Monday, June 23, 2008

Sometimes the simple ideas are the good ones..

This is a little off topic, not really finance. But a couple of Duke Management profs have published a piece in Science that says folks suffer from mpg illusion. Basically, they argue that we focus on trying to get higher and higher mpg, when the biggest savings are for those people who drive vehicles that get really bad mileage.

The story is here...
News and Observer article here

The basic idea is this. If you drive some big ugly truck that gets 10 mpg, you'll use 1,000 gallons a year to go 10,000 miles. Now if you trade to a truck that gets 15 mpg you'll use 666 gallons. A savings of 333 gallons a year.

Now consider someone who is getting 25 mpg and they trade up to a hybrid that gets say 35. Their gas savings go from 400 gallons to 285 gallons. A savings of about only 115 gallons a year.

The point then is that the biggest savings come from fairly small improvements on poor mpg vehicles.

The idea is so obvious of course it is brilliant and what is really great is that these guys got it published in Science.

Thursday, June 19, 2008

Google stock screener

Google has a new stock screener. What is cute about it is that you can see the distribution of the values you are screening on graphically. For example you can see the distribution of market values. Very nice.

Google stock screener

You can also screen by sectors etc. What would be nice is if you could screen by index membership as well.

Thursday, June 12, 2008

Finance sayings.

Stephen Dubner at the freakonomics blog has a bleg out for finance sayings.

One of my faves is
The market can stay irrational longer than you can stay solvent. - Keynes

Salaries for college grads

If you are graduating or have just graduated, then this is going to help much - but if it's still interesting.
Salaries for college grads for 2008

HT: Newmark's door.

As Craig Newmark points out - Econ grads earn more on average than finance grads. Food for thought. My limited experience has been that Econ majors taking my classes have always been among my best students. So I suspect that there is a selection bias - on average better quality students become Econ majors.

Tuesday, June 3, 2008

Bad news in the charts

My colleague Don sent me this picture. As all chartists know, you should sell when you see the black swan indicator.