What we’re reading (11/30)
“Cigna, Humana In Talks For Blockbuster Merger” (Wall Street Journal). “The companies are discussing a stock-and-cash deal that could be finalized by the end of the year, assuming the talks don’t fall apart, according to people familiar with the matter.”
“Carlyle GrouAand WP Carey Set To Join S&P MidCap 400; Others To Join S&P SmallCap 600” (PR Newswire). “S&P Dow Jones Indices will make the following changes to the S&P MidCap 400 and S&P SmallCap 600 effective prior to the open of trading on Thursday, November 30: Carlyle Group Inc. (NASD: CG) will replace ICU Medical Inc. (NASD: ICUI) in the S&P MidCap 400…WP Carey Inc. (NYSE: WPC) will replace Worthington Industries Inc. (NYSE: WOR) in the S&P MidCap 400. Worthington Industries will replace Avantax, Inc. (NASD: AVTA) in the S&P SmallCap 600.”
“Charlie Munger’s Life Was About Way More Than Money” (Wall Street Journal). “It’s 1931, and a boy and girl, both about seven years old, are playing on a swing set on N. 41st St. in Omaha. A stray dog appears and, without warning, charges. The children try to fight the dog off. Somehow, the boy is unscathed, but the dog bites the girl. She contracts rabies and, not long after, dies. The boy lives. His name? Charles Thomas Munger. Charlie Munger, the brilliant investing billionaire who died on Tuesday in a California hospital 34 days before his 100th birthday, told me that story when I interviewed him last month. I’d asked the vice chairman of Warren Buffett’s Berkshire Hathaway: What do you think of people who attribute their success solely to their own brilliance and hard work? ‘I think that’s nonsense,’ Munger snapped, then told his story, which I can’t recall him ever publicly recounting. ‘That damn dog wasn’t 3 inches from me,” he said. “All my life I’ve wondered: Why did it bite her instead of me? It was sheer luck that I lived and she died.’ He added: ‘The records of people and companies that are outliers are always a mix of a reasonable amount of intelligence, hard work and a lot of luck.’”
“Hedge Fund Dollar Bulls Hold Fast Even As US Currency Erases Gains” (Bloomberg). “Hedge funds piled into bullish dollar bets this month despite the currency’s slide on softening US economic data and increasing expectations that the Federal Reserve’s most aggressive rate-hiking cycle in a generation is near an end.”
“Perhaps Intergenerational Mobility Has Not Declined In The United States After All” (Marginal Revolution). “From the latest American Economic Review: ‘A large body of evidence finds that relative mobility in the US has declined over the past 150 years. However, long-run mobility estimates are usually based on White samples and therefore do not account for the limited opportunities available for nonwhite families. Moreover, historical data measure the father’s status with error, which biases estimates toward greater mobility. Using linked census data from 1850 to 1940, I show that accounting for race and measurement error can double estimates of intergenerational persistence. Updated estimates imply that there is greater equality of opportunity today than in the past, mostly because opportunity was never that equal.’ That is from Zachary Ward of Baylor University. If that is true, and it may be, how many popular economics books from the last twenty years need to be tossed out? How many ‘intergenerational mobility is declining’ newspaper columns and magazine articles? Ouch. No single article settles a question, but for now this seems to be the best, most up to date word on the matter.”
