Hope you have a good one!
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Author Archives: kevin
Best sentences I read today
"The most riveting sections of the book describe the desperate efforts of HBS students to land jobs with the most elite hedge funds and private-equity firms—the very firms suffering today from the credit meltdown.
It’s amazing, really. The 900 students in Broughton’s class could do just about anything—and yet most of them, for reasons they can’t really explain, are all desperate to do the same thing. A student named Cedric described it this way: “We have so many choices, and yet so few people seem happy about that. It just makes them anxious. And then they make terrible decisions about their lives.”
More here.
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Teaching Principles
When you're teaching something, you want to get every learner involved, maximize repetitions of whatever you're trying to learn, and provide instant feedback. I'm amazed how many teachers don't understand these principles.
Imagine if you were a basketball player, and practice consisted of your coach demonstrating every drill while you sat in the bleachers. Then the coach left and you were on your own for practice. Sure, this may help you become a better player, but with no supervision your team-mates might decide to leave, and you would have little idea of whether or not you were doing the drill correctly. Maybe the coach videotapes your practice session and gives you feedback three or four days later. This team would be awful.
Basketball is competitive - if you're not teaching the drills well someone else is and they're winning games, so there's constant incentiveto become a better at teaching. Most coaches demonstrate the right way to do the drill one time, have the team practice the drill and then provide instant feedback - praise for players who improve and criticism for students who are not trying hard. The best basketball practices I've seen use one basketball for every player, a hoop for every two players and every drill involves everyone all the time. Everyone gets involved, the players are maximizing repetitions and the coach can provide instant feedback.
Few classes are taught in this fashion. Instead, the "teacher" uses all of his interaction time with students to lecture to them. Then the students go off on their own to practice everything in the lecture. They turn in their work two days later and get feedback on it four days after that.
Some teachers give examples and then solve them on the board with help from the class. All of the students know the teacher knows what he's doing, and invariably, the people who volunteer to "help him out" are the top two or three students in the class. Many times I think teachers assume students are slow, when in fact we don't want to tell you an answer you already know. Why doesn't he ask everyone in the class to work on the problem and then go from person to person giving feedback? Then someone can solve it quickly in front of everyone. This way everyone gets involved, the students are thinking, and the teacher gets instant feedback from everyone about how well they understand the concept, not just the do-gooder students.
Even better would be to ask students to read/watch the lecture before class starts. This way all of the in-class time can be spent on getting everyone involved and providing instant feedback.
A simple change in course design can make a huge difference in comprehension and learning rates.
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Debate thoughts
McCain isn't getting any traction with his attacks on Obama if the Cnn ticker is a guide. If I'm a McCain adviser I'm screaming at him to lay off the attacks. Unfortunately you can't call time-out during the debate.
I wish the candidates could get more specific about positive things. I feel like the only times they're getting specific are when they attack each other over overhead projectors or number of votes for some evil bill. Why are specifics and facts so effective for attacks but generalizations so much better for policy?
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Cool Election Artwork
"The Searcher" has drawn a bunch of cool political graphic novel-style cartoons and posted them on Flickr. I won't steal his thunder by posting any, but they're worth taking a look, here.
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The 3 Rules You Need for a Meeting
From Ben Casnocha from a friend:
You should say something in a group meeting only when (a) you are pretty sure you are right, (b) you have something to say that is different than what everyone else is saying (that doesn't mean you necessarily disagree - it could be additive), (c) what you have to say is important to the discussion.Not terribly insightful but worth repeating. Unfortunately you can't assign property rights to silence. Although it would be interesting to give everyone in the class a chess timer and set the total amount of time to equal the length of the class period. I would add that in roundtable discussion you should have to summarize the views of the person before you before you can speak. Discussions don't work if the speakers aren't addressing each other.
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Richard Posner on the Bailout
Richard Posner has sage words about the bailout. He says that banks are suffering both from lack of capital and illiquidity. If they suffered only from lack of capital and the government bought the assets at market value, nothing would change, the supply of loans would not increase. If they suffered only from illiquidity the government could buy the assets at market value and hold them, the banks could make loans (you can't loan someone a collateralized debt obligation, but you can loan them cash) and the government would make its money back later.
He says that the government should demand shares in banks it loans money to, because the alternative is a cash transfer from taxpayers to the bank's shareholders. While government ownership of private equity generally leads to political mismanagement and waste (a great example is Alitalia, as Becker points out), if it holds the shares briefly and sells them at the next opportunity there shouldn't be too much of a problem.
He then goes on to outline what he thinks were the causes of the bailout, which are more private than any lack of government regulation. "There is a difference between creating and merely exacerbating a crisis," he writes. "Moreover, it is a paradox to exonerate the market on the ground that the government did not do enough to regulate it!"
It's a complicated problem. But if our government is spending $2,333 per man, woman, and child on the problem, it deserves your attention.
Uninformed analysis makes me think we can use $700 billion for much more noble purposes than grease the wheels of our banks. I'm also wondering why there's a market failure that requires government intervention. Usually if there is a shortage of lending, real interest rates will rise until people want to save money/lend it to others.
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Warren Buffett Interview on Freddie Mac and OFHEO
"After it all came out, OFHEO wrote a 350--340 page report examining what went wrong, and they blamed the management, they blamed the directors, they blamed the audit committee. They didn't have a word in there about themselves, and they're the ones that 200 people were going to work every day with just two companies to think about."
Read the excerpt.
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Nassim Nicholas Taleb Called It
Nassim Nicholas Taleb saw the market downturn coming 4 years ago, and was prepared to profit from it. He is a font of pessimism about banks and the market, and one of the most fascinating men alive.
Taleb's argument is that statistics and probability can only do so much to quantify and manage risk. Statistics and probability are great for games like craps, where the events are well-defined and you can calculate the probability and the expectation of every bet. Hedge-fund types can apply these statistics to make small gains in everyday market trading. The problem is that the small gains are overwhelmed by sweeping disasters, bubbles or failures in the market (or in craps, the likelihood that robbers shoot up the casino and steal everyone's money). The statistical tools being used today are just not good enough to evaluate the probability of those sweeping negative events, like the subprime crisis. Consequently everyone will over-estimate the chance of the market going up and up. Taleb bets against all of Wall Street by buying cheap options with extremely small odds. when markets operate normally, he loses small amounts on these options; when the markets lose a lot of money, he calls in the options and makes a fortune.
If you want to learn more about the theory read The Black Swan
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Public Dryer Problem
A number of my fellow students are annoyed that their clothes are hardly ever dry after one cycle in the dryer. The problem though relates more to their expectations than the dryer's ability. The minimum dryer cycle is not long enough to dry most loads. The dryer's minimum time should be set longer, or at the very least there should be a suggestion of the best amount of time to dry your laundry.
The lint screen is almost always full. Empty your lint screen for better results. Or design the dryer so the lint screen pops out when you open the door.
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