Wall Street Journal: When Students Rate Teachers, Standards Drop

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The subtitle is also very telling (and relevant to untenured professors like myself):

Why do colleges tie academic careers to winning the approval of teenagers? Something is seriously amiss.

The title of this post and the above subtitle are from a recent (October 27, 2013) Wall Street Journal article.  I agree that student feedback provides information to the professor.  I also agree that academic careers should not be tied “to winning the approval” of students.  Students in my class already know that I am not trying to win a popularity or approval contest.  Approval from students is not the goal.  Attainment of perfect understanding of the material is the goal.

Yesterday a couple students stopped by my office.  One comment was that I teach as if I expect students to know the material already.  That is untrue.  I don’t expect students to know the new material presented in the course.  I do have expectations.  I expect students in a junior/senior level finance class to have already mastered algebra and basic accounting.  Business calculus and accounting are prerequisites for the courses I teach.  So, if expecting a mastery of algebra and basic accounting is “high expectations” then I am guilty.  Actually, I don’t expect it, I require it. The course requires it.  So if you are behind in either of those areas it is on you to catch up using the available resources.

I will end with another quote from the article:

One of these studies, “Academically Adrift” (2011) by sociologists Richard Arum and Josipa Roksa, suggests a couple of steps that could help remedy the problem: “high expectations for students and increased academic requirements in syllabi . . . coupled with rigorous grading standards that encourage students to spend more time studying.” [emphasis added]

In this regard I feel more a part of the solution than part of the problem.   🙂

LA Times: Think Black Friday is best day to get a deal? Think again

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Take a look at this Los Angeles Times article.  I’ll quote a little here and you can read the rest:

The weekend is crowded with misleading promotions, including deceptive discounts off misstated “original” prices and deals that could have been had a year earlier, according to NerdWallet. More than 90% of Black Friday ads this year feature items being sold at exactly the same price as they were last Black Friday, the financial advice website said.

And some door-buster prices are available throughout the year, including a $79.99 Tommy Hilfiger jacket at Macy’s that NerdWallet said was also offered during the retailer’s Veterans Day sale. At Target, researchers discovered a KitchenAid mixer selling for less than its advertised Black Friday sale price.

“Consumers make poor decisions when they’re under duress, and this is most obvious on Black Friday,” Ong said.

I added the emphasis on the KitchenAid mixer.  If I read this correctly, retailers are actually raising prices on Black Friday after suckering you into their store with “door buster” deals that a small percentage of shoppers can obtain.

Swiss voters reject proposal to limit executives’ pay | Fox Business

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Yet another example of widening wealth inequality.  One of the FAME V conference speakers, Stephane I believe, also noted widening wealth inequality as an economic problem.

Although the Swiss government can not cap executive pay stockholders apparently can via a binding vote (in Switzerland).  I am okay with that as long as the stockholders have a means to get together and have these binding votes on executive pay.  Employees of privately held corporations probably do not have stock therefore no means to vote.

Let me touch on employees as stockholders a little bit more.  Employees with defined benefit (pension) plans and defined contribution
(401k) plans are stockholders.  But, the mechanism to get the will of the masses (workers) into action does not appear to be working.  Income and wealth inequality are still growing around the world.

I can think of several reasons why the worker-owners (via retirement plan holdings) are not addressing the widening wealth gap:

1. Complacency

2. Executives, who ironically are supposed to act on the behalf of shareholders, may issue enough stock to themselves so they retain voting control. It is for this reason I will not invest in Facebook.

3. Outside investors such as wealthy individuals or hedge funds have more ownership than those working at a firm.

4. Worker-owners are unaware of their collective voting power.

5. Disinformation is used to trick worker-owners into voting in favor of wealth and income gap widening initiatives.

Item number 3 points to an interesting research idea: do firms with more employee ownership have more equitable pay?  I will end with that question to ponder.

http://www.foxbusiness.com/technology/2013/11/24/swiss-voters-reject-proposal-to-limit-executives-pay/

Why Twitter’s IPO Was Really a Failure

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An excellent Forbes article written by Hersh Shefrin.  My favorite quotes:

“No investor who bought the stock yesterday and held it to the end of the day came out ahead.”

“original shareholders leave money on the table when they set too low an offer price, because they give up more of the company to new investors than is necessary in so far as raising new funds”

So, in a sense, Facebook’s IPO brought in relatively more cash to the company than Twitter’s.  Nevertheless, as far as Twitter’s future returns: “I can’t tell you the future, I can only tell you about the history.”  For now, I continue with my “ignore” rating on the stock.  🙂

Here’s why you shouldn’t invest in Twitter

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Because I don’t use it.  Seriously, this article from the Wall Street Journal offers  several reasons.  In essence, it doesn’t meet the Warrant Buffet “Stable and Understandable” rule.  Specifically, the WSJ article states

“You don’t understand Twitter. Few people do, really.”

Proceed with caution.

Why one woman is eager to buy Twitter shares

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Why?  Because she missed out on Apple and Facebook.  Yep, that’s it.  Here is the article:  http://stream.wsj.com/story/markets/SS-2-5/SS-2-374835/

Now, this sounds similar to the old saying “when the shoeshine boy gives you stock tips get out of the market.”  Why?  At that point everyone who has money to put in the market has already put it in the market.  Thus, no more upside.  Here is a 1996 article on that subject:

http://money.cnn.com/magazines/fortune/fortune_archive/1996/04/15/211503/

And a 2012 article:

http://money.cnn.com/magazines/fortune/fortune_archive/1996/04/15/211503/

What do I think?  In the long run, fundamentals matter.  In the long run, companies must earn a profit, they must make more profit with less operating assets, they must have a business model, they must be a market leader, etc. in order to have favorable risk adjusted returns.  In the short run, have fun trading with the changing moods and measurements of “the market.”

Apple Opening Arizona Plant With 2,000 Workers

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This past weekend I attended the Financial Asset Management V conference in San Francisco, CA.  One of the panelists cited re-shoring of jobs as a positive he sees in the economy.  Add Apple to the list for [finally] bringing some jobs back here to the U.S.A.  Let’s hope this practice continues.

The article:

http://www.bloomberg.com/news/2013-11-04/apple-to-build-plant-in-arizona-with-2-000-workers-to-make-parts.html

More high balance adjustable rate mortgage activity: haven’t we learned our lesson?

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I can think of two reasons to take out a one year adjustable rate loan.  (1) when you anticipate a fall in rates in the near future, or (2) you really can’t afford the home and the lower rate will help you get in.

I don’t think anyone believes rates are going down.  So here we are again.  Home buyers purchasing homes they can not afford with loans likely to default when rates rise or prices fall.  Why buy a house you can’t afford?  If you are a wannabe 1%er.  You extend yourself to keep up with the Jones’ even though your salary has not.  By the way, “the wealthy barber” advises against over extending to buy a home.

The irony is our attempts to keep up with the 1% ultimately puts us further behind.  The banks are going to make money on us and/or get bailed out if they don’t.  Either way wealth is transferred from the 99% to the 1%.

My recommendation: don’t do it.

http://stream.wsj.com/story/latest-headlines/SS-2-63399/