New Additions to The Blogroll

Since it's the end of the year, I'm doing a little housecleaning (or would that be "blogcleaning"?). There are a couple of academic blogs I've been reading lately that are worth adding to the blogroll. It's grown to the point that I'll probably have to organize it into categories at some point. But that'll be something for after the new year. In any event, here are the new additions:

Academic Coach is run by Mary McKinney, a Ph.D. in psychology, who advises academics on strategies for writing, gaining tenure, and in general navigating the shoals of academic life. She's got some great resources both for grad students and for newer faculty. In fact, her site is the reason I ordered two of my vacation reading selections. I'd recommend it for anyone who's either new to the game or trying to increase their academic productivity.

A Gentleman's C is run by The Crazy Professor, a tenured faculty member who teaches statistics to social science majors at an unnamed large state university. She regularly posts on the difficulties in teaching quantitative topics to non-quant oriented students. She's got a good (if quite dark and sarcastic) sense of humor.

Here's wishing you all a safe, happy, and successful (however you define that word) New Year.

Coffee That's Good To The Last Drop(ping)

I like a good glass of wine, but I'm not anywhere near being in the same league as some other well known bloggers. What I really like is a good cup of coffee. Way back in the early 80's I lived right around the corner from a coffee shop (this predated the Starbucks era). The owner was a crusty old codger who it turns out had owned a coffee plantation in Guatemala. So, he took a group of us and schooled us in all things coffee-related. I had actually gone to coffee tastings long before I went to my first wine tasting, and about ten years before it became trendy.

There are a lot of similarities between wine lovers and coffee lovers. Each has their own language for describing their favorite varieties, and each has contingents that go "over the top".

However, it seems that coffee drinkers win the contest for sheer absurdity.

That's just wrong on so many levels -you could say, "from top to bottom" (sorry, couldn't help myself). Somehow, I'm not surprised that most of the orders have been from California.

I'll stick to my Costa Rican blend, thank you very much.

Real Estate Pitfalls

One of the nice things about having a blog is that I can use it to keep track of things that I might want to refer to later. With a little luck, we might be selling the Unknown Mansion (and buying another one) in 2006. So, I'm putting this post up as a reminder to myself if and when I start the process. If you're also in that boat, here are some mistakes to avoid (from MSN Real Estate):

• Not understanding the length of the process
• Exposing your hand
• Skipping the loan preapproval step
• Assuming appraised value equals market value
• Timing the "bubble burst"
• Hiring the wrong agent (been there, done that, bought the shirt)
• Missing the big picture
• Not knowing what you're signing
• Poor timing
• Not doing your due diligence with a criminal search

Click here for the whole thing. (HT: Consumerism Commentary)

We managed to avoid most of these pitfalls the last time we did this dance but skill messed up on a few. Hopefully next time will be even better.

Financial New Year's Resolutions At All Things Financial

It's the season for making New Year's Resolutions. In that spirit, JLP at All Things Financial has a round-up of New Year's suggestions from the Personal Finance Blogger community. There are posts from many of the "usual suspects (and a few new ones). Good suggestions one and all. They include:

• Set up an emergency fund
• Get out of debt - pay off those credit cards
• Manage your 401-k
• Set up an IRA
• Set up a budget
• Prepare personal financial statements

Good sound advice all. I'd also include

• Review your life and disability insurance coverage
• Determine goals for accumulating money for education, retirement, etc...
  

Click here for the whole thing. It's worth reading, and chock full of links to other bloggers' advice.

Holiday Reading For Nerds

I usually use winter break for research and for catching up on my reading. This one's no different, particularly since our van is in it's last gasps, which gave us a pass on driving 300 miles up the east coast to visit the Unknown Extended Family for the holidays. Instead, we'll do mid-January, and we get to have the Unknown In-Laws come down to visit us for a week between Christmas and New Years. This, of course, gives me more incentives to hole up in my subterranean office (known to the kids as The Batcave) and work on my research.

It works out well, since I'm putting a paper together that I'll hopefully present on a job talk in about three weeks . The talk will be at one of my dream schools - it has pretty much every data resource I need for my research, a small doctoral program (so I get grad assistant scut puppies), a grad-school classmate on the faculty, and best of all, it's only 70 miles from both sets of parents, so the kids can spend lots of time with the Grands and all the cousins.

In between running long SAS programs (SAS is a statistical programming language, for you non-nerds), I'm also doing a bit of reading. Just to show you why I'm known among my academic friends as the Alpha Nerd, here are the books I ordered for the break:

First, in the SAS/Programming Nerd category:

From time to time, I have to read data that's formatted in strange ways. This book came highly recommended, with lots of examples of code to read data from input files formatted in almost any way I could imagine: Reading External Data Files Using Sas: Examples Handbook by Michele M. Burlew.

