Wednesday, February 29, 2012

Why I'm Voting For Rick Santorum

As Super Tuesday approaches, I hope to convince you all to vote for Rick Santorum in your respective primaries. There are a number of great reasons to support him, but personally, I'm voting for Rick Santorum because I enjoy raping women.

On January 20, 2012, Rick Santorum had a sit-down interview with Piers Morgan where he, in no uncertain terms, stated that rape babies are "a gift from God," and what kind of Christian would I be if I didn't try to share God's gifts?

This was my "You had me at 'Hello'" moment. Senator Santorum is the only candidate in this election, Republican or Democrat, who shares my pro-rape views. In Genesis 9:1, God tells Noah and his sons to "Be fruitful and multiply and fill the earth." Since Bible verses should be taken literally, what better way to fulfill the word of God than to rape as many women as possible and multiply my fruit?

The more detail-oriented of you may quibble with my implication that rape will result in offspring, but again you overlook the obvious fact that I would never use contraception. Here, too, Rick Santorum agrees fully with my pro-rape views. Even as far back as 2006, Rick Santorum asserted that contraception is harmful to women.

If you take just a moment to reconsider your vote, I think you'll find that Rick Santorum is the right candidate. With Rick Santorum in the White House, you and I and everyone will know that, when we're raping women left and right, we'll have the President behind us. Remember, a vote for Rick is a vote for rape babies!

Thursday, February 23, 2012

Conversations About Health Insurance

The following conversation took place between American college students in Virginia and Georgia, both employed full-time.

"Ugh, my leg still hurts from when I hurt it somehow on Sunday, but if I go to the student health center, I'll get a diagnosis of "I don't have now have lortabs" and or "babies."

"What did you do on Sunday?"

"Went sledding. I didn't think I did anything but ever since Monday morning, my leg has been hurting like a bitch."

"Btw, what does 'babies' mean?"

"The health center's default diagnosis if you're female (or even male, in my friends case) is that you're pregnant."

"Ah right. Well, can't the health center refer you to an orthopedic specialist?"

"Hahahaha they probably don't even know what 'orthopedic' means."

"Then go see a specialist on your own?"



"I have some, but my orthopedic dude is four hours away and has to schedule appointments three months in advance."


Another conversation between full-time employed American college students, one in Georgia and the other in California.

"I broke my foot a little over a year ago and ever since then, wearing normal shoes hurts my foot."

"Did you rehab the foot properly?"

"I don't have health insurance. (No)"

"If only the Republicans weren't such demagoguing assholes. Oh noes a public option will result in the communist downfall of America!"

"I tried to get Medicaid and they literally told me I didn't qualify because I didn't have a child. So apparently I have to get knocked up to have healthcare. But at the same time people will bitch about the poor having kids they can't afford!"

"I had a similar experience last year when I developed gastrointestinal bleeding. I went to the student health center but they didn't see any hemorrhoids near the surface, so they referred me to a specialist. The bleeding stopped shortly after, so I didn't end up going because my health insurance sucks, but the bleeding has come back periodically since then."


There's a reasonable debate to be had about fiscal and regulatory policies, but can we at least agree that decent, affordable health care shouldn't be a luxury like a Rolex?

For another perspective, NPR recently did a story looking at substandard health care for employed adults.

Tuesday, February 21, 2012

How Much To Teach

As a Ph.D. student at a public university, I am obligated to teach. Many seem to assume this just means TA responsibilities, but I'm actually the instructor of record for a class of 50: I choose the material to be covered, and I alone assign those oh-so-important grades. This semester, as with last spring, I am teaching financial management, the core finance course that must be taken by all business undergrads.

The course is supposed to be an introduction to both investments and corporate finance. I work primarily in empirical asset pricing, so naturally I like to dig deeper on the investments topics. Friday marked the end of the chapters on the most important investments material we will cover, culminating with an explanation of the Capital Asset Pricing Model (CAPM) and sample applications. What we did not cover, however, was a rigorous explanation of where CAPM comes from and how to derive it.

