Wednesday, 27 April 2011

Commodities: Gains on Fed announcement

On Wednesday 4/27, Federal Reserve Chairman Ben Bernanke made a public statement that effectively said the following: we're done buying bonds, but we don't expect interest rates to drastically change. With low interest rates comes the possibility/probability of inflation -- with this inflationary expectation, it's no surprise that commodities prices ascended. AGQ, an ETF with a bullish stance on the value of silver, saw a single day gain of over 13.5% on 4/27. GLD, a similar ETF linked positively to the value of gold, saw a more tempered (but still positive) gain of ~2% on Wednesday the 27th. The value of these instruments (and their underlying commodities) should be interesting to follow in the coming months, especially as QE2 comes to a close at the end of the second quarter.

Monday, 18 April 2011

The Default Major

A colleague just pointed out a great article in the New York Times, titled "The Default Major". Here's a few choice pieces:
Business majors spend less time preparing for class than do students in any other broad field, according to the most recent National Survey of Student Engagement: nearly half of seniors majoring in business say they spend fewer than 11 hours a week studying outside class. In their new book “Academically Adrift: Limited Learning on College Campuses,” the sociologists Richard Arum and Josipa Roksa report that business majors had the weakest gains during the first two years of college on a national test of writing and reasoning skills. And when business students take the GMAT, the entry examination for M.B.A. programs, they score lower than students in every other major.

...

Donald R. Bacon, a business professor at the University of Denver, studied group projects at his institution and found a perverse dynamic: the groups that functioned most smoothly were often the ones where the least learning occurred. That’s because students divided up the tasks in ways they felt comfortable with. The math whiz would do the statistical work, the English minor drafted the analysis. And then there’s the most common complaint about groups: some shoulder all the work, the rest do nothing.

“I understand that teamwork is important, but in my opinion they need to do more to deal with the problem of slackers,” says Justin Triplett, a 2010 Radford graduate who is completing his first year in Radford’s M.B.A. program. From his perch as a teaching assistant, he estimates that a third of students in the business school don’t engage with their schoolwork. At Radford, seniors in business invest on average 3.64 hours a week preparing for class, according to the National Survey of Student Engagement.

...

One senior accounting major at Radford, who asked not to be named so as not to damage his job prospects, says he goes to class only to take tests or give presentations. “A lot of classes I’ve been exposed to, you just go to class and they do the PowerPoint from the book,” he says. “It just seems kind of pointless to go when (a) you’re probably not going to be paying much attention anyway and (b) it would probably be worth more of your time just to sit with your book and read it.”

How much time does he spend reading textbooks?

“Well, this week I don’t have any tests, so probably zero,” he says. “Next week I’ll have a test, so maybe 10 hours then.”

He adds: “It seems like now, every take-home test you get, you can just go and Google. If the question is from a test bank, you can just type the text in, and somebody out there will have it and you can just use that.”

Let's see - the students don't study as much, they minimize effort, cheat on take-home exams, and don't come to class prepared.

These sound like things I've heard my own colleagues say in the hallways at Unknown University.

Nothing new. But somehow, there are professors in my school (several come to mind without much effort) who hold the students to high standards AND get top evaluations. The common threads in their classes is that they DEMAND that students come to class prepared and cold-call from day one. And they make classroom performance (either measured by the quality of participation or by numerous in-class quizzes (often of the unannounced, "pop quiz" variety) a major part of the grade.

Of course, they work a lot harder than the other professors in the classroom, but DUH.

Students will slack, not go to class, and cheat like crazy if all the instructor does is read off PowerPoint slides and give softball take-home assignments. They're rational, after all.

I view the course design (of which the grading scheme is a major part) as a mechanism design problem. In other words, it's an exercise in putting together a grading scheme that forces the students into behaviors that I want them to engage.

For the most part, they're rational - they'll find a way to get the grade they want while minimizing effort. The trick is to set the class up so that they can't slack. Unfortunately. that's harder than the old "30% of the class grade is based on the mid-term, 50% on the final, and 20% on quizzes" structure.

But it's possible.

Sunday, 17 April 2011

Another Good Ride

It was another nice day today (but windy as all get out). So, I did another 17 1/2 mile ride. Yesterday, my feet were freezing (it was about 50 degrees). Today, it was warmer (no need for a jacket), but the wind was brutal - over 20 mph at times.

Still, it was good, and about 5 minutes faster than yesterday for the same course. I was pretty tired after yesterday's ride, but the forecast says rain for the next few days, so I figured I'd take the ride when I could get it.

I must have gone harder than I thought, because about three hours later, I got a hamstring cramp of truly biblical proportions. Luckily, the Unknown Family was out of town, because I actually yelled (and loudly)

But given the chance, I'd take the ride again if I could. It's biking season!

