The Big Picture

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• Parenthood and Productivity of Highly Skilled Labor
• Changes in U.S. Family Finances from 2010 to 2013: Evidence from the Survey of Consumer Finances
• 10 Monday PM Reads
• Ebola Outbreaks Map
• Misunderstanding the Magazine Cover Indicator
• 10 Monday AM Reads

Parenthood and Productivity of Highly Skilled Labor Posted: 28 Oct 2014 02:00 AM PDT

Changes in U.S. Family Finances from 2010 to 2013: Evidence from the Survey of Consumer Finances Posted: 28 Oct 2014 02:00 AM PDT scf14

10 Monday PM Reads Posted: 27 Oct 2014 01:30 PM PDT My afternoon train reads: • S&P 500′s Rise at Five Times GDP Growth Shows Recovery Is Priced Into Stocks (Bloomberg) • Hedge Funds' Assets Rise, Even as Gains Fall (Barron’s) • The Downside to Stock Buybacks (WSJ) see also Buybacks are a Capital Structure Decision not an Investment Decision (Expecting Returns) • This stock market index is almost like a crystal ball (MarketWatch) • Why the Eurozone suffers from a Germany problem (Mainly Macro) • Law Lets I.R.S. Seize Accounts on Suspicion, No Crime Required (NY Times) see also Millions Of Americans’ Wages Seized Over Credit Card And Medical Debt (NPR) •  One Percenters Drop Six Figures at Long Island Mall (Bloomberg) • Corporate America starts to spend again (FT) • Car dealers are awful. It’s time to kill the dumb laws that keep them in business. (Vox) • China's Submarines Add Nuclear-Strike Capability, Altering Strategic Balance (WSJ) What are you reading?     Amazon’s Spending Leads to Biggest Quarterly Loss in 14 Years Source: WSJ

Ebola Outbreaks Map Posted: 27 Oct 2014 11:30 AM PDT Source: The Economist

Misunderstanding the Magazine Cover Indicator Posted: 27 Oct 2014 07:30 AM PDT One of the more infamous and misunderstood market signals is the magazine-cover indicator. Created by Paul Macrae Montgomery, this contrary indicator essentially tells us when some investment theme or fad has reached a crescendo. The thinking goes that by the time the editors of Time find out about some hot investing trend, it is all over but the crying. As Montgomery described it, there are three primary rules for the classic magazine-cover indicator. First, it must be a mainstream — not business — publication that put a specific object on its cover. Second, we are looking for a well-understood concept that is reaching a climax. And third, there must have been significant asset-price gains leading up to the cover. As an example, consider the past 30 years of Time magazine covers as they relate to the stock market. When Time named Amazon.com chief Jeff Bezos as Person of the Year in December 1999 it marked the near top of the dot-com bubble. Nor did it do Mark Zuckerberg — or Facebook shareholders — any favors either by bestowing the same honorific on him in 2010. Back in 2005, Time gave top billing to housing. We know what followed. And, it isn’t just Time magazine, but any non-business publication. The thinking is that by the time editors at general news publications notice that an asset class has become hot, there are few suckers left to come in to drive prices higher. Consider this New York Times Magazine cover on gold in 2011 as yet another example. Continues here

10 Monday AM Reads Posted: 27 Oct 2014 05:30 AM PDT My morning train reads: • James Montier: Maximizing Shareholder Value Is The Dumbest Idea In The World (Business Insider) • My (Somewhat Tepid) Defense of Hedge Funds (AQR Capital) but see Seeking Clarity Within the Hedge Fund Mirage (Brandes Inst) • The marijuana industry could be bigger than the NFL by 2020 (Washington Post) • Housel: How to Learn From Market Mistakes (WSJ) Continues here

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