Re: Autism, brain damage and cooperation
William Dickens wrote: Come on, Fab - pointing out examples of brain differences explaining behavioral differences is hardly convincing evidence that brain differences are the right explanation in this case. Hey Bryan, don't you know the plural of anecdote is data? Seriously, there is plenty of evidence (and it is widely accepted) that injuries to different parts of the brain consistently produce particular changes in behavior. Not even Jensen would argue that g is the only aspect of neurology that matters for behavior (assuming g has a neurological basis which is not established). What is wrong with the notion that there are parts of the brain that specialize in controling social behavior and that they develop late? Nothing, if you actually have some facts about the brain to share with us. But great as we all know Fab is, I don't think his original post had any such facts to share. I don't think Fab had anymore reason to say that children's brains simply aren't developed enough to cooperate than he had to say Bryan's brain simply isn't developed enough to watch football. We know that there are some profoundly specialized cognitive abilities having to do precisely with regulating trading behavior. Maybe they develop more slowly than other aspects of personality. - - Bill Dickens Yea, maybe. But I was hoping for a less hand-waving answer. William T. Dickens The Brookings Institution 1775 Massachusetts Avenue, NW Washington, DC 20036 Phone: (202) 797-6113 FAX: (202) 797-6181 E-MAIL: [EMAIL PROTECTED] AOL IM: wtdickens -- Prof. Bryan Caplan Department of Economics George Mason University http://www.bcaplan.com [EMAIL PROTECTED] He lives in deadly terror of agreeing; 'Twould make him seem an ordinary being. Indeed, he's so in love with contradiction, He'll turn against his most profound conviction And with a furious eloquence deplore it, If only someone else is speaking for it. Moliere, *The Misanthrope*
Re: Autism, brain damage and cooperation
fabio guillermo rojas wrote: Come on, Fab - pointing out examples of brain differences explaining behavioral differences is hardly convincing evidence that brain differences are the right explanation in this case. My point is that behavior is more than cost-benefit calculations with IQ as an intervening variable. I don't see why you - Fab - would need to say this? The cognitive faculties you're talking about could simply alter the cost-benefit calculations. My purpose in citing this kind of evidence is that behavior depends on cognitive faculties which are dependent on well developed parts of the brain. Damasio's book shows some evidence that brain differences *might* lead to behavioral differences. I'm not an anatomist, but I wouldn't be surprised if children's brains simply didn't have all the parts developed for correctly learning social behavior. You should be very surprised if they lacked the parts, because children do in fact cooperate some of the time. Yes, there are cognitive abilities with low g-loading, and memory is one. But now that I think about it, I shouldn't have let you get away with citing memory differences in the first place. Children in fact seem to have much *better* memorization ability than adults in numerous respects. Prof. Bryan Caplan It's well documented that long term memory is nil for children less than five years of age (doctors call it pediatric amnesia) and is very spotty until about 12. Maybe children can remember strings of numbers well in labs, but they can't remember things from a year or two ago terribly well. Actually, I was thinking about kids' amazing ability to learn languages, which involves massive memorization. Also, while were at it, I think you overinterpret the G-loading thing. I don't. Yes, there is a complex statistical process involved in constructing g. But this construct correlates highly with our common sense understanding of intelligence. It's the natural interpretation. My whole point is that obsessing over G might lead one to ignore the stuff that leads to G. In a lot of these IQ/behavior debates people seems to take extreme positions that IQ is this all powerful explanatory device, or that it is meaningless when it's neither. Not all powerful, just one of the best available. I really think that some people are more intelligent than others and that this matters alot, but explaining everything in terms of G seems a bit dicey to me. Explaining everything - dicey. Explaining seemingly stupid behavior of children - who are already *known* to have much lower raw IQs than adults - quite plausible. -- Prof. Bryan Caplan Department of Economics George Mason University http://www.bcaplan.com [EMAIL PROTECTED] He lives in deadly terror of agreeing; 'Twould make him seem an ordinary being. Indeed, he's so in love with contradiction, He'll turn against his most profound conviction And with a furious eloquence deplore it, If only someone else is speaking for it. Moliere, *The Misanthrope*
RE: Autism, brain damage and cooperation
It's well documented that long term memory is nil for children less than five years of age (doctors call it pediatric amnesia) and is very spotty until about 12. Maybe children can remember strings of numbers well in labs, but they can't remember things from a year or two ago terribly well. And it's this long term learning that's needed for socialization. Social behavior draws from a large pool of past experience, not the short term memory tested in laboratories. If I may butt in... I'm 20 this year, but I remember as clear as yesterday when I was about 4 yrs old and my grandma was scolding me for playing in the rain. My earliest memory starts from early childhood, starting at age 3. If this may help, I have observed that I have particulary good long-term memory. (Do a real world test: ask a 7 year old about how they misbehaved two years ago. If you get anything remotely accurate, I'll buy you lunch.) I guess this means free lunch for someone. =) dianne
Re: Why do people pick stocks?