Some Good Thinking

In writing this blog, I have occasionally shared one of my favorite quotes about teaching: "Teaching does not come from years of doing it. It actually comes from thinking about it.“ I bring up this quote whenever I lead any discussion of teaching. Almost inevitably, someone in the audience asks how a teacher goes about thinking about teaching. It is easy to make a joke about sitting in a dark room in focused contemplation but most of us would just fall asleep.

I believe one of the best ways to think about teaching occurs when you write an examination for your students. Since I have spent most of my current weekend writing a test, the process certainly has been on my mind.

Writing a test brings up so many questions having to do with your class.
--What level of understanding is a student supposed to have developed based on how you structured the coverage?
--What are you trying to test? What are your priorities?
--How do you write questions that differentiate between students who truly understand the material and those that don’t?
--How do you write questions that stress thinking and understanding rather that just pure memorization?
--How do you write questions that are not too vague without simply lining up the information that the students need in a tidy row?
--How much information do you provide and how much should students be able to figure out on their own?
--What exactly do you expect an A student to know?
--Or, put another way, if students were in your class and did what you asked them to do each day, could they answer each of the questions that you are posing on the test? Are there any questions that go beyond what has been covered (and, if so, does the student still have a reasonable chance of arriving at a proper answer).
--Do you want students to have to rush through the exam to complete it or would you prefer for them to be able to work at a leisurely pace?
--Do you just want answers or do you want answers with explanations?
--How much time do you want them to spend reading the test. For example, a 20-page test can have great depth but does not leave much time for actually answering questions.
--Are you asking the same thing in more than one question? If so, does the redundancy add anything to the test?
--Are you leaving out material that should be tested?

I woke up at 6:15 this morning and realized that I was lying in bed trying to figure out how to structure a question about a particular piece of material. I knew that I could ask the question in such a way that it would be overly complex and no one could get it correct. Or, I could make some adjustments and it would be too easy and every student would be able to answer it. Neither of those does me much good in trying to determine a fair grade. How should I tweak that question so that I can gauge who knows and who doesn’t know?

The material I was thinking about at 6:15 was important material for my class. How could I set up the question in such a way that the students with a deep understanding would get it correct while the students with no understanding could not get it correct by guess work or luck?

Of course, that leads to the question: How well have we covered this material? What should I expect the average student to know in order to achieve the average grade?

I know a lot of teachers use test banks produced by textbook publishers or they carry over exams from year to year. I even meet teachers occasionally who seem to be afraid of writing their own test questions. I’m honestly not sure what they are afraid of. I do know that writing a good test can take an enormous amount of time. However, nothing makes you think more carefully about what you have covered and what you wanted to cover than spending a long morning writing a test that successfully allows students to demonstrate in a fair manner what they have come to understand.

Time well spent – even at 6:15 on a Sunday morning.

Saturday, 16 April 2011

Newsletter - 1st & 2nd Volume

Hey Guys,


Check out the first two volumes of our newsletter!

See links below:

Newsletter Volume 1

Newsletter Volume 2

Costly College: More than Tuition


Think paying for tuition and rooms and board is good enough? Think again!

When it comes to paying for college, tuition and housing are just the beginning. The real catch is the supposedly trivial miscellaneous costs. These costs include cab fare, parking permits, concert tickets, eating out, shopping spree, and much more. School meals plans cannot cover all the midnight food deliveries and caffeinated beverages, just like free university shuttles cannot guarantee low transportation costs. And students often find themselves packing new clothes into their wardrobes. Now, as we approach the end of our school year, what happens to all those things that we stuffed into our wardrobes and dorm rooms? Last things on the budget, storage payments and extra shipping costs.

Read personal accounts from parents at: http://online.wsj.com/article/SB10001424052748704487904576267393582628666.html?mod=WSJ_PersonalFinance_PF4#articleTabs%3Darticle

The First Ride of the Season

Up until the last two weeks or so, I've been getting up at least 5 days a week at 4:30 and working out at the local YMCA from 5-6 (mostly spinning on the stationary bike). As a result of this and watching my diet, I've dropped about 15 pounds since the beginning of the year. So, I'm about the same weight at the beginning of biking season that I usually am around mid-Jul. I was wondering how this would translate to actually being on the road.

Today I found out - I took my first ride of the season, and went about 17 1/2 miles (about twice what I usually do at the beginning of the season). Despite the relative cold (about 52 and windy as all get out), it was pretty easy - I was able to keep my heart rate under 150 pretty much the whole way (except for the last 50 yards of a steep half-mile long hill at the 8 mile mark). So, it looks like it'll be a good riding season.

