Results for “food” 2044 found
A Simple Strategy for High Returns?
Morgan Housel presents some interesting data at The Motley Fool but draws the wrong conclusion:
…the single best stock to own from the 1950s to the early 2000s had nothing to do with computers, or technology in even the loosest sense. It was Altria (NYSE: MO ) , the maker of Marlboro cigarettes, which returned nearly 20% a year for 50 years. During a period when new industries transformed the lives of nearly everyone in the developed world, the most money was made in a company that stuffed tobacco into paper tubes the way it had for more than a century.
…Microsoft’s profits have grown 16-fold since 1995. Yet once again, the best stock returns may surprise you. With dividends, Microsoft has returned 511% since mid-year 1995. But Clorox (NYSE: CLX ) returned 560% during that time — so bleach actually bested the last leg of the computer revolution. Colgate-Palmolive (NYSE: CL ) returned 651% over the same period, so toothpaste did, too. As did garlic powder: McCormick returned 642%. Ditto for hamburgers, with McDonald’s (NYSE: MCD ) adding a 540% gain. Hormel Foods produced a 544% gain over the same period, so Spam was actually more profitable than computers during the big boom. Our old friend Altria scored a 1,300% gain, nearly trebling Microsoft’s return.
Admittedly, I’ve cherry-picked the dates to make my point. Back up a year or two, and Microsoft wins. But the fact that any period — a 17-year period no less — can be found during which a company with a virtual monopoly on a booming industry underperforms the dullest of products is extraordinary. It also underlines two important investing lessons…
One lesson Housel draws is that “simple products that rarely change often make better investments than those undergoing breakthroughs.” Rubbish. (Did Housel even compare simple products with breakthrough products? No. He just found some winners over a particular time frame.) The real lesson is that expectations, good and bad, are baked into prices so winners and losers are always unexpected. Unless your name is Warren Buffett, you should index.
Hat tip: Newmark’s Door.
Manila notes
How the mothers talk to, smile at, and elevate their small children reminds me uncannily of Mexico. It was actually Mexico, not Spain, that ruled the Philippines for centuries. You can tell how bad the traffic or the flooding is by the clucking sounds made by the taxi drivers. There is a lot of boxing on TV, and you will regularly be surprised by which food items turn out to taste the best. Don’t rule out the baked goods or the chicken minestrone soup.
This is a surrealistic dream country, combining fractured elements of an earlier global economy in strange and unpredictable ways. If you’re not paying attention you can think you are somewhere else — Acapulco? Lima? Los Angeles? but in which years? — and yet you are regularly pulled back to the Filipino reality, if only by seeing the Chinese dragons perched in front of the Spanish colonial church. “My Favorite Things Filipino” would all be moments of disorientation. The traditional exotic spots now seem pseudo-exotic to me, at least compared to Manila, which forces you to rethink everywhere else you have visited.
Someone should write a New Yorker article about how Filipinos use music in public spaces. The mango is superb, even by the standards of tropical countries. If I lived here, I would learn how to talk with my eyebrows. They don’t like to criticize each other. Martha Stewart is brought up and discussed by high status Filipinos without irony.
The ability to appreciate the Philippines is a Turing test of some sort, but I am not yet sure for what.
300 Million Without Electricity In India After Restoration Of Power Grid
According to estimates, roughly one-third of a billion Indian citizens were left without power Wednesday after workers successfully repaired the nation’s electrical grid and brought all of its systems back online. “Since restoring our infrastructure to 100 percent capacity following Monday and Tuesday’s blackouts, vast swaths of India are now completely without access to electricity,” said the country’s power minister, Veerappa Moily, who confirmed that three out of every four residents lacked access to such basic amenities as lighting, food refrigeration, and the use of simple appliances now that the country’s grid had fully recovered. “We are currently not monitoring the situation, as everything appears to be functioning normally again in India.” Government officials also stated that the widespread power outage had in no way compromised their ability to provide adequate sanitation to 31 percent of India’s citizens.
The Onion hits on a hard truth.
How to eat well in Beijing
Look for the hutongs (traditional, alley-based neighborhoods) which are not too far from the wealthy areas, but not right on top of the wealthy areas either. At the outer “lip” of those hutongs there will be numerous small restaurants and food stands, serving a mix of hutong residents and passers-by. A typical small restaurant of this kind might have five to ten tables, plus there may be some larger establishments, comparable in size to small restaurants in the United States. There also will be dumpling, kebab, fish, and other stands facing onto the street. Eat in these places and sample as much as you can. There will be superb snacks for less than a dollar, and in the small restaurants superb main courses for less than two dollars, and in the larger restaurants superb main courses for less than five dollars.