Since my type of research involves a lot of custom programming to line the data up right, I end up writing a lot of macros (basically subroutines). To improve my skills in this area, I got Carpenter's Complete Guide to the SAS Macro Language, 2nd Edition, by Art Carpenter.

Next, in the Academic Nerd Category:

I ordered two books by Robert Boice, who's done a great deal of research on what makes faculty productive. Although I've been doing this professor gig for almost 10 years, I found the first book, Advice for New Faculty Members to be an eye opener. It's chock full of helpful advice on how to be more productive (i.e. do more research) with less stress. The second book (also by Boice) is similar, but focused just on the writing aspect of academia, and is called Professors As Writers. both books were highly recommended by Academic Coach, and for good reason.

Finally, for the general Word Nerd lurking deep in my soul, I got The Synonym Finder, by J. I. Rodale, et. al. -- probably the best thesaurus around. Given that I was a kid that read dictionaries for fun, this should be pretty cool. Like I said, I'm an unrepentant nerd.

Anyway, looks like my latest SAS program just finished running. Back to the torturing of data.

The Carnival of Investing

JLP at All Things Financial is hosting the 2nd Carnival of Investing. Go check it out - here are the ones I found interesting:

Blueprint For Financial Prosperity talks about year end tax planning in Wash Away Stock Losers With Winners

Financial Page has a piece called SIMPLE IRA Transfers in which he describes why he is moving money from his SIMPLE IRA to his personal IRA.

Investorgeeks (cool name, there) schools us on the basics of bonds in Bonds, Part I: What are bonds?

MyMoneyBlog gives us Dollar Cost Averaging in Dollar Cost Averaging vs. Lump Sum Investing, in which he shows that the conventional wisdom is not always right.

Finally, A Financial Revolution tells us some Signs of Creative Accounting. I've done some research in the area of earnings manipulation, and I can tell you, however, that it's extremely hard to spot which firms are manipulating earnings before the fact.

At first glance, this carnival looks like a winner. Next week's carnival will be at Consumerism Commentary -- be sure to check it out.

And now, back to the torturing of innocent data.

Mungowit's End: Myths and Myth-sters

Michael Munger is a professor of Political Science at Duke (which apart from having an irritating baseball team is a pretty good university). I recently came across this piece he wrote (back in June) where he gives some excellent (and blunt) advice to his fellow academics. He lists five "myths" that he's heard often, such as :

• There is no relationship between work and publishing record. It is all luck, connections, and mystical "ability"; either you have it or you don't.
• It's gotten harder to get published over time.
  
• If it hasn't, it's gotten harder to get published in "top" journals.

While he's in a different discipline than I am, he's clearly been extremely productive, and he has some great advice:

Finish what you start - don't just start new papers to get them accepted at conferences

You should have at least three under review at all times. If one gets rejected, turn it around immediately and get it back out there. If one gets accepted, send out another new paper immediately.

Everyone has ideas. Not all of them turn into good papers. You can't tell until you work on them a long time. If an idea turns out to be not that great, write it up and send it right away to a second-tier journal.

If you are publishing less than two papers a year, you're not working enough, and if you are NEVER sending papers to top journals, you're not working deeply enough.

Read the whole thing here. Munger doesn't mince words -- important, because I have a thick head.

HT: Division of Labour

This Week's Carnival of Personal Finance

This week's Carnival of Personal Finance is up at MightyBargainHunter. As usual, here are my picks of the week:

Free Money Finance has some things to do with your year-end bonus.

JustAnotherBlogger from Just Another Money Blog has some great tips for eating out on the cheap in eat out for the price of the tip. For a small bit of time on the net, it's worth it.

Multiple Mentality tells us about some of the fine print to pay attention to when getting rental car coverage from a credit card. It's only a few bucks, but those dollars add up.

Yiles! Here's a very realistic-looking phishing spam received by nickel at Five Cent Nickel.

Blueprint for Financial Prosperity compiled a list of personal fiannce bloggers' favorite personal finance books.

How does the lengthening of people's lifespan effect insurance premiums? InsureBlog has some answers in Not so fast.

Sitting Pretty! has some great year-end advice.

Sometimes spending wisely is a great way of saving money, says Jeffrey Strain (of Personal Finance Advice) in The Art of Spending.

Canadian Capitalist tells us about some new and innovative exchange traded funds for various types of sector investing

That's all for now, folks. Remember - look around the Carnival when you're done, since your interests might well be different from mine.

