Posts

Better Capitalism; No To Quarterly Earnings Guidance?

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I recently watched a joint interview with Jamie Dimon, the charismatic CEO of JP Morgan Chase, and legendary investor Warren Buffet, where they called for an end to quarterly profit reports. They stress that short-term focus on a company can cause managerial complications that can then trickle down into lower tiers of the structure.

   In their WSJ opinion piece they're quoted with stating “In our experience, quarterly earnings guidance often leads to an unhealthy focus on short-term profits at the expense of long-term strategy, growth, and sustainability,” and “The financial markets have become too focused on the short term. Quarterly earnings-per-share guidance is a major driver of this trend and contributes to a shift away from long-term investments.”

   While this may go against the normal rhetoric that is widely observed as short-term capitalistic greed, it is important that this is coming from two industry titans with a clear vision. It goes without being said that quarte…

Crypto-Questions

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Crypto Queries
A paper I recently read talked about an economic simulation of cryptocurrencies, and it provoked a few thoughts in my mind about the topic in general. In short, the thoughts were: do we have a right to call cryptocurrencies money, are the speculative efforts of individuals holding various coins restricting certain tokens from their full potential, and is it even worth going through the regulatory framework process for cryptocurrencies with such a small adoption rate and governments having the ability to implement their own cryptocurrency?

Let's start by addressing the first question. What exactly defines money has been heavily debated, dating back to 1875 when English economist and logician William Stanley Jevons wrote "Money and the Mechanism of Exchange". In this work, Jevons concluded that money must have four common properties, those being: a medium, a measure, a standard, and a store. Let's break down what exactly this means.

Medium: Money should …

Venezuela Launches the Petro

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Introducing the Petro
   When Bitcoin first emerged in January of 2009 there was an incredible amount of excitement surrounding its potential. The excitement was shared, but for many different individual reasons. On one end of the spectrum, you had excitement surrounding the peer to peer blockchain technology which eliminated any need for a trusted third party, allowing for truly decentralized transactions. While on the other end of the spectrum you have central banks along with policymakers who would love to reap the benefits of digital currencies underpinned by distributed ledgers, which would allow for an unprecedented amount of oversight on their currency, while simultaneously fearing the dangers of unregulated cryptos. The benefits and impacts of digital FIAT currencies are currently being researched and tested by various central banks and governments around the world including China, Sweden, Paraguay, the United Kingdom, Russia, Canada, Japan, the United States, and in Venezue…

Benefits of Blockchain

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Benefits of Blockchain   
   Since the internet first emerged in 1983 there has been an exponential increase in global connectivity which has allowed for new industries like e-commerce to flourish. As the internet began to emerge and evolve from being used solely by academics to being used by everyday people, the world wide web presented extreme potential and investors took notice. The internet was not well understood by most people at the time, in fact, many thought the internet was just a passing fad. Due to all the potential the internet held to disrupt a number of industries, money began flooding into stocks of companies who claimed to be working on anything related to the internet. Financial markets began to bubble up as Internet-based companies grew rapidly. The NASDAQ reached incredible heights, as did skepticism surrounding the valuations of companies. 

   The internet has allowed for overall societal progression in a wide range of fields varying from digital banking to enter…

It's Time We Ditch the Dow

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The Dow Jones Industrial Average carries an incredible amount of financial history, dating all the way back to 1885. The historic stock index is named after a formal Wall Street Journal editor and Co-founder of Dow Jones & Company, Charles Dow. The index consists of 30 large publicly owned companies that are based in the United States. The index was originally calculated by using a price-weighted mechanism, thanks to Edward Jones, one of Charles Dow's business statisticians. When the index was first created it didn't matter much that the companies were price-weighted. Industrial companies in the late 1800's and early 1900's were a fair barometer of the strength of the economy since the second industrial revolution was currently taking place. Technological advances allowed for a boom in steel, rail, and oil industries, hence the "industrial" average. This was all perfectly acceptable for a time when the industrial companies accounted for a significant chun…