Archive for February 17th, 2011

The paradox of active and passive mutual funds

February 17, 2011

K@W has an interesting note on this paradox.  

The paradox is if passive funds give better net returns (gross returns minus fees) why do active funds remain? And not just remain but active funds are more popular as well. There have been number of reasons for the same:

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Trying to nudge people into yoga training

February 17, 2011

At a conference, the organisers provided free yoga training in the morning to the attendees. However, there were very hardly any takers. The low attendance was surprising and the trainer was miffed.

I suggested to change the default strategy. Instead of letting people opt in for the yoga training let them opt-out of it. Hence, instead of mentioning yoga as just a free facility and asking people to attend, make it a part of the program schedule. So, in the program schedule mention yoga training upfront nudging people to attend it.

It was thrilling to think of it and suggest it. However, it is unlikely to be implemented for the administration issues. But it was satisfying to think on those lines…

What led to break-out of the Greece crisis….a monastery?

February 17, 2011

Most who had looked at Greece’s economic data before its crisis in 2010, would have said things are wrong and needs to be corrected. Though, even the best could not predict a crisis as deep as the one that happened. And even more intriguing was the deep interlinkages and spillovers effect it had on other Europe economies.

However, what brought the curtains down on Greece? What was the Minsky moment?

Michael Lewis has a superb article on Greece and he tracks the Minsky moment as a fallout of a monastery in Greece. Vatopaidi monastery in a very cleaver arrangement, swapped its land with some key land portfolios of the Greek Government. Once this was exposed, the government had to step down. This led to a new government which then looked at the fiscal numbers and declared the deficit was much higher leading to a meltdown.

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