A friend jocularly asked if I was going to Stockholm to receive a Nobel Prize. Actually, the idea is not as far-fetched as it sounds. The Nobel outfit's choice of categories is somewhat random. Why Literature but not Music? Why Physics but not Geology? Why not High Yield Bond Research?

Given that they generally hand out these things every year (aside from suspending the Peace Prize for world wars) I believe they'd get around to me eventually if my discipline were not arbitrarily excluded.

Really, these people remind me of the joke about God's response to man who complains that despite praying fervently each day for many years, he has never won the lottery: "Help me out; buy a ticket."

Anyhow, I did the next best thing to accepting a Nobel myself: I took the guided tour of the Stockholm City Hall, where they hold a banquet and a ball each year for the Nobel recipients.

The banquet is held in the Blue Hall, which is not blue. The architect's original plan to color it blue was so widely publicized prior to construction that the press stuck with the name. The Blue Hall must accommodate 1,300 Nobel banquet guests in 1,500 square meters. Each guest is consequently allocated just 57 centimeters (22.4 inches) of space at the banquet table. Except for Sweden's monarch, who gets 61 centimeters. As Mel Brooks said, "It's good to be the king."

There appears to be no basis in fact for the widespread belief that Alfred Nobel decided against establishing a prize in Mathematics because of a romantic rivalry with a mathematician. He apparently preferred branches of science with practical applications and didn't consider Mathematics one of them.

Let me point out that High Yield Bond Research, with its emphasis on avoiding financial ruin through corporate defaults, is eminently practical.

The Peace honorees receive their laurels in Oslo. So if you're very ambitious but still at the stage of choosing a field, think about which Scandinavian capital you'd prefer to visit one day.



 London first became known for its coffee houses in the 1600s and the glorious tradition lives on in today's coffee shops. Coffeeology, in the borough of Richmond-upon-Thames, recently posted as its message for the day, "There is too much blood in my caffeine system." Not far away is a new coffee shop enigmatically named "Kiss the Hippo." As I passed by it a young couple was smooching passionately out front. They were so entwined that I could not determine whether the lass was inspired by a resemblance between the lad and a hippopotamus.

In the same vicinity a prominent sign proclaims a building's address: One Kew Road. British propriety being what it is, no similar sign adorns #4 on that street. What baffles the American visiting these precincts is the Britons' inability to master their own language. It is not just a matter of their atrocious misspellings, e.g., tyre, kerb, programme, sceptic, soya bean. Neither is what we from the States find most jarring their stubborn pronunciation of "schedule" as if it were spelled "schedule." Rather, it is the British misuse of even the most basic vocabulary.

For example, I spied signs in shop windows reading, "Baristas Required" and "Stylists and Receptionist Required." Well, duh! Of course it requires baristas to run an upscale coffee shop and it requires stylists and a receptionist to operate a hair salon. In America, the verb we ordinarily use in such circumstances is "Wanted," but if we were to approximate the Brits' message we would write-accurately-"Baristas Needed." Over in the land of Shakespeare and Milton they fail to grasp what "required" actually means.

At a W.H. Smith shop I spotted a placard advertising a 500-ml bottle of water. The regular price was 99p, but the offer was, "Only 49p when you buy anything instore." Imagine, half off if you buy anything in the store! Naturally, I bought a bottle of water. Riding in an Uber I saw another curious sign that read, "Use cycle path, not carriage way." Presumably, refusing to follow the rules of the road constitutes cyclepathic behavior. Despite the Brits' linguistic confusion, I am pleased to report that correct-that is to say, American-usage is making steady progress in the UK. For example, the bizarre construction "Mothering Sunday" is being supplanted by the more euphonious "Mother's Day." Yet when greeting cards appeared with the message, "World's Greatest Mom," the retrograde Telegraph, far from applauding the nation's advance toward retiring the silly-sounding "Mum," urged the government to impose a tariff on American English in retaliation for President Trump's tariff on British steel. Readers from Birmingham, apparently the most enlightened section of the island nation, posted online protests that they do in fact call their mothers "Mom."

Well, that covers the highlights of my recent visit to Merry England. The natives attached great significance, though, to their national team's successes in the world championship tournament for soccer, a sport they seem to confuse with football. The country is also said to contain several sites of cultural and historical interest.



Should an investment committee allocate more money to a manager who has been underperforming recently? Over a 20-year span, entire stock market return was earned on just five days.

See my review of Charley Ellis's "Winning the Loser's Game".



Here is my review of a genuinely useful book that documents what actually works.



This is my review of a book that describes every type of hedge fund category.



There are a lot of things you don't "need" but that make your life better. A high yield mutual fund is very handy if you care more about generating income than upholding academic theories of portfolio design.

I wrote this article to explain: "Is High Yield Necessary?"



This is my review of a terrific new book about the New Deal financial reforms. Read about the extraordinary financial skullduggery surrounding Boeing's initial public offering.



Topic #1 at investor conferences is always: "When will the Fed raise interest rates?".

Here are some expert views on when it will happen and what it will mean for investors.



Economic forecasters fail to foresee recessions and are politically biased. Those who get the big calls right do a particularly poor job on routine ones. But the picture isn't entirely bleak. See my review of "Inside the Crystal Ball" by Maury Harris.



 Hi Vic,

Sorry I didn't get to say hello at the last Junto meeting, which was terrific.

