Unemployment is one of the most cited statistics in gauging the health of the economy. Low unemployment numbers are used to suggest that the economy is thriving. Today, the official unemployment rate is 3.5%. Conclusions drawn from unemployment rate, without considering other statistics, may be highly misleading. There are two key statistics that need to … Continue reading Misleading statistics on unemployment
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Misleading statistics on the economic value of college
One of the most commonly-cited statistics about college is that the average graduate from a four-year college will earn a million dollars more over their lifetime than a high-school graduate. Most recently, this statistic has been propagated in a study at Georgetown, but this talking point has been around for much longer. Will a college … Continue reading Misleading statistics on the economic value of college
Thoughts on being a quant
I have worked on developing quantitative models in finance for more than twenty years. I am what is referred to as a quant. People who work as quants typically have advanced degrees in a STEM discipline and expertise in developing and testing mathematical models. It is common for quants to enter finance after they have … Continue reading Thoughts on being a quant
DIY Equity-Linked Notes
Over the years, I occasionally run into equity-linked notes (ELNs), financial products that are often sold as providing access to some of the potential upside from stocks and guaranteed protection of principal (there are many variations of ELNs). Most recently, I read a super-enthusiastic sales pitch on these products in Tony Robbins' book, MONEY: Master … Continue reading DIY Equity-Linked Notes
Is it useful to discuss the ‘average American’?
In discussions of all sorts of public policy, it is common to see references to the average American or the average household. It seems to me that the entire idea of the average American household may be fairly meaningless. About 33% of Americans have a college education. The average incomes of people with college degrees … Continue reading Is it useful to discuss the ‘average American’?
When early retirement doesn’t work out
As a financial professional and an avid individual investor, I have followed the evolution of the Financial Independence / Retire Early (FIRE) movement with considerable interest. I have written a couple of blog posts on FIRE here and here. I just ran across an article saying that one of my favorite FIRE authors, Financial Samurai … Continue reading When early retirement doesn’t work out
Econometric analysis of the S&P 500: November 2007 vs. November 2019
Trend-following models have a long history in portfolio management, and there is solid evidence that these strategies can provide risk-adjusted return that is above a buy-and-hold approach. The simplest approach to trend following is to buy when the price of an asset class (as represented by an index fund, for example) rises above the trailing … Continue reading Econometric analysis of the S&P 500: November 2007 vs. November 2019
The winner-take-all society
Inequality is, undeniably, increasing in the United States. Wealth concentration is high and rising. The richest 1% of households in the U.S. have 29% of total wealth and the richest 20% have 77% of total wealth. Another way to frame this situation is that the top 1% have more wealth than the middle 60% of … Continue reading The winner-take-all society
Is it finally time to bet on value again?
Research Affiliates, a large money manager and research firm, has recently reaffirmed it's faith in value investing, the discipline of investing more heavily in stocks which appear cheap relative to their earnings or book value. Back in April of 2019, I wrote a blog post that explored the under-performance of value over the last fifteen … Continue reading Is it finally time to bet on value again?
Investor lessons from the Theranos scandal
I recently read Bad Blood, a great book about the rise and fall of Theranos, a venture-funded company that was once a darling of the tech world. The company claimed to have invented technology that could perform a wide range of blood tests with only a single drop of blood. The company raised a whopping … Continue reading Investor lessons from the Theranos scandal
Geoff Considine on Finance and Economics 