This Week's Carnival of The Capitalists

This week's COTC is up at Multiple Mentalities. Here are my picks of the week:

In the leadoff spot of my lineup of picks, Josh Cohen (of Multiple Mentalities) gives us Josh CohenÂ’s Brief Guide to Business E-mail Etiquette, The best point he makes is that whatever you put in an email stays around for a long, long time.

Here's a good post illustrating the concept of supply and demand: Iran has outlawed alcohol. Therefore, alcohol is scarce there. So, Iranian Booze Smuggling is on the rise, and the smugglers are making a boatload of money.

In the latest of his pieces on interest rates and the economy, James Hamilton analyzes what he calls The Real Yield Curve. He's a smart guy who puts things very simply and clearly - read it.

In this week's "Big Brother" post, Barry Welford tells us about Hidden Cameras in unexpected places.

The Real Returns gives us 5 Screening Criteria for Mutual Funds.

A Financial Revolution had a good post on The Power of a DRIP, or dividend reinvestment plan.

Finally, Blueprint for Financial Prosperity reminds us not to loan to family members in Loans Are For Banks.

That's it for this week. Back to torturing data for a research piece (if I keep at it long enough, I'm sure I can get it to confess to something).

Infant Discovered In Barn By Child Protective Services

Instead of glad tidings of comfiort and joy, here's what the Christmas announcement might have looked like if they had Child Protective Services 2005 years ago:

INFANT DISCOVERED IN BARN, CHILD PROTECTIVE SERVICES LAUNCH PROBE
Nazareth Carpenter Being Held On Charges Involving Underage Mother

Bethlehem, Judea - Authorities were today alerted by a concerned citizen who noticed a family living in a barn. Upon arrival, Family Protective Service personnel, accompanied by police, took into protective care an infant child named Jesus, who had been wrapped in strips of cloth and placed in a feeding trough by his 14-year old mother, Mary of Nazareth.

During the confrontation, a man identified as Joseph, also of Nazareth, attempted to stop the social workers. Joseph, aided by several local shepherds and some unidentified foreigners, tried to forestall efforts to take the child, but were restrained by the police.

Also being held for questioning are three foreigners who allege to be wise men from an eastern country. The INS and Homeland Security officials are seeking information about these who may be in the country illegally. A source with the INS states that they had no passports, but were in possession of gold and other possibly illegal substances. They resisted arrest saying that they had been warned by God to avoid officials in Jerusalem and to return quickly to their own country. The chemical substances in their possession will be tested.

The owner of the barn is also being held for questioning. The manager of Bethlehem Inn faces possible revocation of his license for violating health and safety regulations by allowing people to stay in the stable. Civil authorities are also investigating the zoning violations involved in maintaining livestock in a commercially-zoned district.

The location of the minor child will not be released, and the prospect for a quick resolution to this case is doubtful. Asked about when Jesus would be returned to his mother, a Child Protective Service spokesperson said, "The father is middle-aged and the mother definitely underage. We are checking with officials in Nazareth to determine what their legal relationship is.

Joseph has admitted taking Mary from her home in Nazareth because of a census requirement. However, because she was obviously pregnant when they left, investigators are looking into other reasons for their departure. Joseph is being held without bond on charges of molestation, kidnapping, child endangerment, and statutory rape.

Mary was taken to the Bethlehem General Hospital where she is being examined by doctors. Charges may also be filed against her for endangerment. She will also undergo psychiatric evaluation because of her claim that she is a virgin and that the child is from God.

The director of the psychiatric wing said, "I don't profess to have the right to tell people what to believe, but when their beliefs adversely affect the safety and well-being of others - in this case her child - we must consider her a danger to others. The unidentified drugs at the scene didn't help her case, but I'm confidant that with the proper therapy regiment we can get her back on her feet."

A spokesperson for the governor's office said, "Who knows what was going through their heads? But regardless, their treatment of the child was inexcusable, and the involvement of these others frightening. There is much we don't know about this case, but for the sake of the child and the public, you can be assured that we will pursue this matter to the end."

HT: Overlawyered.

But since they don't, I'll wish to you and yours a safe and Joyous Christmas. Like John Fischer once said, the God of all creation in messy diapers! To quote from one of my favorite movies, it's "Inconceivable!"

How To Comment On Weblogs

Gina Trapani at Lifehacker has a pretty good guide to making comments on weblogs - from what I've seen, there are a lot of folks out there who could benefit from reading it (not you, of course, but you may know someone who could use it). If you're too busy to read it, here's the "Cliff Notes" version:

• Stay on topic
• Add something to the discussion
• Don't comment just to make a comment
• Know when to comment, and when to email
• Don't be a know-it-all
• Make the tone of your message clear
• Own your comment
• Be succinct
• Cite your sources
• Be courteous
• Don't post when you're angry, upset, drunk, or emotional
• Do NOT feed or bait the trolls
  

There's much more there - click here for the whole thing.

