Source: Ray Boshara, Federal Reserve Bank of St. Louis, “The Future of Building Wealth: Can Financial Capability Overcome Demographic Destiny?” When it comes to building wealth, personal ability matters — but so does luck. That’s something Warren Buffett always has acknowledged in his quips about winning “the ovarian lottery” — his way of saying he […]
Julie Won
The 2-Minute Thought: Hard Times for Korea’s Young and Old
Bloomberg South Korea’s population is aging rapidly. In 1980, in the midst of the “Asian miracle,” the average age in Korea was 26. Now it is 40. Low birth rates and long average life expectancies mean that by 2040, a third of the population will be over 65. That’s a lot of senior citizens to […]
The 2-Minute Thought: When the Wisdom of Crowds Doesn’t Work
The wisdom of crowds is the idea that the judgment of a large group of people can be better than that of any individual. If you ask a large enough group of people to guess how many jelly beans are in a jar, the average answer will be remarkably accurate and better than most […]
The 2-Minute Thought: Stock Market Valuation –Where Are We?
Had you blinked year to date and just opened your eyes, you could think that stocks moved very little in 2016– U.S. stocks are almost even with where they started the year. But that would be glossing over the worst-ever start to the year for U.S. stocks and weeks of blind panic around the world. […]
The 2-Minute Thought: In Defense of Optimism
Investors need to be optimists. They need to believe that change is possible and that change is sometimes for the better. Without optimism, taking risk would be impossible. But in investment and life, it is easy for pessimism to prevail. For one thing, pessimism can sound a lot smarter than optimism. Morgan Housel muses about […]
Reasons for Optimism
There are two interlinked stories here. One is about the rise of economic dynamism in smaller U.S. cities like Duluth, Sioux Falls, and Akron. The other is about the fall of globalization. Perhaps calling it “the fall of globalization” is a little dramatic, but global trade in goods is definitely down. Growth in the global […]
The 2-Minute Thought: Brazilian stocks rally? What?!?
Source: stockcharts.com Has the world gone crazy or are Brazilian stocks really rallying? It seems like it was just a moment ago that investors didn’t want to hear about Brazil, think about it, or certainly, touch it. The economy is terrible. The president’s facing impeachment. And the ex-president just was implicated in the Petrobras corruption […]
The 2-Minute Thought: Why laundromats in Japan are booming
japanupdate.com “Anyone wondering what a decade of deflation, rising female labour participation, falling marriage rates and soaring pollen counts can do to a nation could study Japan’s self-service launderettes boom.” So riffed the Financial Times poetically last fall. In most of the developed world, self-service laundries have been declining – which makes sense in a […]
The 2-Minute Thought: The wrong way to think about money
The right way to think about money is to focus on opportunity costs. That’s how Duke University behavioral economist Dan Ariely opened an interview late last year. That means that we should think clearly about all the possible alternatives we are giving up as a result of spending money on something. Of course that is […]
The Changing Face of Shopping
Traditional retail from high end to low is struggling. That includes department stores, single brand outposts, outlets, big boxes, and malls. Spending on traditional categories like apparel is down. The proliferation of online buying options means it’s harder to figure out how bricks and mortar should work. Observers always pay attention to changing consumer demand […]
The 2-Minute Thought: On National Identity
Image source: Wikipedia What makes a German identify with being European as well? Why did Corsican separatists lose their passion for independence from France after European Union? Do the youths of South Korea identify more with being citizens of South Korea than they do with being ethnic Koreans (in North or South Korea)? For their […]
The 2-Minute Thought: Is It Time To Buy Bank Stocks?
Source: Marketwatch It’s hard to be a bank. It has been since the financial crisis. It was really hard in 2008-09; it was hard in 2011 when people thought Europe was coming undone; it’s hard now too. Year to date, the KBW Bank Index (blue line in above chart) is vastly underperforming the broad market […]
