Howard Davies was Director of the London School of Economics (2003-11), so you would think he understands economics. Instead, he writes a lame criticism of a caricature of economics. In the process, he notes: Robert May, an eminent climate change expert, has argued that techniques from his discipline may help explain financial-market developments. Epidemiologists have suggested that the study of how infectious diseases are propagated may illuminate the unusual patterns of financial contagion...

There are two types of bad trades.  The first is the mode-mean trade where the mode is positive the mean zero or negative.  One shouldn't make this kind of investment, because at best it simply adds noise to one's portfolio.  The net return to the passive investor can be especially negative because often they mistakenly overpay for management, not anticipating the drawdown, and the agent does not payback old profits when this is all revealed. Such trades are common in...

A guy figured out an interesting market niche: book reviews.In the fall of 2010, Mr. Rutherford started a Web site, GettingBookReviews.com. At first, he advertised that he would review a book for $99. But some clients wanted a chorus proclaiming their excellence. So, for $499, Mr. Rutherford would do 20 online reviews. A few people needed a whole orchestra. For $999, he would do 50. There were immediate complaints in online forums that the service was violating the sacred arm’s-length...

I'm enjoying Anthony Eveeritt's The Rise of Rome, and he notes that around 500 B.C. the Roman King Tarquin sent his sons to consult the oracle at Delphi for some insight. At the Temple of Apollo there were written three maxims:Know yourself Nothing in excess Offer a guarantee and disaster threatens  Now, the first is rather profound, because it highlights that it's very important to tailor one's actions around one's comparative advantages. The second is the famous 'golden...

So, my book was finalized, and appeared on the Amazon site on Friday. I'm self-publishing, so once approved, I order a bunch of copies at cost that same day, and also ordered one via Amazon to see if it 'worked'. Interestingly, by Monday there were 'New' copies available at Amazon via independent booksellers for $1 less than the new price. But, they couldn't have any copies given to them by the publisher, because that's me. I have no idea how they got the books they were selling unless...

A nice thought is that learning something like Latin, Western Civilization, or chess, generates insights one can generalize to many things later in life. Many like to think that solving logical puzzles can help the elderly stave off dementia. Unfortunately, it's hard to find evidence that this works. Bryan Caplan notes that "learning is highly specific." That is, if you want to become a programmer, or derivatives, don't waste your time on Classics, rather, get a job in programming or...

Here's the beginning to my book, The Missing Risk Premium:MRP preface.

It's called The Missing Risk Premium: Why Low Volatility Investing Works. It's available at Amazon for $14.95. A Kindle version is going to be ready in about 2 weeks that will be a little cheaper.  It would be a great complement to a Corporate Finance course, and should be of interest to anyone interested in the truth on something very fundamental: what do people maximize? I get into the why because people see what they believe, and if they understand low volatility's edge they might...

Over at Cafe Hayek, Don Boudreaux notes this snippet from our President: Some of you may be cynical and fed up with politics. A lot of you may be disappointed and even angry with your leaders. You have every right to be. But despite all of this, I ask of you what has been asked of Americans throughout our history. I ask you to believe. That one could say this in good faith reflects a profound mysticism sharply at odds with the otherwise anti-religious nature of the left.

I saw a link to a Wall-Street sex scandal, and it seemed more like a case of a disappointed spurned woman than any scandal. I don't think people's bed or bathroom behaviors are of relevance to their arguments about finance or anything else, unless we are their lovers. But if I do make the tabloids someday, I hope I look as good as this guy (53).