Author: Franklin J. Parker
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Why You Should Be a Goals-Based Investor
Imagine for a moment that you owe a violent loan shark $10,000 by tomorrow morning. But today you have only $7,000. Now suppose you visit an economist for help. You desperately ask, “What am I to do?!” Our economist, being highly trained, administers a risk-tolerance questionnaire to gauge your preferences about risk. As it turns…
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How Much Can You Lose Before You’ve Lost Too Much?
I started my career in finance in 2007. For about a year I thought “this is great!” Then 2008 hit and I thought “this is terrible!” After 2008, I had one fundamental question that I wanted answered: how much can you lose in an investment portfolio before you’ve lost too much? After about five years…
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Labor Force Growth by Decade – R Code
I just posted an interesting look at the growth of the labor force by decade. Given that I used R to produce it, I thought it interesting to share the R code and method. Just for reference, here is the chart: First, we will need the following libraries The quantmod library is a significant reason…
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Optimizing a portfolio in R – Monte Carlo method
I regularly use monte carlo engines to answer questions. First, they are really flexible in their ability to model non-normal distributions and assumptions. Second, you can incorporate any constraints you want which may be outside the scope of a non-linear optimization function. At any rate, this is how to use R and a Monte Carlo…
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Current Unconventional Monetary Policy & What Comes Next
I have struggled to answer some basic contradictions in our economy. On the one hand, we have printed, spent, and borrowed unprecedented amounts of money at unprecedented rates. Yet, inflation has been nowhere to be found. The traditional relationship between employment and inflation has been broken (known as the Phillips curve). These are important questions…
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A Professional Investor’s Take on the Naivete of American Compass
As a professional money manager working in public markets, I love watching how we are portrayed in popular culture. Sometimes we are the card-shark poker player staring down an opponent a la Billions, sometimes the swashbuckling economist like Jack Ryan (who does surprisingly little economics). Thankfully, however, the job is never portrayed as it actually is. I can forgive…
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“Ok Boomer…” I’m Gonna Keep Homeschooling My Children
As a homeschooling father, I am no stranger to explaining our family’s choice to home educate our children:“Yes, they have plenty of socialization with other children.”“Yes, we teach all the subjects.”“No, you can simply buy the curriculum and it tells you what to do.” By now I have the answers memorized. You can imagine my…
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Elizabeth Warren and AOC Get Everything Wrong about M&A
Arthur Schopenhauer once quipped that if it were constantly repeated with great solemnity, nothing was too absurd for people to believe. After reading the preliminary Pandemic Anti-Monopoly Act from Sen. Elizabeth Warren and Rep. Alexandria Ocasio-Cortez, I find myself more seriously contemplating absurdity. This proposal is a study in Schopenhauer’s point: though couched in great solemnity, both…
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Should Corporations Consider Any “Stakeholders” Other Than Shareholders?
CS Lewis, the famed author of The Chronicles of Narnia, once discussed the distinction between advancing ethics and advancing knowledge of facts. In Lewis’ view, ethics changes remarkably little over the years. What changes, and changes rapidly, is our knowledge of how the world works. This advancement of knowledge informs our application of ethical norms, and it…
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How to Pass the CFA Exam on Your First Try
I passed Levels I, II, and III on my first try, and completed them all within the fastest possible time of 18 months. In addition, I scored in the 90th percentile on the Level III exam (I honestly don’t remember my percentiles for I and II). While I wouldn’t consider myself an expert, I believe…
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Franklin J. Parker, CFA 