Monday, August 23, 2010

A Bet with the Father-In-Law

My F.I.L. thinks the midterm elections will resolve the current uncertainty in the market and therefore by December will have broken out of our current trend. His theory is that the R's pick up enough seats to cause gridlock and that gridlock will resolve the uncertainty. No uncertainty will give businesses enough faith to start investing, hiring, etc., etc. And therefore things will get better.

I agree that gridlock is the most likely outcome at this point on the midterms, but that the gridlock will cause the economy to stall. So I'm betting we're below trend come December. The kicker for me is Christmas hiring and sales - I think they're both going to be off and that this is going to drive things down. I'm in the camp that we need about another $500B in non-military stimulus to get things going again, but we won't get that with any sign of gridlock in Congress.

Between now and the end of the year, hiring, consumer confidence, housing, etc. aren't going to improve in any meaningful way, and I think that's going to create negative feedback throughout the economy. Obama's already too late to turn the midterms around significantly (I think), however I don't think the R's are going to pick up as many seats as they thought 3-4 months again.

We didn't put any money on this, but simply being right and being able to rub it in for the next 20 years is where the real action is.

Friday, July 30, 2010

And now I'm a Candidate for Level 2

I passed Level 1 of the CFA exam. Apparently hard work does pay off, at least in this instance. Or luck, its hard to separate the two sometimes methinks.

Of course, all passing Level 1 gets me is the opportunity to study for Level 2 for the next 10 months. My informal survey of my prep course classmates revealed a 50% pass rate (5 out of 10), which is only slightly better than the 43% pass rate overall. Did the class help? It certainly was nice to have software to do problems as well as being "forced" to go to class once a week.

And I need to double check my Ethics & Standards to ensure I'm referring to my status as a Level 2 Candidate correctly.

Monday, July 5, 2010

Too Many Lawyers

There have been quite a few stories lately about how recent law school grads can't find a job - isn't this just (over) supply and (lack of) demand? Shouldn't that mean the price for a lawyer should drop? We'll see how that works out.

One of the more interesting solutions has been grade inflation at law schools. At what point do you admit defeat? What kind of world would we live if people said,"You know, I'm not sure what I'm going to do with my life, so I'm going to get a master's in engineering." I'm pretty sure a bunch of inexperienced, arrogant 26 year-olds with engineering degrees is going to make for at least a marginally better world than the same group with law degrees. The engineers could just make a bunch of pointlessly over-designed products that no one would ever purchase instead of filing frivolous lawsuits.

Monday, June 21, 2010

The Dunning–Kruger effect

I really should have gone into cognitive psychology. Sadly 20 years ago I didn't think there'd be much of a future for someone who wanted to put people into mazes like rats. I was a fan of Stanley Milgram's in high school. If only I'd know the Dunning-Kruger effect could have been named after me. However in retrospect that might not be the best idea...

Wikipedia on D-K

NY Times/Errol Morris

This effect explains many former managers and at least two entire organizations that I've worked for.

Monday, May 17, 2010

Why we're doomed as a species, Part 1

Check out these illusions:

Sci Am Illusions

The checker box effect (the first illusion) is very hard to disprove to someone.

Cognitive Biases

Just tracking so I know where this is when I need it:

Cognitive Bias Flash Cards

Tuesday, May 11, 2010

Those damn kids

Here's a revealing article about motivating Gen Xers (myself included) and Gen Yers:

I think its telling that there are 3 general things for the Xers, and 9 for the Yers. One theory that would be interesting to follow: The Gen Yers are never going to "be in charge." The Gen Xers, once in power, will stay there longer than their predecessors, and the Gen Yers will simply be skipped.

Go read the article. The summary is "Gen Xers have to understand what choices are possible, Gen Yers are basically children."

And stay off my lawn!

Sunday, May 9, 2010

Still Studying...

I'm still studying for the CFA Level 1. I have to say I've a lot of effort into this, and one way or the other I've learned quite a bit. Hopefully I will pass, then of course I get to start studying for the next round, then the next test after that.

At some point by the time I'm ready to retire I'm sure I'll have passed all three levels. Although I suppose this is an Ethics & Standards violation - someone who is still studying should never estimate when they are going to finish.