Blog - Page 5 - Luther Wealth

September 18, 2019

School Shootings and Availability Bias

Did you know that today’s young parents were about 58% more likely to get shot at school than today’s school-aged children? Contemporary thirty-somethings actually went to schools with much more frequent shootings than today’s teenagers do.

This probably seems incorrect to most people. Most people think that nowadays kids have to deal with dangers that weren’t present in the good old days. But when you look at the data, it turns out we are all wrong about this. So why is our trusty intuition so off-the-mark?

August 28, 2019

Wednesday Reading List – 28 August 2019

Really great post from Cliff Asness at AQR this week on bond valuations.

The 1619 Project. NY Times.
Are Health Administrators To Blame? Alex Tabarrok.
Bonds Are Frickin’ Expensive. Cliff Asness.
A Novel Concept: Silent Book Clubs Offer Introverts A Space To Socialize. NPR.
Major book publishers sue Amazon’s Audible over new speech-to-text feature. The Verge
The Poorest 20% of Americans Are Richer on Average Than Most Nations of Europe. justfacts.com. I have some issues with the analysis but interesting discussion.
The most dangerous idea in central banking, explained. Vox. Agree that this is a bad idea.
Circumstances in Which I Will Not Pet Your Dog. New Yorker. Yep.

August 23, 2019

How To Protect Your Portfolio From The Yield Curve Inversion

You’ve probably read some stuff about the yield curve inverting earlier this month. Or at least heard someone talking about it in the last few weeks. What’s up? Is there going to be a recession? What moves should you make with your portfolio to protect yourself?

August 14, 2019

Wednesday Reading List – 14 August 2019

I really enjoyed the article about Google’s internal culture, but the key article this week is a short blog from PIMCO on the possibility of negative interest rates in the U.S.

How Government Prolonged the Lobotomy. AIER. Super creepy.
What is Amazon? Zack Canter. HT Tyler Cowen.
Study: many of the “oldest” people in the world may not be as old as we think. Vox. I feel like this type of thing is going to pop up more and more as people do Big Data things.
Three Years of Misery Inside Google, the Happiest Company in Tech. Wired.
How One City Saved $5 Million by Routing School Buses with an Algorithm. Route Fifty.
GitHub Stars Won’t Pay Your Rent. Medium.
Interest Rates: Naturally Negative? PIMCO. The world is not prepared for a negative dollar interest rate.

August 6, 2019

How Should Your Teenager Spend Their Summer?

I like using the logic of financial analysis to solve everyday household problems. In the past, I have looked at whether I should bail on my old truck, and whether you should for an MBA. In that spirit, I’d like to take a look at a subject that has no bearing on my own life, but I’m interested in nonetheless. What types of activities should you encourage your high school aged kid to take up during their summer breaks?

August 2, 2019

Friday Reading List – 2 August 2019

Support for minimum wage hikes, food stamps, passive indexing, and free trade. I’m kind of all over the place this week. Plus an engraving of Adam Smith wearing one of those cool wigs like a boss.

Congress has never let the federal minimum wage erode for this long. Economic Policy Institute.
Verdict Is In: Food Stamps Put Poor Kids on Path to Success. Bloomberg.
Trump Says U.S. Will Hit China With More Tariffs. NY Times.
Winner Takes All Applies to Stocks, Too. Barry Ritholtz. Barry interprets this data as providing encouragement to both active investors and passive indexers, but I see it as strongly supporting indexing, and no support for active investing.
The progressive case for free trade. Vox. This is an interesting piece. I agree with all of it, but this is most definitely NOT a “progressive” case for free trade. It’s a concise outline of the basic economic, moral, and libertarian case for free trade. A+ on the article, F- on picking a title for the article.

This guy knows the case for free trade!
Portrait of Smith by John Kay, 1790

July 30, 2019

News Sources: How to Stay Informed and Limit Bias

The reliability of various news media was a focus of discussion during the 2016 and 2018 elections. Various news sources have been criticized as biased, or even “fake”. A lot of analysis indicated that the opposing sides of the political debate were consuming very different information. Is there a way to improve how we consume news?

July 26, 2019

Friday Reading List – 26 July 2019

16,000 Readers Shared Their Experiences of Being Told to ‘Go Back.’ Here Are Some of Their Stories. NY Times.
New Inequality Data Is a Gift to Campaign Sloganeers. Barry Ritholtz.
Josh Hader’s Fastball Is Baseball’s Most Mysterious Pitch. FiveThirtyEight. I find baseball to be the most boring sport to watch but the most fun to read about.
Harsher Punishments Lead To More Suspensions For Black Kids. Futurity.
What Senator Hawley Gets Wrong about American Identity. CATO. Probably a good time to point out that I think more Democrats and left-leaning people should read CATO stuff.
Toddlers Can’t Truly Answer “This or That” Questions. Futurity. Although don’t think recency bias goes away fully as we grow up!’
I don’t think anything newsworthy happened at the Mueller hearing, but if you haven’t yet, please read the 6 or 7 page executive summaries in the actual, public Mueller report here. If nothing else, it will allow you to smugly ask your fancy dinner party friends if they’ve actually read the Mueller report.

July 19, 2019

Financial Articles I’m Reading This Week – 19 July 2019

How U.S. Tech Companies are Helping Build China’s Surveillance State. The Intercept.
How Iran Sees Its Standoff With the United States. Foreign Affairs.
New Inequality Numbers Are a Gift to Campaign Sloganeers. Bloomberg.
Dollar under pressure after Fed fuels bets on large rate cut. Reuters.

July 17, 2019

Should You Go for an MBA?

Last month I took a look at a question with some relevance to me personally: should I buy a new car? In a similar vein, this week I’d like to take a look at a question that a lot of my peers are currently facing, and one that I faced myself a few years ago. That is, I’d like to take a look at whether going back to school to get an MBA is worth it or not.

This is an example of a cost-benefit analysis. Cost-benefit analyses can aid our decision-making in a lot of situations. They can be used to figure out:

which R&D project a company should devote resources to
what price to buy a factory for
whether you should make an investment in your own education

The basic idea behind a cost-benefit analysis to see if an MBA is worth it is 1) measure the total costs of getting an MBA, 2) define a baseline against which we will measure the “MBA bump”, 3) measure how much we can beat this baseline by, by getting an MBA, and 4) somehow account for the timing of these costs and benefits.