Try an expensive place in a fancy hotel. Eat Yunnan food, preferably at a place with a fixed price menu. “Dali” is a very good one. Eat “Chinese Muslim food.” Eat Sichuan and Hunan. Don’t worry too much about duck, the classic Beijing dish is a little boring. Dumplings are better here but dumplings get only so good (which is very good indeed but the gradient isn’t that steep). Don’t neglect breakfast as an important meal.
That is how you eat well in Beijing.
Assorted links
1. Does money make us write better?
2. Is peak oil dead?
3. Interview with Enrico Moretti.
4. Ngram viewer for “Risk Management,” via Andrew Schroeder.
*Savage Continent*
That is the new book by Keith Lowe, with the subtitle Europe in the Aftermath of World War II. Excerpt:
The number of sexual relationships that took place between European women and Germans during the war is quite staggering. In Norway as many of 10 percent of women aged between fifteen and thirty had German boyfriends during the war. If the statistics on the number of children born to German soldiers are anything to go by, this was by no means unusual…
Resistance movements in occupied countries came up with all kinds of excuses for the behaviour of their women and girls. They characterized women who slept with Germans as ignorant, poor, even mentally defective. They claimed that women were raped, or that they only slept with Germans out of economic necessity. While this was undoubtedly the case for some, recent surveys show that women who slept with German soldiers came from all classes and all walks of life. On the whole European women slept with Germans not because they were forced to, or because their own men were absent, or because they needed money or food — but simply because they found the strong, “knightly” image of the German soldiers intensely attractive, especially compared to the weakened impression they had of their own menfolk. In Denmark, for example, wartime pollsters were shocked to discover that 51 per cent of Danish women openly admitted to finding German men more attractive than their own compatriots.
Nowhere was this need more keenly felt than in France…
You can buy the book here.
How to improve firms’ treatment of workers
Say a firm screws over a worker on ten dimensions at once, subject to some constraint of the worker leaving. With those ten depredations, the firm tries to extract from the worker as efficiently as possible, but again so the worker does not leave or leaves only with some lower probability.
Let’s then say the law alters one of those dimensions to favor the worker, for instance the firm cannot force the worker to consent to a body search. The firm may then increase one of the other depredations. Perhaps not for individual workers on the spot (there is “depredation stickiness”), but over time firms will fill the niches of new depredations to the maximum degree possible.
The new depredations will be less efficient ways of extracting rents than the old, which may hurt the worker. At the same time, the firm’s rate of return on enforcing depredations may decrease, which may help the worker.
The net effect is indeterminate. Note also that the lower efficiency may in the longer run limit firm entry and production, which will hurt workers and consumers (and possibly shareholders). Again, the net effect still is indeterminate but the more you think about this model the less you will see it as an effective way to help workers. You might try “regulating all ten depredations” but for that to work you also must fix the wage, and so on.
Maybe some of the model variants here will help the workers, but come on, let’s be realistic. Is it the case that the commentators have firm beliefs about these models for well-argued reasons? I don’t think so. It is more likely the case that there is a core belief something should be done, with not too much concern for the systemic effects nor with the “not totally sound but still better than what the critics are serving up literature on compensating differentials.” I am worried by the common tendency to first cite a lack of perfect competition and then assume the proverbial pony.
Here is Henry Farrell’s response to Matt Yglesias.
Fortunately there is a rather smooth path forward. Raise the utility of unemployment to workers. This could be a guaranteed annual income, better unemployment insurance, more food stamps, whatever. Call it the welfare state. Improving the welfare state will improve worker bargaining across virtually all workplace dimensions and in the longer run limit the scope of all the employer depredations.
We’re back to the point that what helps is to give people cash, or something cash-like, including when it comes to the dimensions of workplace quality. It is also a huge help to institute policies which will raise rather than lower worker productivity.
As I said before, the criticisms haven’t even yet dented the traditional economic point of view on this issue. Those criticisms are operating within the current frontier of analysis, not on it much less beyond it.
Assorted links
1. What fast food workers say you should never eat, via Chris F. Masse.
Solitary Confinement
In the United States, approximately 100,000 prisoners are kept in solitary confinement. Colin Dayan reports:
Prisoners there are locked alone in their cells for 23 hours a day. Their food is delivered through a slot in the door of their 80-square-foot cell. They stare at unpainted concrete walls onto which nothing can be put. They look through doors of perforated steel, what one officer described to me as “irregular-shaped Swiss cheese.” Except for the occasional touch of a guard’s hand as they are handcuffed and chained when they leave their cells, they have no contact with another human being.