Regarding the question you asked at the event: This is not a comment on the validity of Mackey or Teicholz's position. I think Gene was right about needing to do the marathon rather than the sprint, i.e., reading up in greater detail to get fuller knowledge of the topic. But you asked Teicholz whether she rejected the findings of epidemiological studies in the face of many experts who considered them valid.

My question is how you come down on The Phenomenon Formerly Known as Global Warming, i.e., climate change, and whether the skeptics (called "deniers," as in "Holocaust deniers," by the proponents) should bow to the opinion of the majority of experts, notwithstanding the fact that the 30-40 years ago the experts were very concerned about Global Cooling.

I think you or one of the other questioners raised the point that medical journals have 20 referees on an article. So perhaps the studies are more reliable than those in financial journals, where a professor at UMass assigns his grad students to study the results reported in articles and finds that 25% have serious errors. No need to write a treatise on this, but I'm interested in your thoughts.

Best regards,


Victor Niederhoffer replies:

The hazard rate is the gold standard in epidemiological studies. And the hazard rate for life expectancy in the typical studies of meat versus vegetable studies is about 2 to 1. You can imagine the significance of such a difference with 80,0000 subjects or so. The estimate of p has a binomial distribution. When you have a sample in the millions as the meta studies of such divergences have, there is no room for selective sampling. What are the chances that a million people are selectively different from the remained. The statistics of quota sampling are relevant here.

I would also point out that all the epidem studies use the cox hazards model as their statistical foundation. The cox model is like a standard multiple regression model but deals with probabilities instead of levels or changes. All such studies control for all measurable independent variables such as health status, smoking history , and weight. The chances that other independent variables mite affect the outcome with numbers this large in the meta studies is zero.

 You ask why science is sometimes wrong about such things, and I would say that the epidem studies with millions of subjects in many different counties with many different independent variable and selected groups are in a completely different kind of scientific category than climate change where the dependent variables are temperature changes over time, and the independent variables are chemical entities with say 10 or 20 observations and more independents than observations. There are no epidem studies possible in climate change.

I believe Nina is very out of her area of competence and it was dysfunctional to have her armchair rebuttals of highly refereed studies and statistically significant results in the one in a billion categories based on sampling errors and hypothetical differences in the groups studied.

Victor Niederhoffer adds:

 Another way of responding to this tomfoolery less statistically and more qualitatively and common sense is this. The differences between the groups that eat meat and eat vegetables in the many life expectancy studies are of the order of 5 to 10 years. Such differences are important to most human beings who wish to live. With samples in the millions in aggregate and attempts to control for all measurable independent variables there is a reasonable likelihood that the two groups are representative of the populations.

Now if there was a difference in these groups with respect to some other variable, like exercise or preference for risky activities, and somehow that was not covered by the other independent variables, then what could that variable be. Let us find it, because it would be the key to health. i.e. if it had so much of an impact by not being measured, it is truly important, much more important than the diet, and if it could be found it would be the open sesame.

But of course it can't be found because it would be statistically impossible to find something uncorrelated with the other variables that have been studies that has such an effect. It only exists in the armchair and the debunking retrospection and Monday morning quarterbacking. 



Economists missed the Swiss franc uncapping, the oil price collapse and the interest rate drop. They may burn you on GDP, too.



Are financiers and regulators deranged? The author of The Lunacy of Modern Finance Theory and Regulation derides empirical research and lauds surveys that come up with the finding that Sigmund Freud is to blame for our financial woes. Here is my review of the book.



 This is a link to my review of Money: How the Destruction of the Dollar Threatens the Global Economy and What We Can Do about It, by Steve Forbes and Elizabeth Ames.

Even if you don't accept the authors' prescriptions, this book will make you reexamine your assumptions about exchange rates, the gold standard, and other economic topics.



 I had a cab ride last night with a 53-year-old Romanian immigrant. He grew up milking cows manually and his father earned $1 a day. Driving a cab in New York is hard work. When this driver comes home at night, he has to go out for a walk twice in the evening to relieve the stiffness in his back and bottom. He jokes that he tells his wife, "You'll have to go with the milkman, because I'm too tired." But he now makes $400 a day, equivalent to the average monthly wage in Romania when he was growing up. He has saved his money, so that without going too heavily into debt he has bought a spacious two-level apartment in Queens with a garden and a parking space. His two teenage daughters have the whole second level as their rooms. He bought what he thought was a giant-sized flat screen TV for $2,000, but his daughter's room was so big that from her bed to where the screen is, she can barely see the image. He and his wife emphasize education, with the result that his elder daughter was one of 100 students accepted to a top school that had 15,000 applicants and his younger daughter has a 97 average. Summing up, he is proud that coming from a humble beginning, he has become a millionaire by owning his own cab and a medallion that he bought for $200,000.

A truly inspiring story: By being part of a government-operated conspiracy to suppress competition, he has amassed $1 million of wealth based on economic rents. Heavy lobbying perpetuates this scheme. Just one question: What will the value of the collateral he put up for his home loan as Uber becomes better established?

Paolo Pezzutti writes: 

This story shows once again how the generation of immigrants now 50 or so years old lived the American dream. The romanian taxi driver was able to arrive in the US penniless and end up sending his kids to good universities, buying a house and owning a very valuable medallion. The story of growth and success has occurred to millions of immigrants over the past decades. This is what really is fascinating about the US. The question is whether the US is still able to sustain the American dream. Will the new generation of immigrants find it harder to integrate in the society, find a good job and provide education to their kids?


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