Posts filed under “Mathematics”

Long Term Growth in US Labor Force

Despite my association with the Bear camp, and my belief that we are most likely in a long term secular bear market, I actually am an optimistic guy.

The future is never as dire looking as the survivalists make it out to be. Even though I know the cyclical bull rally within the longer bear will eventually end with a significant correction of ~25%, I have been playing this on the long side. That’s optimism!

I lived through the 1970s — an era of sky high interest rates, ugly cars, polyester and disco — so I now how bad life can get in the USA.

My motto: Hope for the best, but be prepared for the worst.

With that thought in mind, let’s have a look at a long term chart that is actually encouraging. It comes from the book “The Next Hundred Million: America in 2050.” Many people are surprised to learn that America “boasts the highest fertility rate: 50 percent higher than Russia, Germany or Japan, and well above that of China, Italy, Singapore, Korea and virtually all of eastern Europe.”

In terms of economic development, this demographic factor provides a long term advantage — think of the financial bulge of the Baby Boomers (while ignoring everything else they screwed up).

That leaves us with this chart, which has potenetially long term, positive connotations:

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Labor Force Growth (growth in age 15-64)


Chart courtesy of Joel Kotkin

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Hat tip Kevin!

Category: Economy, Mathematics

Vanguard’s Broken Discipline: The Buy & Hold Model

Yesterday, my buddy Paul showed this Vanguard interactive chart. Vanguard was trying to show the superiority of Buy & Hold versus “emotional investing.”  I have many issues with their argument. First, I have to challenge the use of that term — emotional investing — to describe what is a fixed mathematical exit and entry strategy….Read More

Category: Mathematics, Quantitative, Technical Analysis

Why a Consumer Protection Agency Is Necessary

What a splendid idea: A Consumer Finance Protection Agency whose sole purpose is to provide a set of standards for the finance industry when it comes to marketing their products to otherwise naive US consumers. The original plan was to have a standard form for major finance purchases — mortgages, cars, revolving credit. This would…Read More

Category: Bailouts, Credit, Mathematics, Regulation

What Were the Actual Losses in Madoff’s Fraud?

Here is a deceptively complex and subtle legal question involving Ponzi schemes and fraud: What are “losses” in the legal sense of the word? The question arises in the case of Bernie Madoff, whose offices cranked out account statements like they were junk mail. As it turns out after the fact, that was all they…Read More

Category: Legal, Mathematics, Psychology

More WSJ Errors: This Time, Its Math

Last week, we discussed a highly politicized, misleading front page article about new bank rules (WSJ Jumps the Shark). If you recall, that story included a large chart showing much various banks declined, in dollar and percentage terms. Turns out the data was wildly wrong. The Journal ran a milquetoast correction, under the heading “Corrections…Read More

Category: Financial Press, Mathematics

How Many Quants Does It Take to Screw in a Lightbulb?

Matthew Greenfield of StoneWork Capital answers the above question thusly: “Using ten racks of co-located blade servers, one quant can detect a janitorial inefficiency, step in between janitor and light fixture, and screw in 49,500 bulbs in less than a millisecond, keeping five hundred lightbulbs of profit. Two quants competing with each other can screw…Read More

Category: Humor, Mathematics, Weekend

Help Wanted: Quant for Model Development

A successful fund manager friend is developing a new Model for running assets. He has a solid math background, but needs a good quant to help him develop and refine his approach. He is looking for two people — a college grad/student, and a PHD mathematician. They run a variety of different types of long…Read More

Category: Mathematics

Statistics: Scientific Consensus on Climate Change?

One of the memes I’ve heard recently in the climate debate is that there is no scientific consensus — that there is actually strong disagreement. The main basis of this argument is that 31,486 dissenting scientists have signed a petition against the belief that Global Warming is man made at the PetitionProject.org. I don’t want…Read More

Category: Mathematics, Really, really bad calls, Science

Fox News (Chicago) Makes the Best. Pie Chart. Ever.

Fair & Balanced? Not exactly. Mathematically competent? Not one tiny bit. > Hat tip Flowing Data ~~~ Update: Here is the Video (Nov 23)

Category: Financial Press, Mathematics, Politics, Really, really bad calls, Television

Site of the Day: Innumeracy.com

> Some good learnin’ here: This web site stems from a personal interest in critical thinking and is a collection of links to articles and sites pertaining to numeracy and critical thinking. Links should be good for at least the date posted. After the posting date, link reliability depends on the policy of the linked…Read More

Category: Mathematics, Really, really bad calls