To be fair, no sophomore-level introduction to finance course would cover the derivation of CAPM. (Of course, I am talking about the derivation that follows from William Sharpe's 1964 Journal of Finance paper, "Capital asset prices: A theory of market equilibrium under conditions of risk", not the stochastic discount factor-based derivation taught in finance PhD programs) At my school, the relevant course is the aptly-titled "Investments" (which incidentally I will be teaching next year). So, if students are going to learn how to derive CAPM in investments, what's the big deal? For one, most of my students won't take investments, but there's a larger pedagogical question at hand.

The lecture ended about 20 minutes early; I had finished covering the material that would be on the students' next test. Part of me wishes I had spent that 20 minutes giving the students a crash course in CAPM derivation, but realistically, it just would have been a jumbled mess. Even a rudimentary explanation of Sharpe requires an understanding of the efficient frontiers from Harry Markowitz's 1952 Journal of Finance paper, "Portfolio selection." Alas, students do not (need to?) see efficient frontiers in the core course.

(As a sidenote, both Markowitz and Sharpe are Nobel Laureates, based in part on the work in those papers)

Of course, I could have structured things to leave a full class session for Sharpe and CAPM, but I could not reasonably test them on the material since, as mentioned, it's really the domain of the investments elective, and for those who miss the class, it's certainly not in the textbook. What, then, is the point of losing an entire class session in the name of "education" when the majority of my students aren't even finance majors?

There's a very small chance that some undeclared business students might be moved by the elegance of CAPM and decide to declare as a finance major; there's also a very small chance that I'll win the lottery. Then again, maybe that's not the proper metric of success as a teacher. Trying to inspire all my students may not necessary (or even desirable) if I can inspire just one who goes on to do great things; for everyone else, perhaps it is sufficient that I simply prepare them for their first job out of college.

For what it's worth, yesterday the students took the aforementioned test, and they performed very well on the CAPM section.

Friday, February 17, 2012

Financial Media Coverage

CNBC is an interesting animal. Many praise its coverage of market events and interview exclusives while just as many criticize its sensationalism of market movements and oversimplification of investing. Something I think almost all investors and traders could find useful is Fast Money, a daily digest of market developments and analysis from industry professionals. Despite its name, the show is not some wasteland of stock tips and get-rich-quick schemes, despite what Jon Stewart may believe.

Wednesday's price action in Apple (and the market as a whole) was certainly worth the attention given on Fast Money: everyone agreed that Apple's morning move from $509 to $526 followed by a close at the daily low of $497, all on five times normal volume, signaled an important reversal and intermediate price top, and that while you shouldn't necessarily get short of the stock, long positions should be lightened.

What happened yesterday with Apple, however, received hardly any attention at all. The panelists spent less than one minute discussing what today's gap lower open, followed by stabilization, followed by a close near the daily high meant for the price reversal thesis.

Those unfamiliar with the show might attribute the producers' decision to self-preservation - they don't want to look bad. However, the show has a segment specifically for revisiting bad calls made previously by the panelists called "Fast Fire." And really, did you actually expect coyness from a show entitled "Fast Money"? That the price action caught the producers off-guard isn't an entirely meritless argument, but I'd say the chart below offers strong counter-evidence:

No, there really doesn't seem to be a good reason for what happened on yesterday's show. It bothers me, not just because I'm a fan, not just because I'm an Apple shareholder, but primarily because there are people who watch the show who also control vast sums of investment capital.

We should all think critically about the financial information we consume. We know that investors have home bias for stocks to the detriment of their portfolio returns, and that's partly driven by media consumption vis-a-vis frequency of exposure. Consideration of content presentation will make you not only a more conscientious investor but also a more successful one.

Wednesday, February 15, 2012


We the People of the United States This blog is a public forum where I will talk about finance and other very important things. I hope you'll find this blog compelling and entertaining and worth visiting on a regular basis adding to your RSS feed.