Bob Carlson

May 28, 2015

Secrets to Proper Grilling

Filed under: Retirement - General — Bob @ 12:20 pm

Most people don’t grill food properly. With summer grilling season approaching, it is a good time to consider your grilling practices and biases. Take a look at this review of a new book by the Meathead, a proprietor of a popular web site on grilling. He follows the fundamental principles of looking at data and research instead of passing on conventional wisdom.

Much of the Gospel of Meathead skewers barbecue conventions and received wisdom—what Goldwyn calls “old husband’s tales.” To wit, the finest ribs do not necessarily fall off the bone, soaking wood chips is a mistake, and searing first before turning the heat down is not the best way to cook a thick steak.

His mostly male audience tends to fawn, except when beer-can chicken is the subject. Goldwyn used seven pages, three charts, and two diagrams to assail the popular notion that a can of beer shoved into a chicken gets hot enough on a grill to steam the bird. “The chicken is a thick, wet insulation blanket wrapped around the beer,” he wrote, “so, contrary to myth, the beer remains cool and never ever steams.”

The World’s Oldest Person Keeps Dying

Filed under: Health,Retirement - General — Bob @ 8:20 am

Here’s an article with some interesting facts about those who have become the world’s oldest living person. It has interesting points about how many people have been verified as the oldest, how long they lived, and why they often die shortly after being verified as the world’s oldest living person.

Weaver’s five-day run as the oldest person in the world was short, but it turns out that the oldest person in the world never holds that title for very long. Since records started being kept in the 1950s, the average tenure has been just around a year, according to the Gerontology Research Group; it has dipped to just seven months since the year 2000. Weaver’s incumbency isn’t the shortest in recent years; North Carolina’s Emma Tillman died four days after becoming the world’s oldest person in 2007.

When she died, Weaver was the seventh-oldest person in verified history. The woman who preceded her as the oldest living person in the world, Japan’s Misao Okawa, died a month after she turned 117 — older than all but four other people in verified history. (Okawa credited her longevity to lots of sleep and lots of sushi.) The current oldest living person in the world, Jeralean Talley, is one of 11 children of Georgian farmers and is the 12th-oldest verified person in history; Brooklyn resident Susannah Mushatt Jones is only 44 days younger than her.

May 27, 2015

Analyzing Home Prices

Filed under: Economy,Housing — Bob @ 5:28 pm

Do you realize it is almost 10 years since we hit the peak in home prices?

Real estate has recovered from the lows, but by how much? And how can you tell if the price for a home is too high? This post shows two ways to analyze these questions. First, it adjusts home prices for inflation. It shows that adjusted for inflation home prices nationally still are well below the peak. Second, it looks at price to rent ratios, which is a way of measuring how much of a return you could get from a home as an investment. By that measure, we’re at 2003 levels. They are well above the cycle bottom, but even farther above the levels before 2000.

The expected slowdown in year-over-year price increases has occurred. In October 2013, the National index was up 10.9% year-over-year (YoY). In March 2015, the index was up 4.1% YoY.  However the YoY change has only declined slightly over the last six months.

As I’ve noted before, I think most of the slowdown on a YoY basis is now behind us (I don’t expect price to go negative this year). This slowdown in price increases was expected by several key analysts, and I think it was good news for housing and the economy.

Manufacturing in May

Filed under: Economy — Bob @ 1:27 pm

It’s no secret that manufacturing is slowing, but by how much? In this post, all the manufacturing surveys for the  month of May are compiled to show the national picture. The weakness is due primarily to two factors: declining oil and commodity prices, and the strong dollar. It’s likely we’re at or within a few months of the worst of the effects of lower oil prices, since oil prices have recovered from their lows. But I don’t expect a strong rebound soon.

The Full Story of Art Forgery

Filed under: Cash Management,Investing — Bob @ 8:14 am

A new book reveals the ins and outs of art forgery. Two interesting points are that it is fairly easy to fool experts with a forgery, at least for a while, and that those who frequent the art world are neither surprised nor alarmed when forgeries are discovered. There also are several different types of forgeries. Here’s a detailed review.

In the 1920s, the megalomaniacal opium addict Han van Meegeren made a fortune (approximately $65 million in today’s dollars) faking Vermeers and other Dutch masters. After World War II, one of his “Vermeers” was found in the possession of Hermann Goering, and van Meegeren was put on trial as a Nazi collaborator for having given up Dutch cultural property. When he confessed that this was not in fact a Vermeer at all, but rather something he’d painted a few years before at his villa in Provence, no one believed him. He literally had to paint for his life to demonstrate that he could, in fact, make a Vermeer from scratch. (Charney quotes him as saying such things as, “I shall paint you a new Vermeer. I shall paint you a masterpiece!”) He died a folk hero—the man who tricked Goering—in 1947.

May 26, 2015

Understanding Slow First Quarter GDP

Filed under: Economy — Bob @ 5:20 pm

The U.S. economy appears to have a pattern of slow growth in the first quarter of each calendar year. Economists have started to notice and develop theories about it. This post lists several theories and has links to more detailed discussion.

