How’s the UK doing now that has been properly governed by the pro-Hamas Labour Party for half a year? On track for success?
The last 20 years or so don’t seem to have gone well for the Brits. “Young women are starting to leave men behind” (Financial Times, September 2024) was supposed to be a feel-good story about equity (defined as “victimhood group does better than oppressor group”), but mostly the data seem to show that young people of all gender IDs earn less today than they did in the 2000s (after adjusting for the inflation that the government says doesn’t exist):
Maybe it is better in immigrant-rich London than in the left-behind Brexit parts of the UK? The Financial Times data nerd says that Londoners have gotten rich… Londoners who are landlords. Most of the urban hamsters spin on their wheels: “Londoners’ higher salaries relative to the rest of the country are ~entirely consumed by higher housing costs. 15% higher household incomes become ~0% higher after mortgage, rent etc”
All of that leads to something that I think is often under-appreciated outside of the capital:
Londoners’ higher salaries relative to the rest of the country are ~entirely consumed by higher housing costs.
Low-skill immigrants make a country rich. The UK has been at record levels of low-skill immigration for about 20 years. Now that the correct party is in power, is the UK rich or getting rich?
Happy New Year again! Let’s look at the new prices for the new year in our inflation-free economy or, at worst, our 2 percent inflation economy.
We have a United Healthcare policy for our family (two adults, two kids). The deductible/out-of-pocket limit for the family is $6,500/year, which means it would have been a skimpy policy back in the 1980s but now qualifies as luxurious. The premium is $48,312 per year, up 10 percent compared to 2024. Unlike Luigi Mangione, who wasn’t a customer of United Healthcare, we are grateful to have this small business policy because it is impossible to get Obamacare insurance that includes visits to the better providers here in Florida (e.g., Mayo, Cleveland Clinic, Tampa General, UHealth Miami). Every bill and “explanation of benefits” makes us yet more grateful for the United Healthcare policy because the document always starts with the provider trying to cheat us by charging 10-20X the fair price for a service (where “fair” = what United Healthcare has purportedly “negotiated” and what we often end up paying out of pocket because the $6,500/year limit (see above) hasn’t been hit).
Home health care aides in our corner of Palm Beach County? A 12-hour shift is now $264 ($22/hr), up 10 percent compared to 2024.
To be featured in a future blog post… a new USPS stamp thanking health care workers:
When will the USPS release a stamp honoring health insurers?
Based on Twitter and the BBC, folks in the UK are upset about “rape gangs”/”grooming gangs” in which Muslim men had sex with a lot of girls from the UK’s legacy population (“white”).
I’m surprised that people are surprised. The UK is an Islamic nation (as mentioned by hours spent in religious observance). How was an Islamic nation supposed to work without traditional Islamic cultural practices, such as (1) a ban on alcohol, (2) women and girls being fully covered (hijab and/or burqa), (3) women and girls carefully monitored by family members, etc.?
Here’s a 2023 BBC article that specifically mentions the un-Islamic availability of alcohol as an enabling factor:
It showed how the gang, comprising men of mostly Pakistani and Afghan heritage, plied girls as young as 13 with alcohol and drugs and passed them around for sex.
I’m looking at going out to California after teaching FAA private pilot ground school (free and open to the public) at MIT. Here’s a guide to what an elite is willing to pay in order to avoid sitting with the peasants for 7 hours: $700/hr. Prices as of December 19, 2024:
Some “extra room” seats are still available on this flight:
Being a supporter of the Islamic Resistance Movement (“Hamas”), UNRWA, and Palestinian Islamic Jihad in their struggle against the Zionist entity wasn’t a presidency-ending problem, but all of the examples of plagiarism were. The Crimson:
According to the Newspaper of Record (TM), the Cybertruck spontaneously combusted like a Spinal Tap drummer.
(Wikipedia says “the vehicle was discovered to be filled with firework materials and gas canisters” and, therefore, the incident could have been equally described as “a car bomb explosion”.)
In other news regarding attacks by car, the President of the U.S. says, regarding an attack by Shamsud-Din Jabbar in a rented truck on which he had mounted an ISIS flag, “The FBI is taking the lead in the investigation and is investigating this incident as an act of terrorism“:
I have been continually briefed since early this morning regarding the horrific incident that occurred in New Orleans overnight.
