My neighborhood is overrun with deer these days. It is not uncommon for me to come home and find extended deer families “chilling” in my front or back yard. A friend sent me this photograph of such a family enjoying the shade under her children’s trampoline. I can’t help but wonder whether trampoline manufacturers take the risk of deer antlers into consideration in the design of their products!
Greenland – The Big Picture – Boston.com
Posted using ShareThis
From http://www.heraldleaderphoto.com/2008/05/31/:
“Adam Bender, 8, is one of several kids who plays catcher in Southeastern’s rookie league at Veterans Park. What makes Adam stand out is that he plays one of the toughest positions on the field with only one leg. Because of cancer, he had his left leg amputated when he was one. Adam doesn’t use a prosthesis, and only uses crutches when he reaches base for the Astros.”
I was recently asked by some of my students to provide a list of books and readings which I think that they ought to consider reading outside of class. I highly recommend the following set of books in particular:
1. Against the Gods: The Remarkable Story of Risk, by Peter L. Bernstein.
2. A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing, Ninth Edition, by Burton G. Malkiel.
3. Stocks for the Long Run : The Definitive Guide to Financial Market Returns and Long-Term Investment Strategies, by Jeremy J. Siegel.
Philosophically, these books present what I would consider to be an “orthodox” view of finance, risk management, and economics; i.e., they fit well with the so-called rational choice, efficient markets view of the world.
For some heterodox alternatives, I like both of Nassim Taleb’s books:
4. Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets (read this first).
5. The Black Swan: The Impact of the Highly Improbable (the sequel to “Fooled by Randomness”).
Unfortunately, I can’t recommend any books on the topics of behavioral economics or behavioral finance; the books I know of tend to be either too advanced or too superficial for most readers. However, I do recommend the article entitled “Aspects of Investor Psychology” by Daniel Kahneman and Mark Riepe which appeared several years ago in the Journal of Portfolio Management.
Finally, I would be remiss to not also include two other favorites which are not books on finance or economics; rather they deal with the history and philosophy of applied mathematics. These books include:
6. Innumeracy: Mathematical Illiteracy and Its Consequences, by John Allen Paulos.
7. A Brief History of Infinity, by Brian Clegg.
I have no idea who actually publishes the “Baylorproud” blog, but it was pointed out to me (by my son Chad Garven, BFA 2005) that I was “featured” on their site yesterday; see “Honored down under”. I am quite proud of Baylorproud! :-)…
Usually when I open the Wall Street Journal in the morning, I don’t expect to have an emotionally moving experience. This morning was different as I read Jeff Zaslow’s article entitled “A Beloved Professor Delivers The Lecture of a Lifetime”. I then went to the online version of the Wall Street Journal and found a related article by Jeff Zaslow entitled “The Professor’s Manifesto: What it Meant to Readers”. Both articles tell the story of Dr. Randy Pausch, a Carnegie Mellon University computer science professor who has pancreatic cancer and expects to live for just a few months. Just one week ago, Dr. Pausch gave what was billed as his “last lecture.”
Here are the (less than 5 minute) video versions of both articles:
A Beloved Professor Delivers The Lecture of a Lifetime
The Professor’s Manifesto: What it Meant to Readers
The full (1 hour, 25 minute) video of Dr. Pausch’s “last lecture” is available in Windows Media Player format from Carnegie Mellon University and also on Google Video.
For what it’s worth, I am featured in an article which was published this past week on the Baylor business school’s website entitled “Baylor Professor Lectures in Prestigious Australian Master Class Program”. The direct link to the article is http://www.baylor.edu/business/index.php?id=49937.
The Wall Street Journal article entitled “The Risk Business” provides an excellent explanation concerning the impact of financial innovation on risk premiums in the global financial markets. The article asks why, in an undeniably dangerous world, risk premiums seem to have drained out of whole classes of financial assets. The answer is that financial innovation (in all its various forms, including the buying, selling, swapping, trading and securitization of risk) has actually made the financial markets much safer for investors by facilitating optimal risk sharing; consequently risk premiums have fallen substantially over time. This is good news, since with better risk sharing gives rise to a more robust and resilient global economy over time.
Richard Posner has a very interesting post concerning the effects of asymmetric personal taxation on the distribution of income. Specifically, he argues on the basis of Jensen’s inequality that high marginal personal tax rates discourage risk-taking; it therefore follows that if marginal personal tax rates are reduced (as has been the case over the past several years), such a policy encourages risk-taking by removing some of this asymmetry. In my business risk management course at Baylor University, I make a similar argument concerning how asymmetric corporate taxation creates incentives for firms to hedge risk and in some cases avoid risk altogether. Greg Mankiw also has some interesting points to make concerning Posner’s perspectives on this topic.