Hi All! Here are few more reasons why people pick their own stocks: 1. You can control you own taxes. There is nothing worse than buying a mutual fund right before a distribution! 2. You can easily monitor your portfolio of stocks and understand why each stock has gone up and down. To understand why SP500 went up 2% on a particular day is a bit more challenging. 3. You can sell your stocks while the market is open. If you purchase an index mutual fund you get the market close price. The exception is if you purchase an ETF (exchange traded fund) which tracks an index. In this case you can sell anytime market is open. 4. No management fees to maintain your portfolio. The average annual management feefor a mutual fund (non-index) is something like 1.35%. The annual management fee for an index mutual fund(like one based on SP500) can be as low as 0.17%. Note that commissions for buying and selling individual stocks can easily cost more than annual management fees for mutual funds. 5. And last but not least, you can talk to your friends about your winning stock picks during lunch. Vince.Do You Yahoo!? Yahoo! Autos - Get free new car price quotes
Re: Why do people pick stocks?
Ie, why do people accept lower returns just for the privilige of picking the stocks themselves? Mostly because they believe they are smarter or more knowledgable than average and will outperform the market. I know some very sophisticated people who believe this (and at least some of them have portfolios that do outperform the market on a regular basis (note that this could be endogenous)). There is another reason howevr. Even the lowest cost index mutual funds have more overhead then you are going to have if you use a discount broker and buy and hold (and they hide these costs - - I'm not talking about the loads or transactions costs you pay for some mutual funds, but the management and trading fees that get deducted form your investment each year). If your portfolio is large enough to allow sufficient diversification you can do somewhat better on your own - - particularly if you want to diversify beyond the SP500. - - Bill William T. Dickens The Brookings Institution 1775 Massachusetts Avenue, NW Washington, DC 20036 Phone: (202) 797-6113 FAX: (202) 797-6181 E-MAIL: [EMAIL PROTECTED] AOL IM: wtdickens
Re: Autism, brain damage and cooperation
fabio guillermo rojas wrote: It's well documented that long term memory is nil for children less than five years of age (doctors call it pediatric amnesia) and is very spotty until about 12. Maybe children can remember strings of numbers well in labs, but they can't remember things from a year or two ago terribly well. Bryan D Caplan wrote: Actually, I was thinking about kids' amazing ability to learn languages, which involves massive memorization. I'm told there are three kinds of long-term memory -- semantic (`the capital of France is Paris'), episodic (events personally experienced) and procedural (how to do stuff) -- and strength in one does not imply strength in another. Social cooperation depends on episodic memory, language on the other two. -- Anton Sherwood, http://www.ogre.nu/
Re: Why do people pick stocks?
Dr. Noel D. Campbell Asst. Prof. of Business Administration North Georgia College St. Univ. Dahlonega, GA 30597 (706)864-1621 [EMAIL PROTECTED] 07/13/02 09:52 AM Ie, why do people accept lower returns just for the privilige of picking the stocks themselves? Mostly because they believe they are smarter or more knowledgable than average and will outperform the market. Based on my anecdotal evidence from teaching money banking to adults, I agree with Dr. Dickens. People overestimate their own abilities and the abilities of people they know personally. We know this from other fields of study as well. The general efficiency (not to say perfect efficiency) of markets is a big component of my course. Nevertheless, every semester I have numerous students offering me hot tips, advice, etc. they created or got from a good friend. I respond with the litany of diversify, buy, hold. Students invariably reply, Yes, that's good for the market overall, but I or my friend) am really smart. While I may not outguess the market every time, I've certainly outguessed the market this time. Oddly enough, I've never had a student come see me in a later semester telling me about his portfolio's performance. Noel
Re: options for employees
1a) In the market, the owner of a stock can write a call option on stock he owns, meaning a buyer pays the stock owner a market price for the option. The option buyer is paying for the rights to the future gains from the stocks, the stock owner giving up rights to the gains. Well, you can also write uncovered options, but you're taking a potentially unlimited risk. 1b) When a firm pays an employee with stock options, A) does the firm in effect write options on stocks held by the firm, or B) does the firm create options by fiat, based on no shares? If B, the employee option owner gains at whose expense? I think it can be either. Many companies have share repurchase plans through which they repurchase stock throughout the year. They can then give this stock out to option-exercisers. Alternatively, the stock option program itself (which, I believe, must be approved by shareholders) might allow the company to issue new shares. In B, the company is (pretty much) giving away new shares and diluting the ownership of the current shareholders. This isn't really an expense per se -- handing out more shares has no effect on the profitability of the company, only on per share numbers. 