A college education is more than classroom instruction

David MoonBlog

When I hear someone tell a young person that “college is the best time of your life,” I wince and think how sad it must be for a person’s life to peak at 22. College was fun, but, fortunately, it was not the best time of my life. It was however, the most important time in my life – a fact that had little to do with classroom instruction. Almost all the memorable value of my years in college is related to relationships. I forged lasting friendships with a number of my professors, such as Bruce Wheeler and Dick Townsend. … Read More

Lockdown effect on housing becoming more complicated

David MoonBlog

The COVID-19 economic shutdown has never been easy, but it was certainly easier in April than it is now. Initially, practically everyone was willing to sacrifice when we assumed the shutdown was a temporary measure to protect the healthcare system (“15 days to flatten the curve!”). And for many people, the early days of lockdown imposed little-to-no financial loss. In the first months of lockdown, U.S. personal income actually increased, thanks to $3 trillion in federal stimulus spending. Two rounds of Paycheck Protection Program loans helped support about a third of all jobs in the country. Unemployment benefits, aided by … Read More

Birthday presents from Warren Buffett

David MoonBlog

There were two notable Warren Buffett events on August 30. The famed investor turned 90 years old and he disclosed a $6 billion investment in five Japanese conglomerates. The move surprised many Buffett watchers, especially given his history of investing almost solely in U.S. companies. Buffett’s foray into Japan shows us that it is possible to teach an old dog new tricks, but only if the dog really wants to learn. Researchers tell us that when a person reaches the age of 25, the default condition is for the brain to become lazy. People tend to transition from being learners … Read More

The demographics of poverty

David MoonBlog

A recent KnoxNews article featured a group of Knoxville women who are working to address local poverty by helping would-be business owners access startup and working capital. I am a huge fan of small business and entrepreneurism, and I wish the ladies much success. But most not-poor people don’t get that way by starting a business. The cause of poverty is not a lack of access to capital. If not a lack of capital, what are the best predictors of poverty? Some of the answers are complex. Some are obvious. Almost all are very uncomfortable to discuss – but ignoring … Read More

Every generation questions the next one

David MoonBlog

A recent discussion between CNBC guests focused on the surprisingly healthy demand for cars in the $500,000 to $1 million price range. My first thought was that this must be a sign of the coming apocalypse. These crazy people clearly have more money than they have sense. My second thought was about the first house my wife and I purchased in 1987, specifically, my father-in-law’s reaction. He thought we were being frivolous. We were new college graduates, in our first grown-up jobs. We had saved enough for a down payment, but otherwise didn’t have a nickel to our names. My … Read More

Who should bear the cost of a public good?

David MoonBlog

I watched with passive curiosity as the Knox County Board of Health closed local bars, then allowed them to reopen with a 10:00 pm curfew. If Knoxvillians understand that our public health requires the complete or partial closure of bars, it is a great opportunity to put our collective money where our mouth is. A person may feel virtuous when he proclaims that COVID-19 is health or science issue, not an economic one, but money is simply a tool we use to express our values. Of course, this is an economic problem. For a moment, forget about infection rates, case … Read More

Everyone is a risk manager

David MoonBlog

Prior to this year, the Dow Jones Industrial Average (DJIA) had never declined more than 1,000 points in a day. Then came COVID. Within a single week in March of this year, the index dropped more than 2,000 points three times, culminating with an almost 3,000-point drop on March 16. In three miserable days, the index dropped a total of 30 percent. By the end of July, the DJIA had recovered 6,240 points, or more than 30 percent. Quiz: at which point were stocks riskier, March 16 or July 31? If you answered March 16, you don’t understand risk. For … Read More

Seeing downtown with new eyes

David MoonBlog

Because of some work being done on my house last week, I moved into the Embassy Suites on Gay Street and became a downtown dweller for 10 days. It was fun and educational, but not the least bit tempting. For 35 years I’ve had a downtown office. I parked in a garage underneath my building and eat lunch at my desk. I think I work downtown, but it’s really more like working in a studio, with Gay Street as my virtual background. I didn’t fully appreciate the difference until last week. There is a downtown energy that doesn’t exist in … Read More

Looking ahead to second quarter GDP

David MoonBlog

When the Bureau of Economic Analysis releases its first estimate of second quarter U.S. economic growth (negative growth, that is) next week, the figure will be a record quarterly decline. Other than that, we don’t yet know much about the details of the drop. The experts’ estimates, usually tightly gathered around the same figure with decimal precision, range from -16 percent to -52 percent for the three months ended June 30. That is, no one has a clue. JP Morgan’s prediction is one of dozens of examples of forecasting futility. Within a three-week period from mid-March to early April, the … Read More

Some musings about money

David MoonBlog

I’ve observed that the three most intimate things in most people’s lives are their spirituality, their sexuality and their money. And people will typically tell you what they think about God and who they sleep with more quickly than they will share their tax return. As a result, I’ve learned quite a bit about human nature in 35 years of working with people and their money. Popular opinion to the contrary, I don’t think that money is the most common cause of friction between married couples. When people fight about money, they aren’t fighting about money. Money is a convenient … Read More