According to Bill Gates, this year’s (50th annual) letter to Berkshire Hathaway shareholders from Warren Buffett is “… the best letter Warren has ever written”.
Here’s the letter: http://berkshirehathaway.com/letters/2014ltr.pdf.
Here’s Bill Gates from his video blog:
In his January 2, 2015 Wall Street Journal essay, columnist Holman Jenkins makes a compelling case for the principle of shareholder value maximization by noting that owners seeking to maximize the value of their businesses end up doing a pretty decent job of satisfying customer and employees along the way. Think of this essay as a 2015 sequel to Milton Friedman’s famous New York Times Magazine essay (published September 13, 1970) entitled “The Social Responsibility of Business is to Increase its Profits” (see http://bit.ly/Social_Responsibility_of_Business for Friedman’s essay; Thomas Coleman provides important context in his recent (2013) essay about Friedman entitled “Corporate Social Responsibility: Friedman’s View @ http://bfi.uchicago.edu/feature-story/corporate-social-responsibilty-friedmans-view)…
Lately, futures prices for crude oil and refined products such as gasoline and heating oil have been in a free-fall. For example, the January 2015 futures contract for “RBOB Gasoline” is trading at the equivalent of around $1.64 per gallon. As shown in the following graph, this represents a price drop of roughly 85-90 cents per gallon since September:
AAA reports that today’s national average is $2.639 and could fall to $2.50 within the next couple of weeks. Nationally, the average markup from the near term futures contract price to prices at the pump has averaged 62 cents per gallon since January 2000 (which is when AAA began tracking this information). Therefore, if futures prices hold at (or fall further from) current levels it seems quite likely that the price at the pump may be headed even lower.
This 1 hour long presentation by University of Chicago economist Matthew Gentzkow is well worth watching; Professor Gentzkow explores the implications of new media technologies for the health of American democracy.
Clearly insurance is an enabling technology; without insurance many if not most large-scale commercial activities would grind to a halt. In a Business Week article entitled “The Unexpected Threat to Super Bowl XLIX“, Wharton professors Howard Kunreuther and Erwann Michel-Kerjan point out that that if Congress decides not to renew the Terrorism Risk Insurance Act (TRIA) (set to expire on Dec. 31), there is a chance that the Super Bowl might not be played. Will Warren Buffet step in as an insurer of last resort if TRIA is not reauthorized? Also, Gordon Woo raises some excellent points about possible private sector alternatives to TRIA in his blog posting entitled “RMS and the FIFA World Cup: Insuring Against Terrorism“.
In today’s daily USPS junk mail delivery, I was deluged (as is everyone these days) by a pile of political flyers. One of the flyers in particular caught my eye – it was entitled “Common Sense MMXIV” (why the Roman numerals? But I digress).
One of the supposed “common sense” proposals listed on this flyer was to “…. enact, as Australia has, a $20/hr. minimum wage”. Since I was not aware that Australia had a $20/hr. minimum wage, I googled this topic and found that in fact Australia does not have a $20/hr. minimum wage (source: http://www.wageindicator.org/main/salary/minimum-wage/australia). What Australia does have is a 16.87AUD/hour minimum which translates (at the current exchange rate) into 14.84USD/hour (AUD and USD are acronyms respectively for “Australian Dollar” and “US Dollar”). Furthermore, there are all sorts of caveats that apply; for example, there’s a schedule of minimum wages (expressed as a percentage of the 16.87AUD/hour baseline) based upon the age of the worker:
|<16 years: 36.8%||AUD6.21||USD5.46|
|16 years: 47.3%||AUD7.98||USD7.02|
|17 years: 57.8%||AUD9.75||USD8.58|
|18 years: 68.3%||AUD11.52||USD10.13|
|19 years: 82.5%||AUD13.92||USD12.24|
|20 years: 97.7%||AUD16.48||USD14.49|
For more on the economics of the minimum wage, I recommend reading the attached article by David Neumark; Dr. Neumark is an economics professor and director of the Center for Economics and Public Policy at the University of California, Irvine.
I just had a nice visit from Cindy Riemenschneider, who is Associate Dean for Research at Baylor University’s Hankamer School of Business. She came by my class for the purpose of presenting (in front of my students) a “Certificate of Exceptional Research” for my paper with Jim Hilliard and Martin Grace entitled “Adverse Selection in Reinsurance Markets” (cf. http://bit.ly/
Here’s a shout-out to Mike Akel (director) and Felipe Adams (producer) for their web comedy series called “Mr. Ginger“. To date, Season 1 consists of four episodes, and more episodes are in the works. (Shameless self-plug alert – I appear briefly toward the end of episode 4 as someone whose job it is to help a student face his worst fear! :-))…
For the entire series to date, go to http://bit.ly/mrginger; this link provides a menu where you can select which of the four episodes that you would like to watch; you can also watch by simply clicking on the play button below. I recommend watching all four episodes!