Thriving with Interest!

Every other headline I see is about something going up in price. Stories about the housing market are everywhere: Gas prices are getting crazy high: In my finance class today we talked about how other commodity prices are also surging (corn, soybeans, chicken, etc...): But don't just take it from me, none other than the biggest hedge fund manager in the world says so: Yet if you look at the official numbers, the official inflation rate is still a stubbornly low number, hovering somewhere below 2%.  That very well may the the official numbers the government throws out there, but for anyone living in the real world, we know that this is not the case. Things are more expensive now than they ever have been. Not to mention, with stocks trading near all time highs (ok they have had a little wobble recently), it's not easy investing new money in the equity market right now. With housing prices booming, it's also not easy to find a place to live at a reasonable price. With food and...

I'll skip to the punchline. The answer to the question above has to be a resounding yes.  With the news last week of David Swensen's passing, the spotlight has been shown on the outrageous nature of the endowment funds at prestigious universities. Listen, what Mr Swensen did to revolutionize the way rich universities are able to deploy their assets and grow their endowments has to be applauded. Yale is sitting on over $30 billion, Harvard on $40 billion+, and the number 10 university, Northwestern has over $10 billion. Although the elite private universities dominate the list of largest endowments, some notable public universities also have large investment portfolios, such as the University of Texas, University of Michigan and University of California (all in the top 12).  Top private universities tout how they are ready to provide financial assistance to anyone who needs it, and those same schools claim to even completely waive tuition for the lowest income households. In ad...

Let's rewind the clock back to January 2021. Aside from the fact that the US was under a serious threat of civil unrest, the biggest news story was... the rise (and rise and rise) of Gamestop. Even Anderson Cooper at CNN and other news shows which traditionally don't focus on financial stories that dominate CNBC, Bloomberg TV and the like, ran segments on Gamestop. Although I had not yet started writing this blog, I did talk about it in class and actually ran a special session at my school covering this topic. For those that either missed it or have forgotten, the quick summary is this: Members of Reddit community called wallstreetbets had caught on to the fact that Gamestop shares were heavily shorted (at the peak over 130% of the outstanding shares had been sold short). Here is the key (and a very astute observation) that was pounced on by the guy in his mother's basement, and missed by the (insert top school name here) MBA at a NY hedge fund: GME could be vulnerable to a...

(map of the audience for my Thriving with Interest! blog) I've been asked for many years now to start writing, a book, a newsletter, a blog, anything. It took me a while, but about a month ago I started posting some random thoughts that came to me from the news, the markets, or life in general. What I have learned so far is this: expect the unexpected: There are some posts that I think will catch on and have a large number of views and interaction (comments/feedback) while some of the ones that happen to come spur of the moment, with little preplanning might be sent out to the interwebs with little expectations. What has happened is this. It's impossible to predict which ones will be popular and which ones will catch on. Here are the top 5 posts as of May 8. As you can see, quite a cornucopia of topics: It's amazing how easy it is to reach a worldwide audience. Obviously the majority of my readers are located in the US. However I have 43% of the readers are not located in t...

Earlier this week I was on a zoom call with someone and the next day they were no longer with us. Tragedy can strike in an instant. Life can be so fleeting sometimes. Not so easy come, and (unfortunately) easy go. I'm no psychology expert and certainly cannot claim to be Mr Happy Go Lucky. But I was raised by a psychiatrist and have done some work on the subject of Positive Psychology. With that in mind, here are a couple of tips to hopefully maximize your happiness and wellbeing while we still have time. With your partner/boyfriend/girlfriend/husband/wife:  Express your love, early and often. Don’t be shy with words, touches, kisses, and intimate acts in the bedroom. With your children: Tell them how amazing they are on a regular basis. Focus on a specific skill, be it their sporting endeavors, musical recitals, education exploits, etc... and point out the job well done and how impressed you are with their growth. With your parents (if you are lucky to have them still around): Tha...