Now They Can Tell You're A Dog

There's an interesting piece at MSNBC.com about anonymity on the Internet. There's an old (at least in nerd years) saying that "on the Internet, no one can tell you're a dog". According to the MSNBC piece, that could soon be changing. Newer computers will likely come with a non-removable chip called a Trusted Platform Module, or TPM:

...by the end of this decade, a TPM will almost certainly be part of your desktop, laptop and even cell phone.The TPM chip was created by a coalition of over one hundred hardware and software companies, led by AMD, Hewlett-Packard, IBM, Microsoft and Sun. The chip permanently assigns a unique and permanent identifier to every computer before it leaves the factory and that identifier can'’t subsequently be changed. It also checks the software running on the computer to make sure it hasn't been altered to act malevolently when it connects to other machines: that it can, in short, be trusted

So, the days of the totally anonymous Internet interactions may be coming to an end. It will be interesting to see how this plays out. I can easily see civil libertarians getting all lathered up over the loss of anonymity. I can also imagine a couple of other things happening - there will be programs developed that can mask a computer's ID, or a market might develop for machines without the chip.

But the question would then be, if you had a chance to reveal or mask your identity (and people could know that you're masking it) would they treat you differently? I know that when a call comes into our house where caller ID is blocked, we often don'answerer it, assuming that it's telemarketerer.

Here's the MSNBC article.

Done!

Ah. Just handed in my grades for the semester. Now it's time to take care of the matters left undone due to the general end-of-semester madness (like shopping for Christmas swag for the members of the Unknown Household).

It's still early - there's still 4 shopping days left.

But first, time for my traditional end-of-semester celebration meal of sushi and a margarita. After all, traditiona are important.

This Week's Carnival of Personal Finance

This week's Carnival of Personal Finance is up at Political Calculations. Like the last time he hosted it, he's done a great job of presentation. Here are my picks of the week:

In Family Tax Advice, Don't Mess With Taxes gives some year-end tax planning advice.

The Common Room provides some guidelines and danger signs that you might want to look at if you're a young couple just starting out in Greasing the Rungs on the Ladder of Life.

Dan Melson of SearchLight Crusade schools us on negative amortization loans in Regulators Toughen Negative Amortization Loans?

In one of my favorite recurring topics, Million Dollar Goal explains What Is the Efficient Market Hypothesis? what's more, he tells you why you should care and how it should effect your investing decisions.

Jonathan at MyMoneyBlog is going to try a free financial planning consultation with Ameriprise Financial Advisors. He wonders about their qualifications in What Does It Take To Work At Ameriprise Financial?. Full disclosure - I used to work at one of their predecessor companies 20 years ago.

Finally, Consumerism Commentary talks about how companies often give employees extra time to plan their year-end flex spending account activities in No Need to Panic About Flex Spending Accounts.

That's all for now. After you read these, take a look around the Carnival. Tastes and needs differ.

This Week's Carnival of The Capitalists

This week's COTC is up at Coyote Blog. In addition to hosting the Carnival, he's also taking the opportunity to showcase some of the Acme Company's products from RoadRunner/Coyote fame - very nice. As usual, here are my picks:

Anita Campbell at Small Business Trends is doing her annual trends series. She relays her conversation with futurist Watts Wacker and his forecast of trends we can expect to see in 2006.

Free Money Finance gives you 10 questions you should be asking about your retirement.

Here's one for the kids (in the hopes that they'll avoid some of the mistakes we made): Why Homeschool talks about early economics training for your kids, and gives some approaches for teaching them outside of the classroom.

Searchlight Crusade discusses privacy concerns over real estate and mortgage forms. He explains why (unfortunately) we don't have much choice about disclosing the information.

Retired at 30 announces the brand-new Carnival of Investing. It's focused on investing and personal finance. Be sure to check it out.

David Porter breaks down ARMs - Adjustable Rate Mortgages. It's useful information, particularly since interest rates are rising.

Financial Options has a summary of economic indicators for release next week, with commentary.

James Hamilton in Econbrowser takes another stab at the gas price "gouging" meme - as always, worth a read.

Finally, for all you "word nerds" like me, Wordlab looks at politically correct alternatives to "Christmas"

Look around - there's always lots of good stuff at the Carnivals.

Good Cartoon For Class

Here's a good cartoon to show the students before final exams:


HT: Bitch Ph.D.

Buying Used Gift Cards

I'm often amazed at how the Web has changed commerce by breaking down geographical barriers to trade (like eBay). Here's the latest - there's now a market for buying, selling, and trading gift cards.