The FBI is taking the lead in the investigation and is investigating this incident as an act of terrorism. I will continue to receive updates…
Let’s check in with party animal SARS-CoV-2. The vaccinated masked Followers of Science in Massachusetts are currently hosting a raging COVID-19 epidemic (“Very High”) while Deplorable Florida seems to be COVID-free (“Low”). CDC data:
The Dana-Farber hospital in Maskachusetts went back to forced masking on December 23, 2024 and visitation is limited:
(If a mother of 3 kids is being treated for cancer, only 2 of the 3 kids can visit at a time and it would be best from a COVID-prevention point of view if the father (or “second mother”, since this is MA) is out of the picture.)
Separately, I wonder if these data can be trusted. I don’t want to sound like a Science-denier, but how can levels of plague in the nation’s Capital of Filth (New York) be “Minimal” while simultaneously being “Very High” in Maskachusetts, which actually borders New York and is part of a travel corridor with New York City?
So… Happy New Year and let’s note that Anders Tegnell‘s February 2020 prediction of SARS-CoV-2 continuing to thrive seems to have been confirmed. (Dr. Tegnell, MD, PhD said that SARS-CoV-2 would be with us forever and, therefore, our coronapanic measures should be ones that we were willing and able to maintain for years if not forever.)
A recent tweet from another Swedish heretic:
No-lockdown Sweden had the lowest excess pandemic mortality, but @sciam keeps lying about those that argued against school closures and other unscientific lockdowns that harmed public health.
Analysts at Goldman Sachs on Monday forecast the S&P 500’s average annual return over the last decade of 13% will shrink to just 3% in the next 10 years.
Goldman analysts forecast the S&P 500 will return an average of just 3% a year in the next decade, a far cry from the 13% average annual return of the last 10 years. That would rank in the bottom decile of comparable periods in the last century. It also puts the odds that stocks fail to outpace inflation at about 33%.
So why the pessimism? One of the primary causes for Goldman’s concern is the market’s extreme concentration, which by their measure is near its highest level in 100 years. Concentration of this magnitude, the analysts say, makes the performance of the S&P 500 overly reliant on the earnings growth of the index’s largest constituents.
The 10 largest stocks in the S&P 500 currently account for about 36% of the index, far higher than at any other time in the last 40 years. These stocks have swelled in size in large part because of their exceptional earnings growth over the last two years. The Magnificent Seven—Apple (AAPL), Nvidia (NVDA), Microsoft (MSFT), Alphabet (GOOG; GOOGL), Amazon (AMZN), Meta Platforms (META), and Tesla (TSLA)—more than doubled their earnings on a year-over-year basis in the first quarter of 2024. 2
History shows, however, that it’s extremely difficult to sustain earnings growth at that clip. Just 11% of S&P 500 companies since 1980 have maintained double-digit sales growth for 10+ years, according to a Goldman analysis. A microscopic share (0.1%) has sustained 50%+ margins for a decade.
What’s the alternative if you don’t have a direct phone connection to God to tell you what individual stocks to buy?
However, growth is expected to pick up for the “Other 493,” which are forecast to post double-digit earnings growth over the next five quarters, significantly narrowing the gap between those companies and the Mag Seven.
The market’s extreme concentration and the difficulty of sustaining earnings growth are two key reasons Goldman expects the equal-weight S&P 500 index to outperform the more widely tracked capitalization-weight, or aggregate, version over the next decade.
Historically, the equal-weight index tends to outperform the aggregate index, but the last 10 years have been a different story. The aggregate index has outperformed the equal-weight by 3 percentage points a year since 2014.
Goldman expects the pendulum to swing back in favor of the equal-weight index, which their model suggests will outperform by 8 percentage points annually through 2034, its most dramatic outperformance since at least 1980. The size of the outperformance may seem extreme, the analysts note. “However, the equity market has also rarely been as concentrated as it is now.”
The current record outperformance for the equal-weight index is 7%, which it achieved in the decades ending in 1983 and 2010. These two 10-year stretches, Goldman points out, each began when the market was at peak concentration, as it may be today.
