, no one wants to think they’re ugly. Statistically some of us have to be, but no one wants to think they’re below average. But most of us, save a few that Carly Simon might have sung about, think we’re pretty accurate about how we look. We know if we’re a 2 or a 10 – whether we like to admit it or not. Or, do we? An ingenious study published in Personality and Social Psychology Bulletin (PDF) looked at how well people knew their own face. They took neutral photos of people and morphed their images to different degrees to either be more “attractive” (like a composite face) or “less attractive” (people with craniofacial syndrome). They then asked the participants to choose their actual, unmorphed photo from the variety of choices.
12. Why Stocks Still Aren’t Cheap– Via NYT – At long last, are stocks cheap? Amazingly enough, they still are not, at least by one commonly used measure.Stocks fell again today. The Standard & Poor’s 500-stock index closed at 770, which isn’t too far from the low of 752 that it reached in November. In inflation-adjusted terms, the index is about 55 percent below its 2000 peak. Those comparisons certainly make it sound as if stocks are incredibly cheap. But they aren’t, at least not according to the price-earnings ratio. That ratio, a standard measure of market valuation, divides the average price of stock in the index by the earnings of the companies in the index.
13. Robert Shiller’s Animal Spirits Lecture-Via Grasphing Reality With Both Hands – It is in some part Robert Shiller’s fault that I am an economist. In the spring of 1979 I was talking to my freshman economics teacher and saying: gee, it seems that economics is all about how the market is always perfect–or can be made perfect with a minor technocratic tweak or to. But that’s not true–was it Rick Ericson?–told me. Here is a paper by a hotshot young Yale economist that says that financial markets are really lousy at their job–and he handed me a xerox of an article by Robert Shiller.
14. Video: Joseph Stiglitz On The Problem Of Too Much Borrowing – Via BigThink
15. Why It’s Important To Reward Stupid People – Via BigThink
16. Video: David Mindell: The Evolving World -Via Fora.Tv
17. The Capitalist Consensus -Via Cafe Hayek – To a high degree the capitalist consensus held until last spring. It was then that Bear Stearns, a fairly minor bulge bracket investment bank, ran into trouble. With its share price in freefall heading into the weekend, officials at Treasury and the Federal Reserve effectively blinked, and a forced marriage ensued in which J.P. Morgan purchased Bear for next to nothing in return for the Fed taking on the fallen investment bank’s “toxic assets.”
18. The Universe In 2009 – Via Flowing Data – Seed Magazine, a publication dedicated to cool things in science, give us The Universe in 2009 In 2009, we are celebrating curiosity and creativity with a dynamic look at the very best ideas that give us reason for optimism. Rethink your assumptions and post better questions about the future. The Universe in 09 is essentially a simple mosaic where each tile is an idea. There’s something that resembles a bar graph up top. Each bar represents a category, and as you scroll over a category, the height of the bar represents the numbers of ideas in that category (I think). It’s not meant to be analytical really. It’s mostly for fun, and they did a pretty good job at accomplishing that goal. The interaction is pretty entertaining. Check it out for yourself.
19. Financially Speaking Is College A Raw Deal – Via Thinking On The Margin – In this video, the statistic that college graduates on average earn $1,000,000 more than people who do not get a college degree is quoted regularly. As I have written before, your expected salary depends largely on what you choose to major in. College is not binary — either you go or you don’t. Instead, it matters tremendously both what you study and where you go. Not all majors are created equal. Not all colleges are either.
20. Renting Way Underrated – Via Thinking On The Margin – This is something I’ve been saying for years — long before the effects of the housing bubble were felt. Renting gives you much more flexibility in terms of where to live, ability to move, and increases the amount of disposable income you have for saving, spending, and/or giving. Renting also tends to free up your time as you are able to live closer to work than you would if you bought a home. I’ve rarely lived more than 15-minutes from work or school and often much closer than that. Renting has also freed up more time with the lack of maintenance I’ve had to put into keeping up my place. This has given me extra time to read, do volunteer work, and spend time with friends.
21. Consumers Fixated On Minimum Payments – Via Finance Professor -Anchoring is a term often discussed within the realm of Behavioral Finance. Like its closely related sibling heuristics (or using rules of thumb), Anchoring may lead us to expect that a stock price will go back to a previous high just because we remember it being there. It also can give high priced stocks the appearance of being better than low priced stock. Here is an interesting look at what I guess I would call Behavioral Personal Finance. Customers’ Fixation On Minimum Payments Drives Up Credit Card Bills: “The research, by University of Warwick Psychology researcher Dr Neil Stewart, is to be published in Psychological Science, in a paper entitled “The Cost of Anchoring on Credit Card Minimum Payments”. It focuses on the psychological phenomenon of “anchoring” in which arbitrary and irrelevant numbers bias people’s judgments. The research reveals that anchoring affects the way people repay their credit card bills. For those people who make only partial repayments of the outstanding balance (about 35% of card holders), the suggested minimum payment on the credit card statement acts as an anchor and lowers the actual repayments people choose to make.”