They've been sold on eBay for some time, but according to a recent New York Times article, Several companies (cardavenue.com and SwapAGift.com, and Gift Cards Again are mentioned in the article, but there are others) have set up an online market for people to list gift cards for sale (or to swap) for stores ranging from Home Depot to Borders Books to Bed and Bath). The economics of the market are interesting, and pretty much what you'd expect):

• Transaction fees are paid by the sellers, and are usually a couple of bucks.
  
• The discount for the cards (the difference between the face value of the card and the offering price) is smallest for stores like Wal-Mart and Home Depot, since almost anyone can use cards at these stores. For less well know stores, there's a thinner market, so the discounts are larger. In fact, the Home Depot ones are often bought by contractors, who will certainly use them quickly.
  
• Most of the non-"top tier" store cards come at about a 10-15% discount.
• The best deals (i.e. the biggest discounts) come right after the big gift-giving holidays, like Christmas, Valentine's Day, and Mother's Day. Not too surprising, since the supply is greatest then.
  

Click here for the full article. And here for another article on this phenomena on MSNBC - it lists a few other sites and also discusses some potential problems with this practice.

Given the amount of use we get out of Barnes and Noble and electronics and toy stores, the Unknown Household will probably save some money by using these sites.

Failure, Secret Grades, and Incentives Matter

Since it's the end of the semester, I'm still dealing with grading exams (one full-blown one to grade and one multiple choice one to give and grade). So, I figure it's only a half-dozen more hours or so to go.

In the meanwhile, here's a good grade-related piece from BusinessWeek Online. It turns out that many of the top business grad schools either don't disclose students' grades or give the students the option of disclosing or not.

The practice started during the dot-com boom when students had their pick of jobs even without disclosing grades. Now, it gets rationalized in the usual ways - "it saves them from stigma", "it allows them to experiment without penalizing them", and so on.

The interesting thing to me is the unexpected effect that the policy has on performance - in cross-listed classes (those where both undergrads and grads can register), the undergrads often outperform the grads. Not too surprising - remove the sting of failure, and there will less effort on the part of the students.

So once again, incentives matter. Or, as Spenser (the Robert Parker detective) used to say, "Without death there is no beauty".

HT: Division of Labour

Three Economists Get Into A Cab

This sounds like the beginning of a joke:

Three economists get into a cab. They're each getting off at different places along the route. How should they split the bill?

It's not a joke but an everyday numbers dilemma, and it highlights some important economic principles. I asked several economists to solve the problem, and they came up with some unique approaches. One called on the work of game-theory pioneer John Nash (the inspiration for "A Beautiful Mind") to divide up the bill. Another referenced the ancient Jewish legal text, the Talmud.

It's actually the beginning of a piece in the Wall Street Journal by Carl Bialik (The Numbers Guy). It's an interesting question, since there's a savings to be had by cooperating (the cost of sharing the cab is less than the total costs the three economists would pay if they took separatecabs. Here's the question:

For the sake of this column, we'll stick with the case of a cab running on a meter, and we'll assume that all of the passengers are traveling in the same general direction -- some just live farther from the starting point than others. It's easy to apply the sharing schemes we devise to more complex scenarios.

Let's say that passenger A's usual fare would be $1, passenger B's is $5 and passenger C's is $9. If all three share a cab (and assuming A and B are allowed to hop out on the way to C's destination, without incurring any special fees), the total bill would be $9 -- rather than the $15 they'd have to pay, total, to ride alone. How should they divide up the cost of the shared $9 ride? Or, put another way, how do they share the $6 of total savings?

Before you check out the proposed solutions, what do you think is the fairest solution. Then read the article here (note: online subscription required).

As an aside, Yale's Barry Nalebuff (one of the economists mentioned in the article) has an excellent non-technical (i.e. almost math-free) book with Arvinash Dixit on game theory called Thinking Strategically: The Competitive Edge in Business, Politics, and Everyday Life. If you'd like to get a taste of what game theory's all about, it's as good an introduction as you're going to find.

WSJ.com - The Numbers Guy

Help Santa Fly

Here's something to brighten your day - see how far you can fling Santa across the ravine.

HT: Normblog

Weapon Retention Failure

And now that my latest exam is done, it's time for something completely unrelated to finance (but still pretty funny). I don't know if this is real or a very clever fake.

Weapon Retention Failure (From Uncommon Descent): "

It's Exam Week, and the Fat Lady's Clearing Her Throat

As I mentioned in a previous post, this is exam week. I've given one, and am currently giving a second one as I write.

