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Gold and market efficiency
The price of gold is falling. Everyone seems surprised. John Paulson is selling his fancy house in Aspen. I don’t get it. Or maybe I do. I’ve been on record for a long time saying that gold was overvalued. And for a long time, the price kept going up. Was I wrong? Am I right? [...]
Why is John Paulson’s performance a surprise?
I often quote Po’s line from the movie “Kung Fu Panda”: There is no secret ingredient. Every time there’s a major market crash, there’s someone out there who called it coming and ended up making a fortune. And inevitably, that person never duplicates the feat. In the 1987 crash, it was Elaine Gazarelli. She called [...]
Felix Salmon, Thomas Friedman, and 401(k) plans
Last week, Thomas Friedman wrote a breathy column for the New York Times about how it’s a 401(k) world. The idea being that just as we have responsibility for our own retirement funds – which is good for some people – we have responsibility for more of our careers – which is also good for [...]
Money Smart Week: Just save already, darn it
Money Smart Week has come to an end. The goal is great: to get people handling their money more responsibly. After all, money represents hours of work, and you should use your time for things you want and need. The key to financial security is to live on less money than you make, then get [...]
Money Smart Week: Money, careers, and literature
This semester, I’m teaching a class at UIC on business, finance, and American culture. It’s a lot of fun to teach, and (I think) the students get a lot out of it. The class has started making their final presentations, and the first batch was really good. Three of the books assigned are The Jungle, [...]
Money Smart Week: Cash flow versus return
I know about finance from several perspectives. I have a traditional academic background and teach traditional corporate finance (efficient markets, rational actors, time value of money). I worked for an investment company and two investment bank, so I have a real-world perspective (people are irrational, bubbles and crises are more common that you might think.) [...]
Money Smart Week: The value of fixing things
Recently, a hole wore in the sole of one of my favorite pair of shoes. The shoes weren’t terribly expensive, and I almost threw them out. But then it occurred to me: the shoes were comfortable and they filled a need in my wardrobe (which is why they wore out). Even if a new pair [...]
