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What should be humanity’s top priority?
I saw a quora article by this title back in February. In it, there were various suggestions split into two main camps: either social or technological. I think humanity’s top priority is probably the intersection of the two. Specifically, humanity’s top priority is almost certainly is the predictive ability of economics, and thereby, the application of science […]
How Should Cofounders Split Equity? A Cofounder Vesting Riddle
Here’s a cofounder riddle: Cofounders A and B start a company around A’s idea. There are 10 million shares authorized. A gets 2 million unrestricted for the “idea.” A and B each get 4 million subject to vesting. Due to unforeseen circumstances, A immediately quits. A’s unvested shares return to the company. B presses forward […]
Montien Thai Restaurant Pricing Practices
Last night I ate at Montien, a Thai restaurant in Boston. The food was good, as usual. When we got the check, I noticed one entrée was $2 more than the menu list price (about 10%). I didn’t think much of it. It seemed pretty normal that a printed menu might have fallen out of date. The waitress came by […]
A Modern Marvel: The Funnel
Let me tell you why this $1.19 funnel that I purchased from AutoZone should astonish you. Behind it lies not only a secret about consumer product pricing but also an amazing but true fact about manufacturing. First, the secret: a consumer product is typically priced at two to five times what it costs to make. […]
What the Market Thinks about North Korea
Is South Korea going to be attacked? Well, we can get a sense for market opinion by analogy with World War II. Back in 2004, Financial History Review published an article correlating market events with World War II events. In particular, they looked at the prices of Nazi German bonds and Belgian bonds. Below is […]
Financial Figuring for Landlords: Real Estate Moats
A moat was a medieval form of security. Just pull up the drawbridge and watch as your enemies fail to get across the water, or if they do, to scale the wall of your castle. Although physical moats have no place in modern real estate (can you imagine the lawsuits?), an “economic moat” is Warren […]
What if you change your mind halfway through a negotiation?
Inconsistent decision making sometimes leads to a crummy result. Here’s a thought-provoking, quantifiable example from real life. Two of us were preparing to drive from Boston to New York City. We both wanted to go there, and if we didn’t drive together we would have gone separately. We could take his car, a mid-size sedan […]
Miracle on 1st Street SE
Imagine that you are the proud manager of the only company that provides food to the people who live in a large area around your plant. Your CFO comes to you for the quarterly update and for the first time in a long time it’s good news. He shows you the graph below: “We haven’t […]