I'll be riding in the Angel Ride, a 50 mile fund-raiser for the Hole In The Wall Camp over Memorial Day Weekend, so I need to get with it. It's actually the second day of a two-day ride where they go the length of northern Connecticut (from the northwest corner to the northeast corner - about 80 miles) the first day, stay at the camp over Saturday night, and ride down the eastern border of Connecticut (northeast to southeast - about 50 miles) the second day. I'll be as part of a group that includes two guys from my weekly bible study and a lady from my wife's grief group (she lost a daughter to cancer a couple of years ago).

And finally, there's only three weeks left to the semester - yeah, baby!

Tuesday, 12 April 2011

Finance Videos Online

As I've mentioned before, I'm a big fan of using pre-recorded videos as resources for my students. I've been wondering if they would be attractive to others.

I recently came across a site called MindBites - they provide a platform for the distribution of video content online. Basically, they're an iTunes-type store for instructional videos. So, I uploaded my tutorials (so far, only the first two) for the Texas Instruments BA 2+ calculator, and priced them at $0.99 each (pretty much an iTunes model). I'm curious to see if anyone buys them.

Since I'm already putting much of my core Introductory Finance Class into short videos as a resource for my students, I'll post them to the Mindbites site as well. I figure there might be someone who's willing to pay a few bucks for (as an example) a series of 5 videos (about 3 hours alltogether of lectures on Time Value (with examples for using the calculator, the formulas, and Excel spreadsheets). If not, at least I'll have them done for my classes.

In case you're interested, the videos can be found here. If you decide to download them (the site takes PayPal), leave a review.

video

Guidance

A good friend of mine, Steve Markoff, has written an excellent essay on learning to teach by being a student. It is well worth reading at https://blogs.montclair.edu/academy/2011/04/11/being-a-student/.

Over the years, I have taken classes in everything from Russian culture and ballroom dancing to jewelry making and photography just to remind myself of what it is like to be the person in class who feels lost and confused. Many universities allow faculty members to take classes for free or at reduced prices. Put aside your fears and go sign up for a class where you are not the expert.
***

When it comes to college students, the old saying “you don’t know what you don’t know” is all too often true. For the most part, they are young people who have only seen a very narrow slice of life and, like the blind men and the elephant, they believe that the slice of life they have experienced represents the reality of life. Thus, at times, they need guidance even though they may not ask for it.

I will give my third test of the semester next Monday. I am often frustrated that grades don’t change much between the first test and the second. The students who make As and Bs continue to work well and make more As and Bs. The students who make Cs and Ds continue to flounder and make more Cs and Ds. By the time we get to the third test, I really want to see those Cs and Ds turn into As and Bs

I will often call in the students who do poorly on a test and they will eagerly confess that they are doing in my class exactly what they have always done in all of their classes. Apparently, they believe this is the one set way to prepare for a class. They then seem stunned when I respond “well, your strategy is not working very well. You need to make significant changes. Einstein said that the definition of insanity was doing the same thing over and over again and expecting different results.”

There is obviously some difference between students based on their knack for the subject matter. Some students simply see the underlying logic more easily than do other students. However, in my opinion, the biggest variables tend to be hours spent in study and the efficiency with which they use those hours. Students will resist this idea like the plague but I will ask them “if you spend three hours studying poorly and your neighbor spends 10 hours studying well, you know who is going to make the higher grade. So, don’t even try to tell me that more time studying and better spent time is not going to help you to do better.” (Students are like everyone else – what they really want is a magic bullet that will help them to do better without requiring any more work.)

Many students who struggle have two basic problems: they don’t spend enough time studying (either before class or after class) and, even if they want to study more, they are not sure how to fill up their time. I’m convinced that most classes in school (from kindergarten until they walk into my class in college) don’t teach students how to study.

So, as we approach our third test (where I’m really looking for some of those Cs and Ds to step up and turn their engine around), I do two things.

First, I suggest a very specific number of hours for them to study and urge them to keep a calendar so they know that they have studied enough. I suggest 10-12 hours for my introductory class and 12-18 hours for my upper-level class. You may expect more or less from your students but you might as well tell them what you expect. Basically, I want them to block off the week-end and immerse themselves in getting a full grasp of the material because it is rather complex.

Second, I give them specific assignments that I think will help them come to understand the material (or push them to come to me to seek help). I give them the test I gave last fall on this material along with the answers. I warn them that I am going to give them a different test but this will provide them some idea of what I expect and how I test this material. That alone should keep them busy for two hours on Saturday morning. Also, as we cover material, I will frequently send them problems by email and say “if you understood what I wanted from class today, here’s an exercise that I would expect you to be able to work.” I do provide an answer but no work. I want them to figure out where that answer came from. I am trying to give them productive ways to fill up those needed hours of study.