How would it work to put together an equal-weight portfolio? Just find a zero-commission broker and buy $1000 of each of 500 stocks (total value: enough to buy a meal at Five Guys a few years from now). It would require a lot more trading for rebalance, though, than the market-weight S&P 500 because the market-weight index adjusts automatically when one component stock rises or falls. The trading could lead to tax inefficiency that would wipe out the theoretical superiority of equal weight.
One could also let someone else do the trading, and somehow this Invesco ETF (RSP) seems to have figured out how to eliminate what you’d expect to be capital gains from all of the trading.
Past medium-term performance doesn’t seem to be great for equal weight:
Perhaps from letting the Mag 7 stocks run wild, the straight S&P (light/bright blue bar) seems to have outperformed, but if we go back 21 years to the fund’s inception (2003), the equal weight index has done a little better than the S&P 500 index (on the third hand, the ETF’s relatively high expense ratio of 0.2% will wipe out quite a bit of that small superiority).
Do we feel confident enough in the market power and dominance of the biggest companies in the S&P 500 that we think they can keep growing?
What about other indices? The NASDAQ-100 is now partly Bitcoin because they brought in MicroStrategy, a Bitcoin account selling at a bit premium to the value of the underlying Bitcoins (WSJ). And there is a lot of overlap by market cap with the S&P 500 (e.g., Apple, NVIDIA, Microsoft, Amazon, Alphabet). Maybe a simpler way to avoid the concentration risk in the S&P 500 would be to buy a midcap or smallcap fund.
In early December, Richard Toh, the chief executive and investment officer for the Singapore-based hedge-fund firm Kenrich Partners, sent a four-page letter to investors.
“I have come to the realization that I am not good at what I am doing but I guess some of you may have sensed that already,” he wrote. “I am sorry I have let you down.”
“I pretty much missed all the major themes in the last two years,” Toh wrote. “I was hopelessly out of sync with the market, buying when I should be selling and selling when I should be buying. We got whipsawed several times this year even as we got some facts correct.”
“I learned from that episode that sometimes the best investments are precisely the ones you cannot explain and probably made no sense. It also told me I am getting too old,” he wrote.
(There are so many people to whom I could legitimately write “I am not good at what I am doing” that I don’t know where to start…)
Then they managed to get out of China and reached the soil of the United States, many by trekking through the brutal jungle in Panama known as the Darién Gap on their way to the U.S. southern border.
They are Hui Muslims, a state-recognized ethnic minority group in China, where the government is determined to crack down on Islam.
Deportation could mean years in jail or labor camps.
Of the roughly 25 million Muslims in China, 11 million are Hui…
Most Chinese migrants entering the United States from the southern border are released on parole by immigration authorities. Then they can apply for asylum.
Simply being Muslim in China qualifies a migrant for asylum here in the U.S. (if that were not true, the people described in the article wouldn’t be “released on parole”, assuming that our laws and regulations are being enforced). But we won’t negotiate with the Chinese to arrange an airlift via Airbus A380 of all of the Chinese Muslims who wish to take up their birthrate of American citizenship.
The NYT describes the hardship of being a Muslim migrant to the U.S., even without Trump having resumed his dictatorship:
But Mr. Ma, the founder of the shelter, said Muslim migrants faced obstacles in making lives in America. Pork dishes, which many Muslims don’t eat, feature heavily in most Chinese restaurants.
Here’s someone who has two reasons for needing asylum:
“My mother told me to stay here,” said Yan, a single mother who came to the United States in July with her 10-year-old son, Masoud, through the Darién Gap. “‘If you come back,’” she quoted her own mother as saying, “‘there’ll be no good outcome for you. Who knows — they might even sentence you to life imprisonment.’”
“It would be lying if anyone says they are not scared,” said Yan, the single mother. “Everyone is on edge.” She said she would accept being deported but would make the painful decision to have someone adopt her son, who has problems learning, if it meant he could stay in the United States.
“My son has to stay here,” she said. “Going back would mean no chance of survival for him.”
We’re informed by the New York Times that is de facto illegal to be Muslim in China. As far as I know, it is de jure illegal to be a “single mother” in China (a pregnant person who chooses to have a child outside of marriage is not entitled to avail him/her/zir/theirself of state services, such as free schools and free health care; certainly there is no way to make a profit by having a baby without being married (the American Way)).
