10 Wednesday AM Reads

Halfway through the workweek, and its time for the best morning train reads in the land:

• A Bot Made Millions on Wall Street by Reading Tweets. It Also Ate This Guy’s Lunch. (Slate)
• Yes, Millennials, Please Invest in Your 401k (Barron’s)
• Guy Trading at Home Caused the Flash Crash (BVsee also CFTC Charges U.K. Resident Navinder Singh Sarao and His Company Nav Sarao Futures Limited PLC with Price Manipulation and Spoofing (CFTC)
• Is Government Debt Too Low? (Real Time Economics)
• Here’s Why Apple Is Building Solar Farms in China (Bloombergsee also Custom Watch Faces (Daring Fireball)

Continues here


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  1. rd commented on Apr 22

    I saw the Altucher video on BI a couple of days ago and was appalled for all of the points made in the piece above and more. I didn’t want to post it on BR’s site because I thought it deserved as small an audience as possible. Just the fact that this type of advice is out there is indicative of the major problems with financial education. No wonder a large percentage of the population is very concerned about their future in old age.

    Some additional things – 401ks have gotten a bad rap because of bad fund choices etc. However, the rule changes in the past decade have been providing marked improvements to them and the provision of relatively low cost target date funds in many 401ks has completely changed that picture. These can eliminate both the grossly excessive cost issue (many fund companies charge 0.75% or less) and can eliminate the investor behavior problems if they drink the Kool-Aid and stay in the target date fund through the downturns. That is how you get the advertised 8% per year returns over 30+ years.

    Both Altucher and Otter missed the rule that allows people who have 10 years of contributions in a 401k and have separated from the company can take the money out without penalty starting at age 55. That opens up the possibility of aggressive early savers who work for one company for more than 10 years retiring early and being able to tap into their 401k. To make that work, they would probably have had to be saving 15%+ in their 401k in their 20s, the exact opposite of Altucher’s advice.

    “Investing in yourself” sounds great, but it is usually more of a factor of where you put your time instead of your money. Unless you need seed capital to start a well-planned business, simple allocation of your time to profitable pursuits, both financially and intellectually, is the main investment in themselves that most 20s and 30s can really benefit from. you can still monetarily save 15% of your money while you are learning new skill sets.

    • VennData commented on Apr 22

      Altucher is searching for headlines that grab him attention, he is a GOP sympathizing conspiracy theorist more and more

  2. winstongator commented on Apr 22

    On 401K’s, I really like the ‘eat right AND exercise’ point in the Barrons article. The other upside is that you are saving in an account that is very hard to withdraw from. From a very basic standpoint, do people spend too much or too little based on their income? If tough times come, you can eliminate your contributions and have a nice little cushion.

  3. uzer commented on Apr 22

    Is this groundhog or earth day?

    A little guy thrown under the bus while the big boys reap untold fortunes.

    When a little guy does it, it’s called “spoofing”, when the big boys do it via supercomputers on a megapipe connection with the exchange it’s called, “liquidity”.

    Move along, nothing to see here.

  4. hue commented on Apr 22

    Millennials: Not So Cheap, After All (the atlantic http://theatln.tc/1HUOVqo)

    Why American Workers Without Much Education Are Being Hammered (nytimes http://nyti.ms/1OeB3wg) from nyt comments: “It’s not just those at the bottom who are getting hit. According to the American Chemical Society, over the last decade the median wage of a PhD-level chemist has failed to keep up with inflation. Ponder that for a moment. Professionals with advanced degrees in science are, economically, just treading water. Meanwhile, the banksters are buying hundred-million-dollar condos and ten-million-dollar Congresscritters. Pretty clear to me where the problem lies.” bs degrees didn’t do well either

    FOGO Is the New FOMO (nymag http://thecut.io/1buD6vb) How to Optimize Your Flesh Prison (the awl http://bit.ly/1Ju7GQ1)

  5. RW commented on Apr 22

    China Will Keep Growing Because It Has to

    …China adopted a radically pragmatic approach to governing. If something resulted in economic growth, it was a good policy. The only real limit was that the supremacy of the Communist Party could not be challenged, but for most of the past 37 years that has seemed more a feature than a bug. China’s strange blend of Communist-Party corporatism, Keynesian macroeconomics and Schumpeterian entrepreneurialism has delivered spectacular improvements in living standards and similar gains in national clout.

    But still, can a country keep that going uninterrupted for four decades? Is that even a good idea? It feels like the Chinese Communist Party has gotten itself into a position where it can’t even ask those questions. ….

    NB: The author may be using references to Keynes and Schumpter because he believes these are more familiar to his audience but this is an error — ignorance and misunderstanding of both is absolutely rampant and references to them can only mislead — and it would have been better in any case to focus on how a unified, overarching ideological commitment to a specific framework by a major power coupled with a rising and expanding middle class can sustain and amplify economic policy success.

    Will the party end some day? They usually do but I for one won’t try to make the call as to when this one will or even how hard the landing might be.

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