1c) The true cost to the firm seems to be the market price of the option. Is this what accountants and reformers say would be charged to expenses? The treatments I've read argue that when I exercise (say) a $10 call option on a $50 stock, that should count as a $40 expense for the company, since they're giving me a share worth $50 for $10. But (see below) this disagrees with GAAP. (tangentially, accounting rules related to market values of options are a nightmare-and-a-half). 2) When the option is exercised, the option owner pays the exercise price, which I presume is usually very low. a) Does the firm typically issue new shares of stock for this sale, or b) does the firm sell shares that it buys or previously owned? In my experience it's the former, although many companies will continually buy back shares to offset the dilution. In that case it's almost a matter of semantics. Is the company issuing new shares and then buying (some of them) back? Or are they buying back shares and then handing them out? If the firm issues new shares or buys shares, it seems this is a second expense, since issued shares dilute the value of other shares, and bought shares are an explicit cost. Are newly issued shares for options exercised recorded as an expense to the shareholders? Right, but dilution isn't really an expense. Imagine that my company with 100 outstanding shares of stock suddenly issues 100 more shares to my family. That sucks for the original shareholders, but it doesn't affect the company's profits, so it's not really an expense. My accounting textbook (Meigs Meigs) says this: Notice that no gain or loss is recognized on treasury stock transactions, even when the shares are reissued at a price above or below cost. A corporation earns profits by selling goods and services to outsiders, not by issuing or reissuing shares of its own capital stock. ... if treasury shares are reissued at a price below cost, the corporation ends up with less paid-in capital as a result of the purchase and reissuance of the shares. Thus any changes in stockholders' equity resulting from treasury stock transactions are recorded as changes in paid-in capital and are not included in the measurement of net income. So even if the company has to pay $50 for a share to settle my $10 call, here's what happens: 1) company buysback share. asset CASH decreases by $50 stockholders equity TREASURY STOCK decreases by $50 2) company reissues share for $10 asset CASH increases by $10 stockholders equity TREASURY STOCK increases by $50 stockholders equity ADDITIONAL PAID-IN CAPITAL decreases by $40. the net effect is asset CASH decreases by $40 stockholders equity ADDITIONAL PAID-IN CAPITAL decreases by $40. -- If the company just issues a new share for $10, then asset CASH increases by $10 stockholders equity COMMON STOCK increases by the par value (say, $1) stockholders equity ADDITIONAL PAID-IN CAPITAL increases by the rest (say, $9) -- That's a lot of accounting mumbo-jumbo (and I'm not really an accountant, so I hope I got it right) but the key idea is that stock issuance/buyback doesn't affect earnings, in this context or in any other. And since the option exercise is just an issuance (possibly preceded by a buyback) it doesn't affect earnings. And I think I've just convinced myself that it shouldn't. :) - Joel
Re: Why do people pick stocks?
William Dickens wrote: Ie, why do people accept lower returns just for the privilige of picking the stocks themselves? Mostly because they believe they are smarter or more knowledgable than average and will outperform the market. I know some very sophisticated people who believe this (and at least some of them have portfolios that do outperform the market on a regular basis (note that this could be endogenous)). There is another reason howevr. Even the lowest cost index mutual funds have more overhead then you are going to have if you use a discount broker and buy and hold (and they hide these costs Who is the they - mutual funds or discount brokers? And how are they being hidden? - - I'm not talking about the loads or transactions costs you pay for some mutual funds, but the management and trading fees that get deducted form your investment each year). If your portfolio is large enough to allow sufficient diversification you can do somewhat better on your own - - particularly if you want to diversify beyond the SP500. - - Bill Discount brokers can really beat a .2% annual fee with no loads on either end? -- Prof. Bryan Caplan Department of Economics George Mason University http://www.bcaplan.com [EMAIL PROTECTED] He lives in deadly terror of agreeing; 'Twould make him seem an ordinary being. Indeed, he's so in love with contradiction, He'll turn against his most profound conviction And with a furious eloquence deplore it, If only someone else is speaking for it. Moliere, *The Misanthrope*
