Why do stocks go up and down?

Why do stocks go up and down?

I was motivated to major in Economics because I wanted to understand human behavior and how the world works. Especially things that don’t make any sense. It’s hard to find a better example than the stock market. There are hundreds of publications and TV networks and commentators that try to make sense of something that really seems to makes no sense.

But it actually does make sense. It’s just a kind of sense that’s difficult to accept especially if you’ve invested your retirement into the market.

Let’s start with things that are often cited as reasons for stocks going up or down:

  • Company earnings
  • News stories
  • P/E ratio or other numerics
  • New product introduction
  • Layoffs

I could go on. But none of these directly causes a stock to go up or down. It’s easy to prove this by picking a company and looking at historical price moves based on one of the items above.… READ THE REST

The last time I saw Steve Jobs

The last time I saw Steve Jobs

I wrote this little anecdote shortly after Steve Jobs passed away. Despite it happening more than 7 years ago, it still is imprinted on my brain and does a great job of illustrating the person I felt he was.

I was leaving the main building on the Apple campus. Just ahead of me was Steve. This was not an uncommon sight despite being such a large company. He was often seen walking in the halls or in the courtyard in the center of all the buildings. He always seemed to have a spring in his step, like he was walking on his toes. And the glint in his eyes that you’ll see in photos. Sometimes he was seen eating lunch with Jony Ive, one of his closest friends.

On this day, though, the spring in his step was gone. I slowed down a little bit to match his pace. Although I passed by him often, I wanted to see how he was doing at close range.… READ THE REST

New tennis face for 2018

New tennis face for 2018

Not since my 2016 pick of Alexander Zverev (now in the top 10!) have I been this excited by a new player. This year it’s Alex de Minaur. Currently ranked 208 in the world, this is definitely my biggest longshot of a pick ever.

He has a long list of things going for him:

  • He’s got a great attitude. Gets fired up regularly and generally doesn’t have negative outbursts. They always tell you to play one point at a time and Alex does this. Terrible point? Reset, then try again.
  • He’s fast as almost anyone out there
  • He’s patient, which is rare in young players. He waits for the right moment and then strikes.
  • He’s scrappy and steals points that you think you should have one
  • He’s a tremendously good volleyer
  • He hits the ball on the rise and does very well against difficult servers like Raonic

Weaknesses are his second serve and sometimes playing a bit too conservatively.… READ THE REST

Just eat real food

Just eat real food

I still hear most people demonize fat (especially saturated fat), salt, and cholesterol (especially eggs) despite a significant amount of research that says otherwise. Perhaps many decades of having it pounded into everyone will take some undoing.

I thought I’d collect some references to recent research that covers these maligned nutrients. There’s much more out there, but these are the most signicant ones from trusted sources.

Salt

This week a meta-analysis of seven studies involving a total of 6,250 subjects in the American Journal of Hypertension found no strong evidence that cutting salt intake reduces the risk for heart attacks, strokes or death in people with normal or high blood pressure.

It’s Time to End the War on Salt

Fat and Saturated Fat

The second study, published in the European Journal of Nutrition, is a meta-analysis of 16 observational studies. There has been a hypothesis that high-fat dairy foods contribute to obesity and heart disease risk, but the reviewers concluded that the evidence does not support this hypothesis.

… READ THE REST
New tennis face for 2016

New tennis face for 2016

I did this for 2011 but I thought it would be fun to put my pick or picks for the next hot player in writing and see how I do.

I was watching a match on Court 5 at the US Open in 2015, which shares seating with Court 4 so you can watch two matches at once. On Court 4 was an unknown player, Alexander Zverev, playing veteran Philip Kohlshreiber. As time went on, I started watching that match instead. It was 95 degrees, humid, and the match went 5 sets. Zverev succumbed to cramps and lost the match.

But holy shit, one of the most impressive players I’ve seen in years. Tall with an impressive serve, fast, equally good on both forehand and backhand, but not such a great volley. Ranked around 100 in the world at the time. Future Top 10 for sure if not higher.

INDIAN WELLS, CA – MARCH 13: Alexander Zverev of Germany in action in his match against Grigor Dimitrov of Bulgaria during day seven of the BNP Paribas Open at Indian Wells Tennis Garden on March 13, 2016 in Indian Wells, California.
… READ THE REST
10 things I learned by visiting Costa Rica

10 things I learned by visiting Costa Rica

  1. Hanging things on a clothes line is not for drying them; it’s for conducting mildew and mold growing experiments. 
  2. Wearing seat belts while driving on rough gravel roads can cause more injury than not wearing them.
  3. Too warm? Underwear is optional.
  4. Stop signs are for aesthetic purposes only. Who doesn’t love a splash of red?
  5. Being driven through heavily trafficked areas by a native driver is as exciting as any ride at Great America.
  6. It’s not bugs crawling on you, it’s just sweat dripping on your skin.
  7. I lied. It’s probably bugs crawling on you.
  8. Dead Toucans sometimes drop from the sky. Seriously, I have a picture of one.
  9. Toucans are assholes. At least according to a German massage therapist specializing in foot reflexology.
  10. Costa Rica is an amazing and beautiful country with the highest concentration of wildlife I’ve ever seen. You should go!
… READ THE REST
How homeopathy “works”

How homeopathy “works”

(Note that in 2018 an article was published that supports what I’m saying here)

What if the placebo effect isn’t a trick?

For a long time, I put homeopathy in the same category as organized religion. I felt both were based primarily on faith with little science to back them up. I believed that both were the refuge of the weak or less intelligent among us.

The problem is that even among smart people, homeopathy is very popular and many people swear by it. Heck, in much of Europe and Asia, homeopathy is practically mainstream. Is this a pervasive mass delusion?

Before too many people think I’m crazy, I should mention that I strongly believe that homepathic remedies simply cannot work based on their physical content. They are basically salt or sugar pills or plain water and the notion that they contain some “essence” or “memory” that has a physical effect on the body makes little sense.… READ THE REST