Every time I look at an article like this I’m more confused. Why do people have to walk to the U.S. in order to be eligible for U.S. residence/citizenship? If the abuse/danger level is the same, why is a person with the financial means and health required to do the walk more entitled to live here than someone who does not have these advantages?
There’s currently a debate about whether mediocre nerds should be imported into the U.S. via H-1B or only supernerds, perhaps via the O-1 visa (both of these are “nonimmigrant” visas and yet everyone who gets one seems to end up as a permanent immigrant to the United States). The main argument supporting a massive annual influx of nerds is that Americans cannot and will not do nerd work, just as Americans cannot and will not do any hard work, which is why we need a border open to low-skill undocumented migrants.
Could the U.S. grow its own nerd supply based on native-born Americans? As it turns out, I have some experience in this area! About 25 years ago, I started “ArsDigita University”, a post-baccalaureate program in which people who had non-nerd degrees could take all of the core undergrad computer science classes in a TA-supervised cooperative open office-style environment. People just had to show up for 9-5 every day for a year and they’d come out knowing pretty much everything that a standard CS bachelor’s degree holder would know. Not a “coding camp”, in other words, but traditional CS knowledge. The big differences compared to a traditional university were (1) take one course at a time, and (2) do all of the work together in one room so that it would be easy to get help from another student or a TA.
Did it work? We ran it for just one year, but as far as I know everyone who completed the program got the kind of job that someone graduating with a CS bachelor’s would get.
As loyal readers may be aware, I’ve long been a critic of the traditional four-year college/university. Simply getting rid of summer and winter breaks would reduce the time required to get a degree and begin a career to 2.5 years. 18-20-year-olds are blessed with tremendous health and energy and shouldn’t need to take nearly half the year off. Here are some examples of my previous criticisms:
“Teaching Software Engineering” (2001), on the magic of project-based learning when the goal is to teach people how to handle engineering projects
If we’re going to cut back on H-1Bs, though, we might need to get a little more radical. Following the lead of the Germans/Swiss, we should try to set things up so that a high-school graduate is ready to begin work in the tech mines as an apprentice nerdlet. We can have some demanding career-oriented classes for smart kids where the goal is not to get into college, but instead to get a job at age 18 and continue to develop skills that are obtained via certificate programs with independently administered exams. These would be like the current Microsoft and Cisco certification programs, but with a much broader array of options, e.g., for having learned physics, math, data science, machine learning, etc. to various levels (Coursera maybe already does this). These certifications could also help older workers who’ve maintained their skills. Instead of showing an employer a 35-year-old transcript as evidence that physics and engineering classes were taken, an applicant could show the employer 6-month-old certifications that physics and engineering are currently understood.
I’m not sure what the argument, from an employer’s point of view, for the traditional 4-year-old college experience is. For the lucky kids who get to attend a top-100 school, it’s obviously great fun to hang out with friends, attend football games, have sex with a lot of different partners, and occasionally study. But how do these experiences make a person a more effective worker? I think the answer is “generally, they don’t”. One of my former neighbors in Maskachusetts spent about $1 million on private school and college for a child who is now working as a receptionist for an HVAC company in a city that is notable for its rich concentration of marijuana and meth stores. Plainly this is something that the girl could have done just as easily on graduation from high school, consistent with the book Academically Adrift:
At the heart of the book is an analysis of data from the Collegiate Learning Assessment (CLA), which requires students to synthesize data from various sources and write up a report with a recommendation. It turns out that attending college is a very inefficient way to improve one’s performance at this kind of task. After three semesters, the average college student’s score improved by 0.18 standard deviation or seven percentile points (e.g., the sophomore if sent back into the freshman pool would have risen from the 50th to the 57th percentile). After four years, the seniors had a 0.5 standard deviation improvement over the freshman, compared to 1 standard deviation in the 1980s.
Readers: Do you think employers could be talked down from H-1B and convinced to hire American 18-year-olds as apprentices who’d spend their evenings taking in-person or online classes in advanced nerdism?
Separately, I’d love to know how COBOL-coding nerds and beautiful fashion models got lumped together:
“The H-1B program applies to employers seeking to hire nonimmigrant aliens as workers in specialty occupations or as fashion models of distinguished merit and ability“
