66,800 people in 65 nations, What They Think

 

TIME recently reported the results of a Gallup International poll. The following were the top five concerns

1.      Corruption Not surprising, since most of the countries surveyed have weak democratic institutions, rule of law and civil societies   

2.      Rich Poor Gap Dominates current political conversation in America. This concern is top of agenda for President Obama, Pope Francis, Warren Buffett. The divide is very visible in America and India, countries I live in and travel to. Some wealth distribution and reduction of inequality is needed to buffer the next few years of job destruction and evolution. 95% of all new wealth created in the US recently has gone to only to 1% of the population

3.      Unemployment Technology and population growth drive this concern. We’re in a race between computers and people – and we need to make sure the people win quoting Google’s Eric Schmidt. 230 million white collar jobs will be transformed or eliminated in the next ten years

4.      Environmental issues  Reached a crisis and yet there are uninformed but influential opposing forces. In a recent interview, the Dalai Lama when asked to name what issue the US could be paying more attention to he named climate change

5.      And finally Religious Fundamentalism Shia-Sunni in the Middle East,  Muslim- Christian in Africa, to name just two, resulting in millions of refugees

It’s worth waiting for the second cookie

Here is a simple puzzle. Do not try to solve it but listen to your intuition. A bat and a ball cost $1.10. The bat costs one dollar more than the ball. How much does the ball cost? The answer that comes to mind is 10 cents. Intuitive, appealing, and wrong. The correct answer is 5 cents. Many thousands of university students have answered this puzzle and the results are surprising. More than 50% of students at Harvard, MIT, and Princeton gave the intuitive wrong answer! And at less selective universities the wrong answer was in excess of 80%. Many place too much faith in their intuitions and avoid cognitive effort

Now let’s move from university students to four-year-olds. In one of the most famous experiments in the history of psychology, Walter Mischel and his students gave these children a choice between one cookie which they could have at any time or two cookies for which they had to wait 15 minutes. They were to remain alone in a room facing a desk with only two objects: a single cookie and a bell that the child could ring at any time to call in the experimenter and receive the one cookie. The children’s behavior observed through a one way mirror had the audience roaring with laughter. About half the children managed waiting for 15 minutes and picked up two cookies. Ten or fifteen years later a large gap had opened up between those who had resisted temptation and those who had not. The resisters were better at cognitive tasks, less likely to take drugs and scored higher on tests of intelligence.

Genes, parenting or other influences could possible explain the differential cognitive effort in these students and children.  Both are examples of the better outcomes from delayed gratification, avoiding impulsive decisions. A college freshman’s choice of more difficult courses (science, technology, engineering or math) could land a better job after graduation. A more secure retirement results from the discipline of savings taken out of every pay check

Adapted from Thinking, Fast and Slow a 2011 book by Nobel Memorial Prize winner in Economics Daniel Kahneman

Just seven minutes a day to health bliss!

The following are highlights of an exciting fitness regimen I read on pages, 72-73, in India Today, Aug 11, 2014

Journal of the American College of Cardiology’s simple new guideline: run at slow speed for just 7 minutes a day and cut down on your health risks. Scientists studied over 55,000 adults over a 15-year period. Runners had a 30% lower risk of death from all causes and a 45% lower risk of death from heart disease or stroke. They lived, on average three years longer compared to non-runners.

The article discusses how running benefits the brain (beta endorphins release creates high), lungs (more oxygen with each breath), arteries (keeps open preventing heart attacks), stomach (immunity boost by improving blood flow), calories (pushes up peptide YY, appetite suppressants), bones (strengthens, enhances stability, delays arthritis) and blood (arteries elastic, lowers sugar level).

The American College of Sports Medicine also recommends a 7 minutes set of high-intensity workouts-with just body weight, a chair and a wall. The article lists twelve 30 seconds exercises performed in rapid succession with 10-second rests in between

To make you feel guilty for not doing this, you can buy a snazzy wristband that gives you a mild electric shock if you slack off at the appointed workout time. Check out this new technology from Mahesh Sethi’s start up Pavlok

Guess which among a 2014 Accenture survey of 6 countries-Australia, Canada, India, S. Africa, UK and US had the highest (80%) number of consumers who desired to buy fitness monitors? Surprise: India

Have a healthy productive day

·       We’re in a race between computers and people – and we need to make sure the people win quoting Eric Schmidt Google at Davos, Switzerland

·       The forces of globalization and technology  tend to wipe out middle-income jobs

·       230 million white collar jobs will be transformed or eliminated in the next ten years

·       Nobel laureate Michael Spence has shown that when the American economy opens itself to free trade net job creation is basically nil

·       What’s threatened are not Ph.Ds or burger flippers but the jobs in between … middle class jobs

·       It’s been fifteen years since the American family got a raise

·       This is not just a wallet issue. It makes us feel bad too. Behavioral economics tells us that our sense of well-being isn’t absolute but rather is pegged to how the Joneses are doing

·       Majority of the jobs created in the next ten years will require at least two years of college if not more

·       Most importantly, some wealth distribution and reduction of inequality is needed to buffer the next few years of job destruction and evolution

·       95% of all new wealth created in the US recently has gone to only to 1% of the population

 

Above is summary of a commentary by Rana Foroohar, economist

How Morningstar ***** Rates Stocks

Morningstar star ratings for stocks are based on the stock’s price/fair value ratio and fair value uncertainty rating. To earn a 5-star rating, a low-uncertainty stock needs to trade at a 20% discount to MS fair value estimate, while the same stock would earn a 1-star rating if it traded at a 25% premium to fair value. These discounts and premiums widen as the uncertainty rating increases. A 3-star rating reflects our view that a stock is more or less fairly valued, while 2- and 4-star ratings reflect moderate levels of overvalu- ation or undervaluation, respectively.