EconAir

    A Professor’s Guide:  How to Be a Superior College Student   This is a summary of what I’ve observed during 25 years as a college professor and student advisor. There are many online posts, YouTube videos, and books on how to be a good college student but most of them are mostly lists of generalities. This post is from a professor’s perspective (not usually made public). It gives specific, helpful hints on how to perform better as a student.   To be a superior student, you must become a skilled student, use your limited resource (time) efficiently, and understand your market – professors.   This post also discusses a strategic plan on how to finance college.   How to read a textbook For each new chapter, look at the end-of-chapter summary (and any online summary) first. That tells you what’s important. Concentrate on this material.   Be an active reader. Underline. Make marginal notes. Talk to yourself (“What the hell does this mean?”) Ha...

    INTRODUCTION:  SIMILARITIES AND DIFFERENCES BETWEEN 1929 AND 2020   Gamestop! Short squeeze! Bitcoin! Options! IPOs! SPACs! Hydrogen trucks! Tesla up 800%! Market valuations in bubble territory. And my favorite “blue sky” stock - Virgin Galactic.       At first sight, there was nothing in 1928-1929 similar to the impact of Covid-19 on the economy. Actually, there was. In 1927, Ford closed down his entire company to retool for a new line of cars. 70,000 Ford employees were thrown out of work; many more at suppliers also lost their jobs. But everyone knew that Ford would start up production again.     Ford began production in 1928; 1929 was a record year for auto production. But in late summer and early fall, inventories began to build up.   Both periods were preceded by speculation in real estate. Both ended badly, closing off an alternative area of speculation.   Both periods (1920s and 2010s) saw an increase...

It is a puzzlement why the stock market can go up while the economy is in a virus-caused depression. Much of the economy is in lockdown or closed because of decreased consumer demand. As many of one-third of workers and many small businesses are on federal life-support programs. Profits have disappeared. Large numbers of bankruptcies loom. Given the uncertainty, including recent record numbers of new virus cases, the usual stock evaluation metrics are worthless. With the economy tanking, how come the stock market has gone up dramatically? And continues to go up. THE STOCK MARKET Let’s decompose the stock market. When people talk about the stock market going up or down, they usually refer to an index such as the S&P 500 as the measurement. The S&P 500 is a market-value (cap, short for capitalization) weighted index. The ten most valuable companies account for over 20% of the total value of the index. There are over 3,000 actively traded stocks. But the 500 comp...

There are a number of forecasts of what the world will be like after the virus. Let’s take a look at some of them. Many long-term trends have been accelerated by the virus.  Probably the most cited example has been the accelerated move to digital-based transactions and behavior. This has occurred among both consumers and businesses. I think we have hit an inflection point. Before, there was a great deal of discussion about how one industry or market was becoming more dependent on digital platforms and automation based on artificial intelligence. The Internet of Things, online shopping and ordering, business conferencing, telemedicine. Or how a particular company was transforming an industry (Amazon, Uber). But now we see that the entire economy –  al l industries and markets – rely on digital. The technology and rapid adaptation are accelerating the shifts. Income inequality is bad and probably getting worse.  The usual reasons given are outsourcing in th...