There are some people on this planet that are just so smart or just so uniquely good at their jobs that they are irreplaceable. They seem to have the ability to see what others miss. They get more out of the assets at hand or are able to inspire others to rise above mediocrity. Einstein, a commanding officer I once served under while in the Navy and my high school math teacher all come to mind.
Wall Street money managers don't fall into this category.
If you look at the skill set it takes to manage money, you will find excellent sales skills and a solid background in 9th grade math.
They are not rocket scientists.
Wall Street insiders pay each other hundreds of millions in bonuses claiming it is necessary to retain their top talent.
Just what top talent are they referring to? Could it be the same talent that brought us to the brink to begin with?
Let's face it, Everything a money manager does can be accomplished with an Excel spreadsheet; not counting the requisite coefficient of greed.
There are three basic ways to make investment decisions.
First of all, and the most common, is to guess.
The second is to cheat. Insider trading and nearly everything Wall Street did leading up to the collapse falls into this category.
The third is to do your homework. Look at all of the publicly available information and then make your decision. In the end, this is little better than guessing.
But wait! Aren't the experts, the top talent able to find thing others cannot? The simple answer is NO. they use basic math. They use the same software you can buy online and in the end, they guess.
If there was a secret to winning on Wall Street, everyone would be doing it and the value of the secret would be lost. The Top Talent has less skills than the average high school math geek. They can be replaced.
I recommend a new book by Michael Lewis. It is called THE BIG SHORT: Inside the Doomsday Machine. He was on 60 minutes last night. This guy was there. He did the money market stuff and was amazed that as a 24 year old (he is 50 now) they would give him six figure bonuses for doing nothing special.
Here is what our future holds. Wall Street is unsustainably corrupt. We should fix it but we won't. Why not? There are several reasons, the biggest being that our politicians are either (a) just as corrupt or (b) cowards.
Wall Street will make more of themselves millionaires right up to the point where we are in a worse position than we are now. When that happens, out economy will either irretrievably collapse or, by some miracle, someone in power will stand up and point an accusing finger at our financial institutions and shout for all to hear, "The King has no clothes."
Monday, March 15, 2010
Sunday, March 14, 2010
How I would fix education
I am not an educator so please take note of my position in the Cheap Seats.
The first thing I would do is change from paper text books to eReaders. We can pay over a hundred dollars per book. Why do that when you can buy a licensed copy for virtually nothing. Get a math guy to write the perfect algebra book. Pay him something huge, like $500,000 for the rights to it. Then forever more, every student in the United States will have free access to an electronic copy of that book. Algebra doesn't change. Many of the English books that students read are currently free online. History books can be kept current. Every book they will ever need is neatly stored in a single eReader that cost a couple of hundred dollars. A wireless system like the one Kindle uses can download assignments and such as well. No more tens of thousands of dollars each year for books. No more heavy backpacks or "I left my books at school or home." If its on the eReader, its online as well.
The second thing I would do is incorporate some sort of gaming activity in learning. How can we not be paying attention to how the minds of our kids get wrapped around gaming. I am certain that my 16 year old son could learn a foreign language in a week if he thought it would get him a trophy or an achievement online. There is something about the way the games get into the children's heads that motivates them to learn. They go home and play 21st century games after a day of 17th century schooling.
The third thing I would do is add to after school activities. More sports. More plays. More community service. Idle kids are kids open to less than optimal activity paths.
The fourth thing I would do is teach societal and introspective material. Why not teach the 12 steps of a recovery program? Why not teach yoga?
Finally, I would make school last year round with several smaller breaks. High schools would start and end 2 hours later (in accordance with overwhelming evidence about circadian cycles).
My goal would be to make out educational system number one in the world. No more Top 50.
The first thing I would do is change from paper text books to eReaders. We can pay over a hundred dollars per book. Why do that when you can buy a licensed copy for virtually nothing. Get a math guy to write the perfect algebra book. Pay him something huge, like $500,000 for the rights to it. Then forever more, every student in the United States will have free access to an electronic copy of that book. Algebra doesn't change. Many of the English books that students read are currently free online. History books can be kept current. Every book they will ever need is neatly stored in a single eReader that cost a couple of hundred dollars. A wireless system like the one Kindle uses can download assignments and such as well. No more tens of thousands of dollars each year for books. No more heavy backpacks or "I left my books at school or home." If its on the eReader, its online as well.
The second thing I would do is incorporate some sort of gaming activity in learning. How can we not be paying attention to how the minds of our kids get wrapped around gaming. I am certain that my 16 year old son could learn a foreign language in a week if he thought it would get him a trophy or an achievement online. There is something about the way the games get into the children's heads that motivates them to learn. They go home and play 21st century games after a day of 17th century schooling.
The third thing I would do is add to after school activities. More sports. More plays. More community service. Idle kids are kids open to less than optimal activity paths.
The fourth thing I would do is teach societal and introspective material. Why not teach the 12 steps of a recovery program? Why not teach yoga?
Finally, I would make school last year round with several smaller breaks. High schools would start and end 2 hours later (in accordance with overwhelming evidence about circadian cycles).
My goal would be to make out educational system number one in the world. No more Top 50.
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