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Wednesday, April 23, 2014

Being lucky enough to be born smart might be more important than if you attend college

This is about the 1000th article I have seen that mixes up correlation with cause and effect as it relates to the value of college.

They never try to compare comparable subsets (with IQs that are similar) when they make the fallacious argument that college grads make more money than high school dropouts and therefore it is a good investment.

They always forget to account for the average difference in IQs for college grads compared to non college grads.  I can tell you that one factor that always seems to pay off is to be lucky enough to be born smart.  A degree in Sociology is not going to cure this challenge if you weren't so lucky.

But alas, if this writer did attend the local U, he must have been sleeping during his Logic class.

Find Lucky and Good: Risks, Decisions and Bets for Investors, Traders and Entrepreneurs at Amazon.

Sunday, April 20, 2014

Which Class Do I Take?

How about this for a college decision process?  Study the harder subject. 

You can take a class in Gender Studies where the prof awards 90% A’s or a class in Advanced Engineering Mathematics where only 20% of the students earn an A. In which class should you enroll?

You can take a class in Organic Chemistry where few students receive an A and many do not even complete the class. Or you can take a late afternoon class in Volleyball.  Nobody flunks Volleyball.  So in which class do you enroll? 

I will say it now; always take the harder class. Set aside the grade and focus on what you are going to learn.

Find Lucky and Good: Risks, Decisions and Bets for Investors, Traders and Entrepreneurs at Amazon.

Monday, April 14, 2014

Using equity to fund college instead of loans.

Interesting article about the antiquated system we have for funding college today.

At least with the federal home loan programs, the system attempts to qualify their borrowers, such that a borrower has a chance of not defaulting.

But this kind of evaluation is not even a consideration in the college student loan programs. It doesn't matter if you study petroleum engineering or sociology - you can borrow the same amount. And yet the job and income prospect for the two majors are obviously quite different.

This article suggests an equity-like program where an investor funds college in exchange for a part of the future income stream of the student. Conceptually it might work well, but if it is just another government program you can be assured that it will bring in a whole new set of subsidies. The college establishment hates the idea that the petroleum engineering student might get a better deal than the sociology major.

Find Lucky and Good: Risks, Decisions and Bets for Investors, Traders and Entrepreneurs at Amazon.

Monday, April 7, 2014

We are not against college

Here is what we have been saying for years: “We are not against college but question many of the long held assumptions about it. We think too many attend, too much is spent on it and that students are under the mistaken belief that all college degrees bestow the same benefits. And when students, parents and governments borrow recklessly to finance it, we have a huge problem.”

This article from the Economist GETS IT! YES!!

College can be valuable – at the right price and if one studies subjects that the market place demands and needs.

The market demands few college graduates with degrees in Gender Studies, Sociology, Psychology, English and History. But the market is demanding grads in Electrical Engineering, Petroleum Engineering, and Network Security.

This author is one of the few that makes three great points:

       1) Not all college education bestows the same benefits.
       2)  If one graduates with substantial student debt, the individual is frequently reducing her  opportunities rather than expanding them.
       3)  College grads on average have higher IQs than high school drop outs. So the figures that  compare the relative financial performance of the two groups should adjust for relative potential  and not attribute all the extra earnings to college. But the stats never do.

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