The exam is an open-book exam for my Advanced Financial Management class. The class is about 70-80% case based, so an open book doesn't help the students as much as they think. But, they like it and I don't have to monitor them that much, so there's more time for blogging and other things during the exam (we have Wi-Fi throughout the college of business building, so access isn't a problem).

Only this exam to grade and one other to write, and it's time for a break. One of our two cars is on the fritz. We plan on ditching it (a story for another day) but won't be replacing it until after the holidays, so we get a pass on traveling north to see the family over the holidays. Instead we'll stay here and host a meal for some of the "orphans" (singles and childless couples without family in the area) from our church. In addition, the Unknown Mother In Law and Unknown Father In Law are coming to visit us after New Year's.

With all this, I'll still get a lot done, which is important since I'll be presenting a paper in January that still has a lot of work to be done before it's finished. As hard as I try, I can never get as much done on the road as I can at home.

That's all for now - time to make a short strafing run around the classroom.

This Week's Carnival of Personal Finance

This week's Carnival of Personal Finance is up at Wealth Junkie. Here are my usual picks of the week:

First off, there a couple of good tips on saving money on various purchases: In Deals, Josh Cohen at Multiple Mentality shares how he got some laptop accessories at a great price, and in Money Saving Tip: Buy Parts Yourself and have Mechanic Install Them, 2million shares how he shaved 63% off his car repair costs.

Next, there are a couple of good posts on electronic banking: ncnblog from No Credit Needed explains the process of online bill paying and shares some tips in Online Banking Questions Answered. In addition, TT from Retire at 30 shares how you can use electronic banking to cover all of your financial bases in Budgeting Made Easy 1 of 4: Electronically Pay Yourself First,

Third, there are a couple of good retirement-related posts: FMF at Free Money Finance discusses some key retirement planning issues in 10 Things You Should Ask Yourself About Retirement, Part 1. And, Amit at Not Broke looks at the features of Roth IRAs, in Roth IRA--one of the best retirement planning vehicles around.

Finally, Ironman at Political Calculations celebrates their one-year blogiversary by posting a master index to all the investing, personal finance, economics, politics and other unique tools its created over the past year in A YearÂ’s Worth of Tools. Lots of good stuff there, and kudos to Ironman for all his hard work.

As usual, check around - there's always lots of good stuff up at the Carnival.

Slogging Towards The End Of the Semester

Almost done - I just finished tabulating the grades for my principles of finance class - I give four small to medium sized exams during the semester, with the last one being given on the last day of classes. In addition, there's a cumulative final, which is given next week.

I count the four highest exam scores (in other words, I drop the lowest exam, which could conceivably be the final). So, the students need to know their grades in advance of the final to decide if it's worth their while to prepare for and take the final.

Since the poorest students can't seem to figure out their grade on their own (big surprise there), I calculate all the grades, their final grade if they don't take the final and what grade would be necessary on the final in order to move them up to the next grade. It may seem like it's not my job, but I've found that doing it this way saves me far more time answering the "how do I figure out what I need on the final" questions.

However, within an hour of posting the grades, I got five (out of fifty students) emails asking how I calculated the grades. And this is after going over the calculations at least four times in class , with examples.

I'll just keep clicking my heels and repeating to myself, "there's no place like winter break...there's no place like winter break...).

The Chronicles of Narnia

The Unknown Family just got back from seeing The Chronicles of Narnia. All agreed that it was one of the best films we'd ever seen. Part of that is our love for the original books, but even if we weren't familiar with them, I think we still would have loved it.

We read The Lion, The Witch, and The Wardrobe to The Unknown Son and the Unknown Daughter about three months ago, and they were captivated by the story (although I translated a lot of the British verbiage on the fly so they would be able to get it). I still remember their expression when Aslan died - they were shocked, saddened beyond belief, and thoroughly taken in by the story. That night was the only night I read more than one chapter, because sending them to bed after Aslan's death without learning of his resurrection would have been too cruel (and a sure-fire way to bring on nightmares.

Their reaction to learning of Aslan's resurrection was even more marked than their sadness at his death. It showed the power of a good story.

Even though they were familiar with the story, we all had a good cry in the movie when Aslan was killed, and the kids started applauding when he rose again.

I would caution you about taking very young (or very sensitive) children. Although they were well prepped for it, the Unknown Daughter (age 5) was very frightened and sad during Aslan's death scene, and the Unknown Son (age 7) was too. Some of the battle scenes were also pretty intense.

This will definitely be one for the DVD collection. The writers, director and producers did C.S. Lewis proud - while some of the details were changed from the book, the film was definitely true to the spirit of the book.

