Finding Gold in the Trash

Fall has yielded a trove of useful facts, quotes, and other ephemera that otherwise do not fit into neat cubbyholes. These financial tidbits might surprise, and some might infuriate.

My fall “Cleaning Out My Desk” routine has yielded a trove of useful facts, quotes, and other ephemera that otherwise do not fit into neat cubbyholes. As Faithful Readers know, I love this stuff and I hope that you will enjoy and benefit from it as well.

• I was mildly surprised to learn from CareerBuilder that 38% of workers are older than their boss. This is neither the historical nor the stereotypical employment relationship that we think of, but with more than 50% of docs now being paid by others, something to keep in mind. We do live in an age of accelerating change and disruption, so stay nimble to adapt.

• We have all been made aware that CEOs earn about 300 times as much as an average wage, and sometimes much more. Both political parties are pivoting off of this populist revelation of income inequality in our current Silly Season. Maybe it helps to think in starker terms: $50,000 versus $15 million. And the latter is not generally tied to stock price, profitability, or anything except a negotiated sweetheart deal with a friendly board.

• In a related story, the Financial Times reported that the 25 highest-paid hedge fund managers received a combined $11.6 billion, with a capital B, last year, despite the industry’s average return being a mere 3%, less than the Standard & Poor’s 500 index.

• To make the injustice gap even worse, researchers at Columbia and Harvard have learned that corporate insiders have a long-term 2% edge over stock market indexes when these executives trade stock in their own companies. Even with the Securities and Exchange Commission allegedly carefully watching. I hope that they did not spend too much money researching this “shocking” revelation.

• In interesting factoids, consider that there are three million more Americans over 65 working today than a decade ago, 19% of the total workforce, up from 6%. Look to the late, Great Recession and longer lives with more time in retirement as some of the reasons.

• Perhaps more seniors working is a factor in the average US FICO credit score rising to 695, a decade high. Nearly 20% of Americans are over 800 (860 is the theoretical max).

• Back to politics: Bertrand Russell, the British philosopher, not actually having watched the recent political debates, still observed that, “The fundamental cause of trouble is that in the modern world the stupid are cocksure while the intelligent are full of doubt.” Ring a bell? Aristotle opined that, “It is the mark of an educated mind to be able to entertain a thought without accepting it.” Voting public please take note.

• Adam Smith, the great 18th century economist, said, “Competition has two effects: It drives down prices and it makes people work harder and run their businesses more effectively.” A good example in this age of hospital mergers and consolidations is the reported fact in the Stanford Business Review that adding a single competitor to a community alone improved heart attack survival rates by 10%.” Think about it — simple competition does more to improve health in this case than a new med or technology.