A friend of mine likes to save money by ordering items in the U.S. and driving across the border to pick them up.  The trouble with his claim of having saved $50 on some order is that he ignores his car costs and the value of his time.  This mistake of leaving out important considerations because they are hard to value accurately creeps up in many decisions. A group of my golfer friends like to figure out whether to buy a golf membership or not.  If the membership is $2400 and an average round costs $40, they reason that they need to play 60 rounds to break even on a membership.  However, getting a membership gives access to regular social functions.  This social consideration could easily be worth a lot to some people, and could even be a negative for others.  It’s also valuable to be able to start playing when the weather is iffy without worrying about losing money if the round has to be abandoned.  Some members even play more often than they really ...

Like many people, I’ve been enjoying the good weather as much as possible lately.  As a result, I haven’t done much writing, so I thought I’d reflect on the effect the pandemic has had on the use of cash. Understandably, people have been nervous about handling cash through the pandemic.  Many people stopped using it, and some retailers refused to take it.  I’m curious about what will happen as we come out of the pandemic. Will most people who sometimes used cash before the pandemic go back to it?  Will some retailers continue to refuse cash?  Banks would certainly like to see the end of cash so they can be assured of getting their cut of every transaction.  No doubt some retailers like the information they can gather about their customers when they use cards. I’d like to see cash remain an option wherever I go.  Then those who prefer to use a card can do so, and those who want to use cash can do so.  In some contexts, I like the anonymity of payin...

As long as the pandemic feels like it has lasted, I’m amazed at how quickly we’ve reached the point we’re at today.  Early on, we hoped a vaccine would be ready by sometime in 2021, but maybe it would take longer.  Then once we had a vaccine ready, it seemed optimistic to hope that we’d be vaccinated by the end of 2021.  Then the Canadian federal government promised that every adult who wanted a vaccine would get it by September, and the general reaction was “sure, I’ll believe it when I see it.”  Now it’s starting to look like adults and children as young as 12 who want a vaccine may be fully vaccinated by the end of August.  I know it feels like this has all gone on forever, but our estimates for when it would end have been consistently getting earlier.  There is every reason to believe that the world’s reaction to the next pandemic will be even faster. I managed only one post in the past two weeks: How to Lie to Yourself about a Stock Crash with Statisti...

Wouldn’t it be great if we could predict the future movements of stock markets so we could capture the gains and avoid the losses?  It turns out we can’t, but that doesn’t stop people from trying. After a Twitter exchange with John De Goey, I ended up reading the article The Remarkable Accuracy of CAPE as a Predictor of Returns by Michael Finke.  He gives a chart that appears to show we can predict the coming decade of stock returns by calculating what is known as the CAPE (Cyclically Adjusted Price-to-Earnings Ratio). For our purposes, we don’t need to know much about the CAPE other than that it is a measure of how expensive stocks are, and that it was invented by Robert Shiller who received a Nobel Prize in Economics in 2013.  In fact, we don’t even have to calculate the CAPE ourselves; it is freely available and updated daily . Right now, stock prices are very high.  As I write this, the CAPE for U.S. stocks stands at 37.  The only time it was higher in the ...