We're now a couple of chapters into The Magician's Nephew, the second (or first, depending on which chronology you use) book of the Narnia Chronicles, and the kids were upset that we got back from the movie too late to read another chapter tonight. I guess there's no such thing as too much of a good story where my kids are concerned.

Calculating and Understanding Real Interest Rates

Mike Moffatt at About Economics has a great post on Calculating and Understanding Real Interest Rates. It's an easily understood, low-tech primer on the topic - suitable for handing out to an undergradute class when covering interest rates.

More Interviewing Advice

The other day, I gave some advice on how to handle "fly-back" interviews for academics. Here's some additional advice from the Wall Street Journal on how to handle "thank you" letters. While my previous post was geared primarily towards academic jobs, this one works for ALL job applicants. In summary, the article advises

1. Proofread beyond just spelling and grammar. In particular, if you're interviewing with multiple organizations, make sure you're sending the right letter to the right organization.
2. USe the follow-up letter to reiterate your best qualities. This a good chance to refocus the employer on what your comparative advantages are.
   
3. Show off your listening skills. If you've taken good notes during the interview, you can match your follow up letters to the points mentioned in the interview.
4. Tap into the employer's culture, but keep it professional.
5. Write a separate letter to everyone you meet. Again, here's where taking notes is so important - these shouldn't be "boilerplate" - each letter should be individualized (they often get compared).

These are all excellent pieces of advice -- click here for the whole thing (online subscription required).

I'm always amazed how so many people fail to take care of the "little" things like good followup letters. They're actually not little things at all, because they have a major impact on the impression we make (and that's a huge part of getting the job).

This Week's Carnival of Personal Finance

This week'’s Carnival of Personal Finance is up at Frugal Underground. As usual there are a number of good posts. Here are some that caught my eye:

Canadian Capitalist tells us To Not Diversify is Just Stupid“. Based on the theory of efficient markets, I'd have to agree.

Tracy of Healthy, Wealthy, and Wise puts her money where her values are with Socially Responsible Investing“. Many people go this route, but be aware that there's a lot of research that shows that socially-responsible investment funds underperform the market. That's not to say that you shouldn't go this route, but that there is a trade-off.

Foobarista of Foo Bar and Grill just got a nice surprise in 403(b) found money: does this happen often?“. Here's some information on finding unclaimed property that might give you some happy surprises, too.

Most of know we should be planning for retirement. JLP of AllThingsFinancial has been reading Eisenberg'’s book The Number. Here he provides a look at the connection between “Inflation and Your Retirement Plan. I also just got a copy of the book (they're marketing to bloggers), and I'll be making comments in the near future.

Buying "scratch and dent merchandise can save you a lot of money. Mbhunter of Mighty Bargain Hunter recently got a good deal on a dryer in “Scratch and dent dryer.

David Porter of Pacesetter Mortgage Blog looks at three ways that people deal with their home equity in “Will Americans Spend the Wealth Created by the Housing Bubble Boom?“: 1. Do nothing; 2. Spend it; 3. Invest it.

Dan Melson of Searchlight Crusade takes on the task of “Debunking The Fallacy of Index Funds.“ He provides some good points, but I still think that index funds are far and away the best route for the vast majority of investors. It's not that index funds are perfect -- just better than anything else.

That's all for now - this should keep you busy for a while. As usual, look around - there are a lot of other posts up at the carnival that are also pretty good.

This Week's Carnival of The Capitalists

This Week's Carnival of the capitalists is up at Techronization. There's a lot this week - here are the finance/econ related ones that caught my eye:

Solitaire Trader shows us How to Watch CNBC

Financial Options tells us about The Week Ahead in Finance and Economics News, with some news about a new housing index that looks pretty interesting

Coyote Blog thinks we should Let GM Die. (or at least that it's o.k. if it happens)

Econbrowser gives us his thoughts on the last few week's economics news in Facing the Latest Economics Data. General advice - when Hamilton writes, it's usually worth a read.

Searchlight Crusade tells about the Three Day Right of Recission in home equity refinancing.

View From A Height has noticed that companies are Awash In Cash, and wonders about the implications.

Abnormal Returns chimes in about the frenetic hunt for alpha.

Political Calculations has yet another calculator application - this one calculates Return on Invested Capital.

The Entrepreneurial Mind shows us how Sarbanes Oxley has far-reaching effects in The Big Chill of SOX Hits Even Small Businesses.

Free Money Finance looks at how the pros keep their funds in Where the Pros Stash Their Own Dough

The Real Returns doesn't think the market is overvalued (or undervalued, for that matter) in S&P 500 Earnings Estimates For 2006.

Unexpected Office "Visitors"

And now for smething completely different:

This may be one of the funniest things I've read all semester (compliments of Acephalous). I particularly liked the guy's reaction and the suggestion in the comments about the use of pepper spray.