Having an A student make an A is wonderful but I imagine they would have done well without my help. Having a C or a D student make a C or D is frustrating but it is just one of the sad parts of this occupation. It is sad because I wasn’t able to make a difference.

However, having students start out with low grades but then having them figure out how to change the way they prepare so that they grow into an A student is my very favorite part of being a teacher. It is with those students that I feel I make a genuine difference. Learning is not magic. More time better spent can make a huge difference. Sometimes students need that guidance.

Monday, 11 April 2011

3 Years in Jail for Blogging

In Cairo, an Egyptian blogger, Maikel Nabil, was sentenced to three years in prison for criticizing the military in what human rights advocates called one of the more alarming violations of freedom of expression since a popular uprising led to the ouster of President Hosni Mubarak two months ago.
Mr. Nabil assailed the Egyptian armed forces for what he called its continuation of the corruption and anti-democratic practices of Mr. Mubarak.
Read more at:
http://www.nytimes.com/2011/04/12/world/middleeast/12egypt.html?_r=1&smid=tw-nytimes&seid=auto


Friday, 8 April 2011

Japan: No Rest For The Weary


New worries spiked after another major earthquake (7.4 magnitude) shook northeast Japan on Thusday night. The world's third largest economy, right behind US and China, has been stagnant for years and is now facing arguably the worst crisis since World War II. Besides human suffering, the country now carries heavy economic burdens as the nuclear safety hazard creates a long-term regional energy shortage. The ongoing tension in the Persian Gulf and rising oil prices only make the problem worse. With the possibility of another magnitude 9.0 earthquake and tsunami looming, according to official research, Japan's economic prospect seems rather grim and uncertain at this point.

Follow up and read more on the economic and political impact of Japan's earthquake at: http://thisbluemarble.com/showthread.php?s=036635f37dab04d7839f72114bb8b91f&t=35866

Thursday, 7 April 2011

Another Tech Bubble

Are we heading for another tech bubble? The latest technology funds and Internet start-ups have been given very substantial valuations. For example, valuations for Facebook have quintupled within the last 2 years and Groupon's estimated value increased from $1.4 billion to $25 billion.
What are the implications of this?


Read more at: http://www.nytimes.com/roomfordebate/2011/03/30/are-we-heading-for-another-tech-bubble?ref=business

Tuesday, 5 April 2011

UCONN WIns!


My undergraduate alma mater won ugly, but they won. And since it's not gymnastics or diving, there are no points for style.

I think I'll give my students a couple point bonus on their exam Thursday because I'm in such a good mood.

Monday, 4 April 2011

Looking Back: Alexi Savov

Just a recap of our event on March 24th! Alexi Savov, Assistant Professor of Finance led us through an interesting discussion on Risky Arbitrage. Although seemingly confusing (how can an arbitrage be risky?!), Professor Savov successfully guided us through the mechanics of arbitrages and their application to markets in real life.

Sunday, 3 April 2011

My Picture With Bill Walton

I just got back from the R.I.S.E. conference in Dayton. There were some pretty good sessions, and my students got a lot out of it (as usual). The highlight for me was hearing Bill Walton (the "World's Tallest Grateful Dead Fan") speak -- I grew up a Boston Celtics fan, and he closed his career (as the quintessential Sixth Man) with them.

He was an exceptional speaker - since he's only 5 years older than me, his illustrations and anecdotes were a real trip down memory lane. Also, he's gone through some major stress: he's had over 60 surgeries on his back and feet, and spent almost two years on the floor due to spinal problems. At one point, he was so depressed and in despair that he contemplated suicide. So I get where he's coming from.

Now, only a few years after having his spine pretty much surgically reconstructed in an amazing medical procedure (they basically built an internal support cage around his spine), he's cycled 100 miles across Death Valley.

And yet, the recurring themes of his talk were family ("there's nothing like the pride of a father") relationships, and a whole lot of John Wooden memories. There's something about major crap happening to you (and I know that of which I speak) that gives you perspective.

As a father, cyclist, beate up former jock, and child of the 70s, I can say that I've heard few talks that affected me as much.

Afterward, we (I and my two students) got a chance to get our picture taken with him. Since I operate under a pseudonym, I cut out everyone's face. But just to give you a sense of proportion everyone's head (except for Walton's) is cropped just at the top of the head - I'm about 5' 7"", and the taller of my two students (the one to my left) is 6'2"". The top of my head was about a good half a foot below Walton's chin- it looks like he's standing on a chair. He is an absurdly tall man.

Now THAT was cool.