In the industrial era, economists thought they had a pretty good handle on economic drivers. Low interest rates spur investment. Investment results in more hiring. More hiring drives wages upwards as companies compete for workers. Having more and better-paid workers creates competition for goods and services as they spend their wages, thereby pushing prices upwards … Continue reading How technology has broken some economic concepts
The fairness of college debt forgiveness
On April 21st, I published a blog post arguing that educational debt forgiveness is largely untenable, even ignoring the cost. As it happened, I had already written the post when presidential candidate Elizabeth Warren announced large-scale debt forgiveness as a major part of her platform. There are myriad problems with debt forgiveness but the most … Continue reading The fairness of college debt forgiveness
How my son started investing
In 2015, I decided to get my 14-year-old into investing. The school year is busy, so we started in June. Over years prior, I had taught him the basics of investing. We went over the the definitions of stocks and bonds, and then moved on to funds. I explained the basics of valuation measures such … Continue reading How my son started investing
Are stocks too expensive to be attractive?
The foundation of fundamental analysis is determining whether companies, sectors, and markets are expensive or cheap relative to measures of their inherent value. The most commonly-cited measure of value for stocks is the price-to-earnings (P/E) ratio. We might look at the most-recent year's earnings, the standard for P/E, or average earnings over a longer period … Continue reading Are stocks too expensive to be attractive?
Tallying the ultimate costs of debt
Carrying debt can have costs far beyond the interest paid, something that few people fully appreciate. Debt repayment has substantial opportunity costs, which means that there are decisions that are unavailable because you are repaying debts. A substantial component of these opportunity costs relates to tax benefits. Lost tax benefits The single most important opportunity … Continue reading Tallying the ultimate costs of debt
Climate policy, economics, and ethics
The debate about climate policy has gotten way off base. For every article discussing the scientific consensus, there are countless others in which people come up with a range of counter arguments. This is similar to the anti-vaccination movement. For the "anti-vaxxers", it simply does not matter that there is enormous scientific evidence that the … Continue reading Climate policy, economics, and ethics
Funding consumption with debt
One of the largest factors in being successful with money is the ability to manage debt. In modern America, we have become accustomed to taking on ever-higher levels of debt. This substantial growth in household debt is a major issue for both individuals and society as a whole. The growing burden of debt The key … Continue reading Funding consumption with debt
Thoughts on the Financial Independence / Retire Early (FIRE) movement
The Financial Independence / Retire Early (FIRE) movement is much in the news these days. You can hardly go to a financial website without seeing a headline about someone who "retired" in their 30's. There is, not surprisingly, plenty of debate about what distinguishes retirement from being a professional blogger who writes about FIRE. Much … Continue reading Thoughts on the Financial Independence / Retire Early (FIRE) movement
Under-performance of value investing
One of the best-established 'anomalies' in investing is the value premium. Over long periods of time, value stocks have substantially out-performed growth stocks. Over the last decade or so, however, growth has trounced value. On the other hand, even over the last twenty years, value investors have been well-rewarded. Blackrock's Dr. David Ang provides a … Continue reading Under-performance of value investing
Options-based market outlook for the rest of 2019
As readers of my posts on Seeking Alpha will be aware, I apply a quantitative model to options prices on index ETFs to derive market outlooks. Options prices represent bets as to the probabilities that a security will rise or fall by some amount over a specific period of time. By taking the market prices … Continue reading Options-based market outlook for the rest of 2019
Geoff Considine on Finance and Economics 