The Dunning-Kruger effect refers to the phenomena where people of low ability have a higher self-perception of their abilities than those of high ability. This has been reproduced in laboratory sessions time after time. Human self-assessments are highly flawed. And this effect has massive social implications: confidence matters in all spheres of life, including job […]
The Dow Jones Industrial Average is composed of 30 stocks meant to "represent" the industrial health of American companies. Some of the companies included on the list are household consumables, such as McDonalds, Nike and Coca-Cola. Other sectors include technology companies such as Microsoft and Apple and financial services, including American Express, JPMorgan, Visa and Goldman […]
The proper use – and maintenance – of a checking account is one of the milestones of adult financial prowess. Checking accounts allow consumers to maintain an account and cash in and out for free, often with low minimums. Cash is available at your fingertips... and sometimes even with a little bit of interest. For […]
Much has been written about the recent run-up in stock market valuations so I do not want to rehash many of the arguments about what is driving the bull market in US stocks besides listing some of the hypotheses: Higher inflation expectations Expectation of deregulation Expectation of faster interest rate increases Continued consumer confidence Expectation […]
Along with the recent bond sell-off, financials have had a huge run-up in the month since the election, up >20% from 11/4/2016 – 12/13/2016. At first glance, these two seem intricately linked, as higher interest rates may help the earnings of financials in general. Higher interest rates, however, do not necessarily mean there will be […]
One of the lessons from the November U.S. election and the June Brexit vote is that our ability to predict future events is fraught with error, even if the underlying data is relatively sound. National polls were roughly in line with the final U.S. popular vote (with geographical differences) yet a lot of the analysis […]
Debt, in and of itself, is not necessarily a bad thing. In fact, over 80% of Americans are “in debt”. More astute readers, of course, will point out that surely a lot of this debt is good debt, providing access to assets like education or houses. Even some more questionable debt such as credit card […]
Occupational licensing occurs when a governmental authority (or sometimes a qualified third party such as a bar association) grants individuals the right to perform in some occupations. This makes a lot of sense for roles that convey a large amount of public trust, such as doctors, lawyers and financial professionals. The argument becomes a little […]
June 29th, 2006. It was an innocuous day as the stock market was booming in the post-9/11 recovery. The economy was torrid and the unemployment rate was 4.6% in the USA. That fall, I opened up my checking account with Charles Schwab with their floating-rate free checking account (with no minimums or ATM fees) was paying […]
In Part One of this series, I talked about my overall transition to San Francisco. In this entry, I'll talk about some of the stresses involved in moving and cleaning up the personal finance life along with the move. As I wrote about in a series of posts in 2013, I purchased a house in […]