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Wednesday 617

  Mostly summarized from Gregory Mankiw’s Principles of Economics, 5th Ed. PART 9 The Real Economy in the Long Run Chapter 27 of 36 Basic Tools of Finance Section 7 of 16 … Here we consider three aspects of risk aversion 1· insurance markets 2· diversification 3· risk-return trade-off … 1-Insurance markets One way we deal with risk is to buy insurance. The general feature of an insurance contract is a person facing a risk pays an amount of money to an insurance company which then agrees to accept all or part of the person’s risk. Every insurance contract in a sense is a gamble. It is possible you won’t be in an auto accident, your house won’t burn down, and you won’t need expensive medical treatment. To have a profitable business, the insurance company is counting on most people will not make claims on their policies. … From the viewpoint of the overall economy the role of insurance is to spread risks around. Having fire insurance does not reduce the risk of losing your home in a f...
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Tuesday 616

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  Mostly summarized from Gregory Mankiw’s Principles of Economics, 5th Ed. PART 9 The Real Economy in the Long Run Chapter 27 of 36 Basic Tools of Finance Section 6 of 16 ... Figure 1 – The Utility Function The utility function shows how utility, a subjective measure of satisfaction, depends on wealth. As wealth rises the utility function curve becomes flatter reflecting the property of diminishing marginal utility. Because of diminishing marginal utility a $1,000 loss decreases utility by more than a $1,000 gain increases it. … There is much risk-taking in life. When skiing, you risk falling and breaking your leg. When you drive a car, you risk a car accident. When you put savings in the stock market, you risk a stock prices fall. The rational response to risk is not to completely avoid it but to evaluate it in your decision making. … The meaning of risk-adverse is not just we dislike bad things happening to us. It means we dislike bad things more than we like comparable good th...
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Monday 260615

  Mostly summarized from Gregory Mankiw’s Principles of Economics, 5th Ed. PART 9 The Real Economy in the Long Run Chapter 27 of 36 Basic Tools of Finance Section 5 of 16 … Compounding and the Rule of 70 Country A has an average growth rate of 1% per year, and Country B has an average growth rate of 3%. This two percent difference might seem insignificant. Small yearly percent growth rates become large after compounded over many years. Suppose Jerry and Elaine take their first jobs at the age of 22 and both earn $30,000 a year. Jerry lives in an economy where GDP and incomes grow at 1% per year. Elaine lives in one where GDP and incomes grow at 3% per year. Forty years later both are 62 years old. Jerry earns $45,000 yearly. Elaine earns $98,000 yearly. The difference of 2 percentage points in the growth rate has made Elaine's salary more than twice Jerry's. … “The rule of 70,” helps to understand growth rates and the effects of compounding. According to the rule of 70 · if som...
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Scot and Fumiko pictures and information

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  Fumiko Scot's information: Weight at 166 pounds, got to 160 pounds five years ago and have recently been bouncing between 163 and 168. Common sense ways to lose and keep off weight are eat right and light and get lots of exercise. Main exercise is walking, do 1~2 miles most days. Over career worked as a salesman in the steelmaking, fasteners, and auto manufacturing industries, lots of travel in U.S., Canada, Mexico, and Japan. Have visited every U.S. city with a major league, MLB, NFL, NBA, NHL, sports team except Sacramento, have gotten as close as Travis Air Force Base. Often traveled on Sundays, much time on the road so could not eat right and get enough exercise so got heavy, up to 200 lbs. Was on commission and made enough to retire early, able eat good food and get enough exercise. Now spend most time reading and writing. Our Wick branch goes back to the brother of owner of the Wick House at Morristown National Historical Park in Morristown New Jersey, and on back to Staine...
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HAT Manifesto Part 1/2 - Rubric Cube - 260405 edit

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  “The world we see that seems so insane is the result of a belief system that is not working. To perceive the world differently, we must be willing to change our belief system, let the past slip away, expand our sense of now, and dissolve the fear in our minds.” - William James “All experience has shown mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed.” - Thomas Jefferson “Wherever good fortune enters, envy lays siege and attacks it. And when it departs, sorrow and repentance remain behind.” - Leonardo da Vinci “Struggle is the indispensable accompaniment of progress. If men were entirely social, man would stagnate. A certain alloy of individualism and competition is required to make the human species survive and grow. Without qualities of an unsocial kind men might have led an Arcadian shepherd life in complete harmony, contentment, and mutual love. But in that case all their talents wou...
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