Tuesday, July 12, 2011

Tuesday Links

Sovereign Debt Crisis



Taylor Conant said...

Greenlight: Do you know where your portfolio manager is?

Re: Greece sovereign debt

I wonder what kind of complacency could be found in Australian/NZ homebuilders, mortgage insurers and financial companies right now.

CP said...

Yeah, it is cool and awesome to skip work and play in the WSOP... except when you are having a tough year.

I think it would be pretty draining - which would make it harder to stay in the loop about the portfolio, no?

CP said...

Perhaps you should look at the australian ADRs for companies with financial and operational leverage?

Taylor Conant said...


Good idea, I am putting it on my To-DOs right now.

I just read the last link over at Overcoming Bias. Love the graphic of Odysseus, btw, I used that same image in a blog post recently on the company blog.

However, while I get his point and think he is onto something, he is making an epistemological error in the way he is approaching the problem. It is not fair to compare "abandon TV, for life, for $1M" with "abandon TV, periodically one month at a time, for the equivalent present value/interest payment on $1M of approx $4000".

Those might seem like related goods to the untrained eye but they're not. They're completely distinct goods. And they come with different amounts of information and different ability to anticipate personal future value preferences, as well. Information, even intrapersonal information such as anticipations of future states of mind, have economic costs-- they are not free.

That is precisely WHY if you suddenly put someone on the spot and said "Give up TV for life for $1M" they would react differently than if you let them try it in increments so they could adjust, or even said, "...and you may make your decision in one year about this offer" or even more, "...and you may try the offer and cancel at any time if you decide you don't like it."

These are different goods being offered. It is like "Ice in Summer" and "Ice in Winter". To the untrained eye, they're both ice. But their place in time and the related utility they have to a person in those differing conditions and states of mind, are entirely dissimilar.

CP said...

Sure, good analysis.

But it was a decent thought experiment that helps build the bridge to why you would be insane to refuse $1b to give up TV.

Taylor Conant said...

I know, I am not saying the guy is an idiot or it's a useless consideration. He is right that if you framed the problem differently people would probably have a different response.

But you'd also have a different problem.

Wish someone was paying me to not use the TV. I am already doing that for free!

EconomicDisconnect said...

Cool Neptune link, wow!