April 21, 2015

We All See, Smell, Hear, Taste, and Feel the World Differently

Red Green Color Blindness

Unless you have trained yourself to think otherwise, it is a common mistake to assume that everyone sees and experiences the world the same way you do.  They don't.  There are significant implications for education, social harmony, and communication when we fail to recognize the basic truism that all external stimuli must be filtered through our individual senses, which are influenced by past events and our genetic code. We See Colors Differently Red-Green color blindness is found in 8% of w … [Read more...]

East Coast at Night from Space

East Coast United States from Space at Night

NASA has released a new image of the East Coast from space at night.  It was taken on February 6th, 2012 and the official description is: Eastern Seaboard at Night An Expedition 30 crew member aboard the International Space Station took this nighttime photograph of much of the Atlantic coast of the United States. Large metropolitan areas and other easily recognizable sites from the Virginia/Maryland/Washington, D.C. area are visible in the image that spans almost to Rhode Island. Boston is … [Read more...]

Mental Model: Economies of Scale

Economies of Scale

If you ever took an economics course, you are familiar with the concept of economies of scale.  In its simplest form, economies of scale is a phenomenon whereby the efficiency of a large scale producer allows it to spread out the high cost basis of its capital expenditures over a larger per unit basis, lowering the per unit cost.   With economies of scale, a widget that cost $1.00 to manufacture now only costs $0.10.  The concept is closely related to something known as operating leverage in fi … [Read more...]

The Best Day Ever: Making a Pink Cake and Watching a Disney Movie with the Kids

Tangled Disney Movie

Today was an absolute blast. From watching Disney's Tangled with the kids to baking a pink cake with pink icing (you can guess who chose that one), there is nothing I would have rather done. The house was packed with family for twelve hours, enjoying homemade enchiladas, a Glee marathon, good conversation, and fun games. And Tangled? The music was so good I bought the soundtrack. It was definitely the best Disney movie in 20+ years. I had more fun today than I have in ages.  Most of my family … [Read more...]

I’m Working on a Mandarin Orange, Cinnamon, and Vanilla Icing or Filling

Mandarin Orange, Cinnamon, and Vanilla Icing

I happened to go into the kitchen for something in the middle of working from home tonight when I had an idea ... an icing-based filling consisting of mandarin oranges, cinnamon, and vanilla.  I threw open the cabinets and began formulating the base.  We were so successful with the lemon zest icing for the honey and lemon bee hive cake the other day, what's stopping us from creating a whole range of flavors?  Of course, the greatest thing to ever come out of the kitchen is the Cinnabon cinnamon r … [Read more...]

Mail Bag: Why Stock Beta is Bull

Stock Beta Risk and Volatility

We are going to discuss stock beta as a risk measurement tool in today's mail bag question.  Hello, I had a quick question that, as a college student, I think would help me out in a debate I've had in a class. I mentioned in a paper that the use of beta was not logic in company valuation but the professor disagreed, and I wasn't able to fully defend my point to my liking. You've mentioned a couple of times on the site that, according to beta, a stock would be riskier at $50 than at $100. I a … [Read more...]

Mail Bag – How to Think About Business Problems (Reverse Engineering and Decision Trees)

Decision Tree by Joshua Kennon

Today's mail bag focuses on strategy, decision trees, and reverse engineering problems. Dear Mr.Kennon,  I've been reading your blog for quite some time and i find it very useful in terms of business and finance knowledge.  I'm looking to start a business.I've read one of your mail bag responses, the one about taking a small business parter for a startup. My question is, how do you structure your thoughts to come up with that answer? Especially the part where you describe how you would s … [Read more...]

The Story of Mr. and Mrs. Andrews

Mr. and Mrs. Andrews by Thomas Gainsborough

There is a painting from 1750 by artist Thomas Gainsborough called Mr. and Mrs. Andrews.  The original hangs in the National Gallery in London, England, where it has been held in collection for more than 50 years. The painting depicts a man, Mr. Robert Andrews, and his wife, Frances Mary Carter.  The two were promised to each other when Mr. Andrews was 15 or 16 years old and were married on November 10th, 1748; he was 22 years old, she was 16 years old.  Far from being a purely romantic ma … [Read more...]

A Life Lesson from The Girl Next Door

Amy Grant

Last night, I was working late and watching the most recent episode of House, M.D. on Hulu Plus.  There is a scene where an Amy Grant song plays and one of the doctors goes, "Amy Grant?  Really?".  That response mirrored the response of some music critics when she burst onto the music scene decades ago, turning out hit after hit that the general public loved.  I remember her music as an integral part of my childhood, at home, in the car on the radio ... When I was in first or second grade back a … [Read more...]

The Dangerous Trap of Bread and Circuses

Bread and Circuses

There is an old latin phrase, panem et circenses, made famous by Juvenal of Ancient Rome. “Already long ago, from when we sold our vote to no man, the People have abdicated our duties; for the People who once upon a time handed out military command, high civil office, legions — everything, now restrains itself and anxiously hopes for just two things: bread and circuses ... -Juvenal, Ancient Rome The concept of bread and circuses refers to the strategy of rulers that involves satiating the … [Read more...]