Caution: May not be office safe due to impolite language.

Advice on "Fly-Back" Interviews For Academics

This is the time of the year when finance faculties are inviting job candidates out for campus visits. Apparently, the law school hiring cycle is similar to the finance calendar. Brian Leiter has some good advice for candidates on his blog. Since most of it is applicable regardless of your discipline, I'll summarize it below and also add a few lessons I've learned over the years:

• Don't show any hint of an attitude. Even so-called "lower-tier" schools often have people from very good schools on their faculty. And even if the faculty isn't from a top school, many are doing good work. So, lose any and all hints of an attitude -- after all, who wants a colleague that's full of themselves?
• Work very hard on putting your presentation together. It shouldn't consist of you reading your paper to the audience (they can read for themselves). Expect interruptions during your presentation - how you handle them is important, since it gives the faculty an inkling as to how you'll be in the classroom. When you're asked a question, if you're not sure what the questioner is asking ask for more information. Remember -- in many cases, it's not so important WHAT you answer, but HOW you answer. Again, lose the attitude.
• Assume that even lower-tier schools are interested in your scholarship. Have an answer prepared for the "what's next in your research program?" question.
• Don't blow off the student interview - it won't get you the job if you ace it, but blowing it (again, watch the attitude) can cost you the job.

Click here for the whole thing.

In addition to Brian's points, I'll add a few practical hints I've picked up over the years:

1. Try to get a good night's sleep two nights before the visit. You probably won't sleep much the night before, and this will keep you from getting too sleep deprived.
2. Make sure you have a schedule for the visit as soon as possible. Carefully research the backgrounds of the people you'll be meeting with. It's o.k. to ask the department chair (or the chair of the recruitment committee) for copies of the vitas of the faculties. Remember - you're also deciding if you want THEM as colleagues.
3. Be prepared to ask questions of the faculty you're meeting with about their research (see #1). Open-ended ones are best - some I've used are "how did you come up with that idea?" and "what are you working on now?". Getting the faculty to talk about their research is very flattering, and makes you look like a good conversationalist. After all, most people's favorite topic is themselves.
   
4. Be nice to the department secretary - she often wields a lot more influence than you can imagine. I know of one candidate who got his current job in part because of the glowing recommendation of the secretary (the other candidate was a jerk, and he was very nice and appreciative).
5. If possible, schedule breaks during the day. It's hard to look impressive when your legs are crossed because you have to go to the bathroom!
6. When you have a spare minute, take notes on what you discussed with the various faculty. Over the course of the day, you'll forget things if you don't, and these notes will come in handy when you write your thank you notes.
   
7. While you're there, make sure to ask what the department's time frame is (i.e. where are you in the order of visits, where do things go from here, etc...).
   
8. If you're asked for salary requirements, don't give a direct answer. I've usually use humor and say, "I currently make $___ as a grad assistant, so my opportunity costs are pretty low. I'm sure you'll make a fair offer"
9. If you go out for a meal, opt for things that don't take too much attention and are least likely to spill.
   
10. Don't relax until you're on the plane on the way back. I once lost a job (I think) because of casual comments I made with the department chair at the airport waiting for my flight.
11. While on the plane on the way back home, review your notes and take a few more (see #5).
    
12. Get your thank you notes out as soon as you get back home. Use the info you wrote notes on, and try to personalize them if possible.
    
13. Take your suit to the cleaners and shine your shoes as soon as possible. If you might be getting multiple fly-outs, this saves time, and gives you one less thing to worry about.
    

In summary, the faculty at the school is trying to see if you're the kind of person they'd like to have around for the next 15-20 years. So, being a good colleague counts for a lot.

Comments are open.

The Radical Guide to Credit Cards

It's the holiday season, so it's also the time to think about credit cards. This time of year, there's always the temptation to buy "just one more present". So, a good number of people begin the new year burdened by too much credit card debt. David Jackson (founder of the Seeking Alpha blog network has an outstanding piece on all things credit card related, called
The Radical Guide to Credit Cards. Here are some of the areas the guide covers (there's a lot more, but this should whet your appetite):

Quick Quiz: What kind of credit card user are you?
How to avoid overspending with credit cards
How to avoid borrowing from credit cards
Never pay credit card fees again!
What if you get hit with credit card fees?
The 4 steps to getting the most out of your credit cards

It's definitely worth reading. My impression is that improper use of credit is one of the areas where many (if not most) people make financial mistakes.

20,000 Hits!

Financial Rounds got it's 20,000th hit sometime last night. I'm definitely small fry in the grand scheme of things, but I'm happy. Thanks for all your support.