In this condition of enforced idleness, prisoners are not eligible for vocational programs. They have no educational opportunities; books and newspapers are severely limited; post and telephone communication virtually nonexistent. Locked in their cells for as many as 161 of the 168 hours in a week, they spend most of the brief time out of their cells in shackles, with perhaps as much as eight minutes to shower. An empty exercise room — a high-walled cage with a mesh screening overhead, also known as the “dog pen” — is available for “recreation.”
These are locales for perpetual incapacitation, where obligations to society, the duties of husband, father or lover are no longer recognized. An inmate wrote me, “People go crazy here in lockdown. People who weren’t violent become violent and do strange things. This is a city within a city, another world inside of a larger one where people could care less about what goes on in here. This is an alternate world of hate, pain, and mistreatment.”
Occasionally, solitary confinement may be necessary to separate prisoners but why forbid books and newspapers? This is retribution not deterrence. Indeed, as Peter Moskos has argued, physical punishment would be a better deterrent and more humane.
Hat tip: Robin Hanson.
Richard Perle reviews *An Economist Gets Lunch*
In Commentary magazine, not on-line, I especially like the end:
The only problem with this splendid book is where to put it in one’s library, with the food books or the economic books? It’s really two books with a common quality: Thinking can make things better.
Here is a short excerpt from the review, and the gate is there for subscribers. You can order the book here.
Assorted links
Assorted links
Yana reviews the new John Goodman book
You can buy Priceless: Curing the Health Care Crisis here, her comments are under the fold…
Goodman’s *Priceless: Curing the Healthcare Crisis* is an excellent treatise on the healthcare industry and how our political solutions are making that world increasingly perverse, ineffective, and stagnant. Tyler has written before about how healthcare is one of the few remaining industries with low-hanging fruit for innovation. In my work I am consistently struck by how many great healthcare delivery ideas are illegal and Goodman showcases many examples of healthcare entrepreneurship which aren’t allowed to take off because of the regulatory environment and the entrenchment of major players.
Goodman at once lays a strong foundation for healthcare as a system “too complex for any single individual (or group of individuals) to grasp or understand” and makes a strong case for how much hubris policy has had in trying to address the problems of the industry. Herein lies the most powerful lesson of the book: while it is impossible that any entrepreneur will devise an overarching solution for our healthcare problems we have forgotten how to let process innovators test solutions and chip away at problems the way they do to roaring success in other industries.
Goodman pinpoints various turns the US has taken to bring existing private coverage and provision of services under the government umbrella. Woven together, these examples provide a vivid picture of systematically government payers have crowded out private sector solutions. This has led to stagnation while propagating the myth that the government is the only capable provider of services for everything from prescription drug coverage (with the passage of Medicare Part D) to comparative-effectiveness research ($1.1 billion allocated under the stimulus bill alone). This has led to a price system so broken that it does not exist. Goodman’s discussion of time prices exposes that we cannot simply push prices down without shifting the costs to other means of rationing. Similarly, his comparison of Medicaid to food stamps showcases how ridiculous Medicaid’s prohibitions on supplementing care with cash are, even within the internal logic of a robust welfare state.
Goodman is not shy about exposing the politics of healthcare and how it stands in the way of treating those who need care the most, including the poor and elderly, but this book is no exercise in partisanship. Rather, he homes in on one of the biggest insurmountable obstacles that the political debate brings to bear:
“Normally I do not comment on the motives of people I disagree with…Yet through the years I have discovered that the most important differences people have over health policy have little to do with facts, reasoning or logical argument. The most important differences stem from differences in fundamental world views. There are a very large number of people in this field who find the price system distasteful – at least for medical care…For well-intentioned reasons perhaps, they are emotionally predisposed to favor the suppression of normal market processes.”
Goodman has a strong grasp of realities such as the fact that many acute care services will always be sticky to being provided locally but that ambulatory and elective procedures make up the majority of the market and have the potential for reinventing how healthcare is delivered. Many will disagree with the ideas presented but the book will push the thinking of anyone involved in healthcare. This is especially true since Goodman has a thoroughgoing understanding of healthcare as an industry, a quality which most of the loudest voices in policy sorely lack.