On his excellent website/project 1729.com Balaji Srinivasan, there is an article today that goes over the long history of founding vs inheriting viewed from multiple angles: inheriting wealth (financial), inheriting a name (tradition), and inheriting an institution ( responsibility).  It is a most interesting read. He makes the point that recently those that have inherited are on a Peleton treadmill (i.e., not going anywhere, and possibly even failing) while those that are founding new ventures are co-pilots with Bezos and Musk on a rocket to outerspace. I even like his East Coast (inheritance reliant) vs West Coast (founder dominant) and the United Kingdom vs USA analogies. All good points. I do have a quibble with his punchline/conclusion however.  Let me quote: " it is now possible to found a community, a company, or even a currency from your laptop. The next step is to make it possible to found new cities and new countries, rather than simply inherit them.  " Whilst s...

I saw this article today and naturally was drawn to it. Well as it turns out this has little to do with the underlying fundamental value of the stock, but rather with its actual price of over $400,000/share. Apparently in 2021 it is not possible for the Nasdaq computers to cope with such a thing.  What is going on?   Prior to answering that, let me tell you a little story. At the moment I am in the process of going through some paperwork which requires me to obtain old documents such as birth certificates, naturalization papers and the like. I have been dealing with various governmental agencies. And I get it. These documents were originally issued in the 1970s, coupled with the fact that there are Covid related precautions, so some delays are to be expected. However what I don't get is this. The papers I am requesting are coming from the government themselves, yet they still require manual confirmation by notaries, clerks and other officials to ensure that they are not forged...

My name is Marc Rudajev. Many of you may know me as a math teacher, others as a finance prof, some even as a soccer and tennis coach. Many of you may not know me at all. As you can see, I wear many hats here at Milken as do most of my colleagues around campus. This is my 7th year at the school, and in addition to all of these formal responsibilities I am also the parent of a 12th grader who is graduating in a couple of weeks and will soon become an empty nester. Fret not, I am certain that Milken will find other ways to keep me busy with all my newfound additional free time! Prior to coming to Milken I had an entire 1st career in finance and investing. Eventually I made the decision to try to help people in a different way, by trading in that career for the more fulfilling one of becoming a teacher.  This brings me to one of the first unique aspects about Milken. Milken’s willingness to take calculated risks and embrace unique individuals all with the primary goal of enhancing the ...

Update available here ( https://thrivingwithinterest.blogspot.com/2021/05/youve-got-to-ask-yourself-one-question.html ) In the past 5 years, admittedly a very short time period in the grand scheme of things, there have been 3 exponential moves in the Ethereum vs Bitcoin cross rate. The first was late 2016 to mid 2017, the second was in the last few months of 2017, and the third started in Dec 2020 and continues today. A picture tells 1,000 words, so here it is for all of you to see: What happened to the price of Ethereum in each instance? Dec 2016 to July 2017: $30 to $342, a cheeky 10x move Nov 2017 to Jan 2018: $330 to $1340, a nice little 4fold increase Dec 2020 to current: $600 to 3300, so far so 5x. Most of the focus in the media has been on Bitcoin and to some extent on Dogecoin. Much less has been made of Ethereum. So much good stuff is coming out from this sector of the crypto universe, namely decentralized finance (DeFi) with a quadrapuling of users over the past 12 months, ex...

  It's been a generally accepted principle that the US offers lower tax rates than Europe, which allows its citizens to choose where/how to spend their disposable income. However the recent Biden proposal will now see the average federal/state tax rates be 48% with my beautiful home state of California leading the way of course at 56.7%. Want to find out where you stand, see the graphic below: Now of course, this being America, a recent Wharton study found that the richest Americans would still be able to avoid 90% of these taxes, leaving the middle class to hold the bag. Ultra wealthy 1 - rest of America 0. What's the solution? Simplify the damned tax code. I know that won't happen anytime soon, but hopefully we can start making some steps as Biden does seem intent on doing the right thing. Suspense for everyone involved!