Ran into this 2004 economics paper referenced by Wayne Marr on twitter. Several quotes that jumped out at me for a variety of reasons. All economics links added by me.
“The foundation blocks of standard finance were now in place, supporting one another. Investors are rational, prices are efficient, risk is measured by beta and investors form portfolios by the rules of mean-variance portfolio theory.” (1968) (pg 6)
“…a 1929 article in The Literary Digest stated: “The first step in a safe and sane financial program is insurance”¦After insurance, the next requirement is to build up a cash reserve of at least $1,000 in the savings bank. After that, automatic thrift should be contracted for through installment savings plans, such as building-and-loan associations offer. When these fundamental steps have been taken, the investor is in position to acquire high-grade bonds and guaranteed first mortgages on real-estate. The next advance can be toward diversified preferred stocks, which offer a somewhat higher return”¦.The last step should be outright purchase of the best grade of diversified common stock.“ (p. 55).” (pg 11)
Is it just me or does that advice from 1929 advice sound a lot like the cult of, sage advice giver, Dave Ramsey? Hmmm. The article concludes
Facts I did not know then but know now show that speculators stabilize prices at some times but destabilize them at others. I have changed my mind as facts changed.
Much of finance has changed since the Financial Analysts Journal was founded in 1945, but the drive to uncover facts and make sense of them remains. Change of mind is an integral part of the process. As Maynard Keynes famously said “When the facts change, I change my mind. What do you do, sir?“
– Statman, Klimek, 2004
Some of these economics debates will never be settled. If investors are rational or normal for example. If speculators stabilize or destabilize markets.
I’d expect some economics debates will be settled sooner such as if high speed computers give an unfair advantage. Or if commercial real estate is in a bubble. What I do know is we aren’t out of the woods yet in 2009. But I have a sneaking optimism which is somewhat unlike me when it comes to our financial systems…
I posted previously on Yammer. That it was a big help for us during Hurricane Ike in 2008 in Houston. During the hurricane the ONLY thing that worked was text on the cell phone. No voice. No data plans on the cell. No land lines. Certainly no cable or dish or regular TV. Radio worked, but that is listening only. The only way to communicate person to person is by texting. Or I suppose HAM radio, but we don’t use those.
Yammer is a new company, so we thought it “broke” when the SMS portion stopped working. But then I realized they moved the “SMS feature” to a paid plan for $1 per employee per month. OK, I rolled with that. I signed up, with 25 employees that means I am spending $300 a year to have an emergency back channel to all of my employees. I’ll pay that. And I do.
Of course using a service like yammer for emergency response is problematic – because you want the emergency communication to be SIGNAL it means we can’t use the service for regular conversations as that becomes NOISE. Employees won’t tolerate 50 text messages on their cell from their coworkers. Filtering by a list, and only that list, to automatically text using a prefix like “ice:” adds complexity. And in a crisis you want things dirt simple. So our implementation of yammer is that
- Everyone gets text messages from any other employee.
- We test it once a month.
- We Pay yammer $25 a month to have this as a backup plan.
- And are quiet but confident in case an emergency comes along.
I am sure this implementation puzzles yammer. “These guys in Houston pay monthly, but never use it. What’s up with that?” So the first thing Yammer should do is have an “emergency mode” so that when turned on by an administrator EVERYTHING is sent by SMS until turned off regardless of all other settings, time of day, carrier, etc. Any messages is texted to all in this mode. If this were done we might be able to use other features of yammer.
And ahhh, about those other features. They added a bunch including now “Directory Integration” and “Priority Customer Support”. Alas, with all of these features they insisted on bundling SMS with them. And raised the price 300% from $1 to $3 per employee. No go. While their product might be worth $3 per employee for firms that use it for communication, it is NOT worth $3 per employee for a dormant backup communication system.
If anyone from Yammer is reading this, how about it? Can we have a lower cost “emergency communication” only option at the $1 price? I’d rather not change at the onset of hurricane season but I can’t justify $900 a year when there are other options on the market. And can we stop adding features that complicate the interface?
What other solutions are out there for emergency text broadcasting to a restricted list of people?