Steve Postrel on marginalism and the paradox of higher education
Via Reihan, this is an excellent blog post. Rather than excerpt, let me reproduce the whole thing:
By now, you may be getting sick of reading articles and blog posts about the crisis in higher education. This post is different. It proposes an explanation of why students have been willing to pay more and more for undergraduate and professional degrees at the same time that these degrees are becoming both less scarce and more dumbed down. And that explanation rests on a simple and plausible economic hypothesis.
First, let me dispose of the idea that “college (and business school) is all about signaling.” The explanation I present allows signaling to represent a major part of the value of higher education, but it says that the historical increase in willingness to pay for education is not caused by an increase in its signaling value. (And the evidence for signaling or screening education premia, as opposed to human capital accumulation, is pretty thin anyway.) I’m certain signaling plays a role in creating value for certain degrees from certain institutions for certain people in certain situations. That it dominates the value proposition for college seems like a stretch.
My hypothesis is that it is precisely the dumbing down of U.S. education over the last decades that explains the increase in willingness to pay for education. The mechanism is diminishing marginal returns to education.
Typical graduate business school education has indeed become less rigorous over time, as has typical college education. But typical high school education has declined in quality just as much. As a result, the human capital difference between a college and high-school graduate has increased, because the first increments of education are more valuable on the job market than the later ones. It used to be that everybody could read and understand something like Orwell’s Animal Farm, but the typical college graduates could also understand Milton or Spencer. Now, nobody grasps Milton but only the college grads can process Animal Farm, and for employers the See Spot Run–>Animal Farm jump is more valuable than the Animal Farm–>Milton jump.
So the value of a college education has increased even as its rigor has declined, because willingness to pay for quality is really willingness to pay for incremental quality. This principle holds true in many markets. For example, a roof with mean time to failure of 5 years is a lot more valuable than one with a MTF of 2 years, but a 25-year MTF isn’t that much better than a 22-year MTF for most owners. A fuel economy increase from 12 to 15 miles per gallon is a bigger deal than an increase from 27 to 30 MPG.
Empirical points in favor of this diminishing marginal returns/reduced overall rigor hypothesis:
1. Rigor appears to be declining over time at all levels of American education.
2. Rate of return evidence classically suggests that the big marginal gains to education come from lower levels of education.
3. The median wages of college graduates have been flat, but the median wages of high-school-only graduates have gone down even more.
4. The MBA market has continued to support higher tuitions and enrollment despite the secular trend in rigor.
5. Employers increasingly favor those with more education even as they complain more about the quality of the graduates they hire.
Additional implications:
1. The incremental human capital gained from attending a (truly) better school rather than a typical school is increasing, since the additional learning is more basic (and hence more valuable) than it used to be.
2. Five and six-year undergraduate-to-masters programs should grow to accommodate those who would benefit from additional human capital.
3. More-rigorous high schools will attract larger premia (in either tuition, ability to be selective, or, for public schools, their impact on local property values), because at lower overall levels of rigor the increment of human capital is worth more.
Extensions of the logic to signaling considerations:
1. If you accept that the marginal ability and effort necessary to acquire education increases in the level of education (the flip side of the assumption about diminishing marginal payoff), then the signaling value of the typical degree is actually declining. The innate ability difference between the college and high-school-only graduate shrinks as both curricula are made less rigorous.
2. Signaling by the quality of the institution attended and the difficulty of the major subject studied is becoming more important; a very selective (or hard to complete) school or major adds back some of the lost signaling power of the typical degree.
3. We should see college degrees becoming more important in occupations that wouldn’t seem to “require” them under the old model of college, such as service staff in food service and hospitality jobs.
*The Locavore’s Dilemma*
The authors are Pierre Desrochers and Hiroko Shimizu, and the subtitle is In Praise of the 10,000 Mile Diet:
The publisher’s page summarizes it thus:
Today’s food activists think that “sustainable farming” and “eating local” are the way to solve a host of perceived problems with our modern food supply system. But after a thorough review of the evidence, Pierre Desrochers and Hiroko Shimizu have concluded that these claims are mistaken.
In The Locavore’s Dilemma they explain the history, science, and economics of food supply to reveal what locavores miss or misunderstand: the real environmental impacts of agricultural production; the drudgery of subsistence farming; and the essential role large-scale, industrial producers play in making food more available, varied, affordable, and nutritionally rich than ever before in history.
They show how eliminating agriculture subsidies and opening up international trade, not reducing food miles, is the real route to sustainability; and why eating globally, not only locally, is the way to save the planet.
I very much enjoyed reading the book, you can order a copy here. For the pointer I thank Daniel Klein.