For those not keeping track, it boils down to two camps: economists who blame first-quarter weakness on idiosyncratic factors versus those blaming mismeasurement.

More on China’s Latest Stimulus

Filed under: Emerging stock markets — Bob @ 12:20 pm

I’ve been reporting that China is changing its economy to one that is less focused on producing goods for exports. It also is trying to wind down corruption and deal with several sectors of the economy that are saddled with debt. To keep the economy growing during this transition, the government is initiating several stimulus plans. Here’s a summary of the latest announcement.

This month, as Xinhua News Agency reports, Beijing has unveiled a “pro-growth measure” at the rate of one every two days.

April was a banner month for Beijing’s spenders as well. The Ministry of Finance reported a 33.2% increase in fiscal spending compared with same month in 2014.

For the last several years, Beijing has been using fiscal stimulus in varying amounts to keep the economy humming. No one, however, thought Premier Li Keqiang, generally considered a reformer, would resort to the old-line, anti-reform tactic of massive government spending.

John Nash, R.I.P.

Filed under: Economy — Bob @ 8:32 am

Over the weekend John Nash, the mathematician and subject of the movie A Beautiful Mind, died with his wife in an automobile accident. Nash was a Nobel laureate in economics for his development of game theory and also was credited with significant advances in mathematics. The New York Times obituary is here, and a tribute from a Princeton colleague is here.

Dr. Nash’s theory of noncooperative games, published in 1950 and known as Nash equilibrium, provided a conceptually simple but powerful mathematical tool for analyzing a wide range of competitive situations, from corporate rivalries to legislative decision-making. Dr. Nash’s approach is now pervasive in economics and throughout the social sciences and applied in other fields as well, including evolutionary biology.

Harold W. Kuhn, an emeritus professor of mathematics at Princeton and a longtime friend and colleague of Dr. Nash’s who died in 2014, once said, “I think honestly that there have been really not that many great ideas in the 20th century in economics, and maybe, among the top 10, his equilibrium would be among them.” A University of Chicago economist, Roger Myerson, went further, comparing the impact of the Nash equilibrium on economics “to that of the discovery of the DNA double helix in the biological sciences.”

May 22, 2015

Health and Longevity Updated

Filed under: Health — Bob @ 2:50 pm

The Weekend Essay for The Wall Street Journal (subscription might be required) reports on a detailed study of  people on the island of Sardinia off Italy who have extraordinary longevity. At first, researchers assumed genetics played a major role. After further research, they concluded genetics weren’t a factor. Instead, diet, exercise, family, and community played major roles. The dietary research shows that carbohydrates are fine as long as they are complex carbohydrates, not the refined stuff that’s prevalent in the west.

More than 65% of what people in the blue zones ate came from complex carbohydrates: sweet potatoes in Okinawa, Japan; wild greens in Ikaria, Greece; squash and corn in Costa Rica’s Nicoya Peninsula. Their diet consists mainly of vegetables, fruits, whole grains, beans and other carbohydrates. They eat meat but only small amounts, about five times a month, usually on celebratory occasions.

The cornerstone of every longevity diet in the world was the humble bean. One five-country study showed that beans were the only food that predicted a longer life—for each 20-gram serving (about two tablespoons) eaten a day, the chance of dying dropped by 8%. Fava beans in Sardinia, black beans in Costa Rica, lentils in Ikaria, soybeans in Okinawa. Seventh-Day Adventists, America’s longest-lived subculture, eat all kinds of beans, taking their cue from God’s injunction, in the book of Genesis, to eat the fruits of “seed-bearing plants.”

*******

Americans spend about $110 billion a year on diets, exercise programs and supplements, but self-discipline is a muscle that fatigues. Research shows that such short-term efforts fail for almost everyone in less than three years. By contrast, successful strategies to avoid disease and yield longevity require decades of adherence—or entire lifetimes

For enduring gains in health in the U.S., we should shift our tactics away from trying to change individual behavior to optimizing our surroundings. We should make healthy choices not only easy, but also sometimes unavoidable—so that longevity “just happens” to Americans.

May 21, 2015

Know Your Investment Limits

Filed under: Asset Allocation,Investing — Bob @ 8:20 am

Every investor and investment process has shortcomings. If there were a perfect investment process, we’d all use it and make a lot of money. The goal isn’t to find the perfect investment process. The goal is to find a process that works for you and to know its shortcomings and limitations. You can work with those problems if you know about them and don’t expect the process to produce great results all the time. Read this more detailed explanation of these ideas.

You have to remember how important it is to admit your own limitations. When looking into any investment strategy, portfolio manager, advisor or fund offering I find it’s a red flag when someone doesn’t come out and admit the weaknesses in their investment process.

I understand why firms like to avoid this kind of transparency. It’s not always a great sales tactic to talk about where things can go wrong. But when trying to establish long-lasting client relationships, as most financial firms should be trying to do, being open and honest up front is how you set the correct expectations going forward so no one’s surprised by future developments.

Unfortunately, I’ve seen far too many professional investors who would rather make the initial sale than tell the truth to prospective clients.

Next Page »

Powered by WordPress