Archives For December 2012

Here’s a preview of some of the new features in Excel 2013 from CFO. A couple of the features that interest me:

Combo Charts get a new interface. You want to show Revenue and GP% on the same chart. There used to be a confusing method for assigning GP% as a line chart on the secondary axis. The new Combo Chart interface (below) makes it incredibly straightforward. For each series, you control the chart type and where it’s plotted.

Relationships instead of VLOOKUP. If you add your worksheets to the pedestrian “Data Model” feature, you can use the Relationships icon to define that CustID in your million row transaction worksheet is related to CustNumber in your customer worksheet. Now, without doing millions of VLOOKUPs, you can create pivot tables from the data on both worksheets. Whether you’re sick of people who feel superior because they can do VLOOKUP, or someone who does VLOOKUP in their sleep, no one can argue that creating a relationship in 3 clicks is faster than waiting for a million VLOOKUPs to recalculate.

This sounds like a feature I will really like (once I learn how to use it).

• =FORMULATEXT(A2). This new function will put the formula from cell A2 in a cell. Whether you’re trying to document the formulas you used, or you’re looking for plug numbers in a column, this tiny little function is a winner. There are 50 new calculation functions in Excel, none will ever get mentioned in the Microsoft marketing materials, but FORMULATEXT is the one that I can’t see living without. I still use Excel 2010 and Excel 2013 interchangeably, but the first thing that makes me aware that I am not in 2013 is when my =FORMULATEXT() functions don’t work.

There are several more interesting features that I’m excited to check out. I know, I’m a geek.

I read this essay in last weekend’s WSJ about the skyrocketing cost of going to public college.

It opened with…

When Steve Joiner attended the University of Colorado in Boulder in the late 1980s, his parents—an Air Force mechanical supervisor and a teacher—paid his tab of about $4,000 a year, roughly $8,600 in today’s dollars. He earned a master’s degree and became a high-school math teacher.

In August, Mr. Joiner’s daughter Akaysha, the valedictorian of her high-school class, enrolled at CU, as the big campus here is known. But tuition, room, board and books for in-state students is now $23,000 a year—a sum Mr. Joiner and his wife, a social worker, weren’t prepared for.

The big difference between now and then: Though Colorado taxpayers now provide more funding in absolute terms, those funds cover a much smaller share of CU’s total spending, which has grown enormously. In 1985, when Mr. Joiner was a freshman, state appropriations paid 37% of the Boulder campus’s $115 million “general fund” budget. In the current academic year, the state is picking up 9% of a budget that has grown to $600 million.

He then goes on to list a few factors that have led to these price increases:

• administrative costs have soared over the years


• public (taxpayer) funding has decreased

I wish the author would have gone into more detail regarding administrative costs. I have always thought that administrative costs have gone up simply because they are expected to go up (self-fulling prophecy). In other words, if we didn’t just expect prices to go up, colleges might be under pressure to control costs.

What’s interesting about the public funding portion is that the author found that money to be diverted to other areas like primary education and Medicaid. Simply put, there isn’t enough money to do everything. This is unfortunate because college costs are increasing so much that they are keeping some people from reaching their potential and becoming productive citizens. Let’s not forget the fact that more social spending also enslaves the general public by making them more dependent on the government than on themselves.

Take a look at this Medicaid past, current, and future spending chart I found in an actuarial report on Medicaid spending (click on the chart to go to the PDF report):

Medicaid Spending

This does not bode well for controlling the future cost of public college. It also does not bode well for a healthy middle class.


December 12, 2012

12 12 12

“While we are free to choose our actions, we are not free to choose the consequences of those actions. Consequences are governed by natural law.” – Stephen Covey in “The 7 Habits of Highly Effective People”

France raises taxes on the wealthy.

The wealthy leave France to escape the higher taxes.

France’s Prime Minister, Jean-Marc Ayrault, whines about the “greedy” rich leaving his country.

Question: What did Jean-Marc Ayrault expect would happen?

I suggest Mr. Ayrault memorize the quote at the beginning of this post.

I saw this graphic on the Mises facebook page:

Moving for Money

I’m glad I live in Texas.

I just completed an interesting study where I looked at the monthly total returns for the S&P 500 Index and Corporate Bonds over 30-year periods from 1926 – 2011.

I set up the following five sceanarios:

100% Corporate Bonds
75% Corporate Bonds 25% S&P 500
50% Corporate Bonds 50% S&P 500
20% Corporate Bonds 75% S&P 500
100% S&P 500

The two I found interesting was the 50% Bonds 50% Stocks portfolio compared to the 100% Stocks portfolio.

Overall, the 50/50 portfolio did better when looking at the 57 rolling periods from 1926 – 2011. You can see this by clicking on the following graphic and downloading the handy PDF that I put together.

NOTE: The calculation was performed using the weighted average for the Corporate Bonds and S&P 500 based on the portfolio allocation so the data implies monthly rebalancing. What you’ll find on the two pages are the Average annual returns, personal rate of return (for dollar cost averaging), the value of a $100 per month investment, the end value of a $100 lump sum investment, and the standard deviation for the portfolios over each 30-year period.

50 50 vs. 100 S amp P 500 Portfolio

The average annual standard deviation for all the years was 14% for the 50/50 portfolio and 17.85% for the 100% S&P portfolio. Combine that with the fact that the average of the average total returns was 11.50% for the 50/50 portfolio and 11.21% for the 100% S&P 500 portfolio, it makes the 50/50 portfolio look superior.

I have not run the calculations based on government bonds.

This morning I saw a link to an online petition to “make the ‘minimum wage’ a ‘living wage.'”

Their living wage? $13.36 per hour.

ALL of the comments (except for mine) following this petition are in favor of this idea.

What these petition signers fail to realize is what happens to the price of goods and services at the higher wage level? They go up! They have to go up. There’s no other way. If you take a minimum wage job (usually in the services or retail sector) and increase wages dramatically (roughly doubling them from the current minimum wage), prices have to go up in order to pay them. If prices rise to pay higher wages, then the minimum wage earners are right back where they started and then we’re right back to signing another petition demanding a new “living wage.”

I have said this many times but I’ll say it again: not all jobs are created equal. Therefore, you don’t pay all jobs the same. Jobs like retail, that can be performed by most people, don’t deserve a high pay rate. These jobs are also normally done by kids and young people. It’s rare that a person makes a career doing a minimum wage job.

I suggest this petition signers pick up an economics book.