Previously published on February 13, 2016 on Newgeography.com   It is an article of faith among California’s political class that insufficient higher educational opportunities are a constraint on California’s economic and job growth.  Just about every California economic development document includes a discussion of California’s desperate need for more college graduates. Unfortunately, the facts disagree with… Read more

Based on the book of the same name by Michael Lewis, the Big Short is a movie about several hedge fund managers who identified cracks in the mortgage market in 2005-2007 and attempted to bet on a collapse in the market for mortgage-backed securities (MBS). In particular these managers noted that underwriting standards on mortgage… Read more

Written by Bill Watkins Previously published January 19, 2016 at newgeography.com. Every now and then, something happens to cause California’s comfortable establishment to celebrate the state’s economy.  Recent budget surpluses and jobs data have provided several opportunities, never mind that these are hardly summary statistics.  They don’t tell the complete story. The celebrants conveniently ignore… Read more

What is the right amount of debt for a particular borrower? This depends on the borrower.  Are we talking about a corporation, a bank, a household, a government entity, or an investment fund?  At a very high level, it seems that some debt can be beneficial, while too much debt can be detrimental.  Sort of… Read more

Houston, we have liftoff!  That is not what Fed chair Janet Yellen said, but we can say that the Dow closed up 224 points at the end of trading today.  The Fed had telegraphed this move, markets had priced it in, and this market reaction is consistent. I am pleased with this move, as I… Read more

Asset management is an extremely competitive industry that offers extraordinary wealth building opportunities to those managers who are successful in generating market beating returns, or at least in bringing in large amounts of assets to manage. This opportunity draws lots of really smart people to the business. The problem is that the average performance of… Read more

We have shown in prior blogs how do-it-yourself investors can achieve reasonable investment returns through the use of low-cost highly diversified passively managed funds. How can non-do-it-yourselfers obtain these same benefits? There are financial advisors who specialize in these services, but often not at an acceptable level of cost. Recently, a marriage of technology and… Read more

John Cochrane is professor of finance at the Booth School of Business at the University of Chicago and is an expert on the theory of asset pricing. You can take (or audit) his free online course through Coursera. In this course he starts out by briefly summarizing the state of the art in asset management… Read more

Previously published on September 2, 2015 on Fox and Hounds As California weathers its fourth straight year of extreme drought, policy makers and their cheerleaders continue to scapegoat California’s agricultural industry. Writing in the Sacramento Bee, economist Christopher Thornberg, for example, refers to the industry as “feckless” and advocates using eminent domain to seize farmers’… Read more

John C. (Jack) Bogle graduated from Princeton University in 1951 and founded The Vanguard Group, Inc. in 1974. In 1975, Vanguard introduced the first so-called “Index Fund” based on the Standard and Poor 500 (S&P500) stock index. The S&P500 is a market capitalization weighted average of 500 of the largest stocks that trade on the… Read more