When Women Complain about Having it All

Time after time we see studies showing that women do all the housework, all the child rearing, and so on. Even career women who work juggle career and family. Every time I see women read these studies they always complain. They complain that the man does not do enough.

What I find strange about this phenomenon is that the women themselves are complaining about something they choose to do. No one is forcing women to cook, to clean, or to raise the children. We do not live in a theocratic Islamic or Christian society where traditional norms are etched into laws that bind our day-to-day lives. We are free to live however we want. Yet surprisingly many women choose themselves to cook, to clean, to take care of the children, and to work. If they choose to have it all, why complain?

Sometimes women marry men who they think are kind people. Then it later emerges that they are lazy men who don't want to do any work. The solution to this problem is simple. Just get a divorce. Some women may not like doing all the cooking or cleaning, but maybe the man is providing so much to the family that she cannot possibly get a divorce. For example, if the man is earning one million dollars a year and is funding a luxurious lifestyle for the woman, then this woman may feel like she has to return some of the generosity.

Some men do not like doing the housework maybe because they think it makes them look less manly. Most women like manly men, so they shouldn't complain about a man who doesn't want to cook or clean. In fact, they should be happy that he is being a lazy manly man. For those women who want a man who cooks and cleans, then it is the woman's responsibility to filter out lazy men before marriage. This filtering out process can be achieved simply by asking the man if he would cook or clean. E.g. say, "Fred, if we get married, will you cook and clean for me?" It is like a job interview. I the man breaks his promise, there is always divorce. In most free country, leaders try to deregulate the marriage market as much as they try to deregulate the labor market.

The Democratic Ethics Fund

Socially Responsible Investments are investment funds that invest in ethical companies. For example, a fund manager may choose not to invest in companies that sell tobacco or harm the environment.

I believe the main problem with most SRI funds is that it is difficult to know what is ethical and what is not. That is why I suggest the creation of a democratic ethical fund.

Those who invest in this fund have the right to vote for the company the fund invests in. What is ethical then is defined by those who put money into the fund. This means that firms, if they want to receive capital, will need to appeal to the people.

Howard's Baby Bonus is Pure Upper-Class Welfare

Tabloid trash The Herald Sun is going on and on about how there is a baby boom in Australia that has raised total fertility rate to 1.85 babies per woman, the highest in Australia's history.

Birth rate increased from 1.76 babies per woman to 1.85 babies per woman (according to The Herald Sun). The Baby Bonus costs taxpayers $1 billion.

One billion dollars to produce 0.09 more babies per woman!

Remember you need 2.1 babies per woman to prevent population decline. Total fertility rate of 1.85 is not even close to enough! As a comparison, in Niger the average woman has 8 babies.

Economists at the Centre of Independent Studies believe this increase in birth rate of 0.09 is just random fluctuation, kind of like how the temperate changes over time during a day.

Why would Howard/Costello put heaps of money into something that doesn't work?

Given that this Baby Bonus is only available to a woman who earns over $50,000 a year, this smells like upper-class welfare!

Internet Users Around the World Help Feed the Poor

Link: Fight Hunger Click-to-Feed Map

Feeling cynical about human nature? The link above might help. At the United Nation's Fight Hunger Website, where a simple mouse click can generate a meal for a starving child, you can see in real time through Google Maps where each of the clicks are coming from in the world.

What surprised me most was the diversity of locations--Norway, Argentina, Spain, India, America, and so on. Looking at this is a reminder to me that not everyone is cruel and heartless.

Make sure you read One-Click Charity Sites to see my list of one-click charity sites.

Don't Listen to Bogle and Diversify Across Countries

American index fund guru John Bogle warns that you should not own too many funds. He also believes you shouldn't hold international funds, i.e. non-US funds. He said the following:

I am not persuaded that international funds are a necessary component of an investor's portfolio. Foreign funds may reduce a portfolio's volatility, but their economic and currency risks may reduce returns by a still larger amount. The idea that a theoretically optimal portfolio must hold each geographical component as its market weight simply pushes me further than I would dream of being pushed. (I explore the pros and cons of global investing in Chapter 8.) My best judgment is that international holdings should comprise 20 percent of equities at a maximum, and that a zero weight is fully acceptable in most portfolios.

This piece of advice from Bogle I think is a huge mistake. Picking countries, and especially having a bias towards your own country, goes against the point of indexing, which is to capture all returns from the market.

In the same way that you buy an index fund to get broad exposure to the market without having to risk selecting stock, so too investing in many countries gives you broad exposure to the world market without the risk of selecting countries. Why select your own country and not another? Rational investors cannot be patriotic.

Asset class diversification, e.g. investing in shares, property, fixed interest, and cash, can protect you when, say, the share market starts to go wobbly. Your holdings in fixed interest and cash will stabilize your investment. Diversification across countries helps when a shock occurs that is specific to one country. Suppose you live in Iraq just before George Bush declared war against Saddam Hussein. You wouldn't want to keep all your money in Iraq.

Update 4/12/07:
I've found evidence on the Bogleheads forums that Bogle has recanted his old position:

....consider having a large chunk of foreign equity in the portfolio. I'm well-known for ignoring overseas investments--I thought they were too expensive and too full of speculative accounting practices. However, I'm worried about the US economy now--our excessive borrowing for costly wars, an underfinanced pension system and the dollar's weakness. In the next few years, I'm planning to put as much as 20% of my equity holdings into foreign stocks. That includes 10% in developed countries and 10% in emerging markets.

The US economy is not the be all and end all. As I always say, a rational investor cannot be patriotic. Patriotism is irrational. Patriotism should be listed alongside framing, loss aversion, etc as a cognitive flaw in behavioral finance textbooks.

Bogle always warned us to buy and hold and not try to time the market. If we do time the market what happens is when a company is going well we buy and miss out of the gains. If the company does poorly we sell and miss out on the rebound. Bogle seems to have done the same thing with countries. He is country timing! When the US is doing well relative to non-US shares, buy US shares. But when the US is doing poorly relative to non-US shares, sell US shares. Same thing.

Some people love Bogle. I admire Bogle a lot. I am not anti-Bogle. The man is a true financial heavyweight whose advice has saved many investors from the greedy hands of financiers. But I think it's important not to idolize him as a God. When you research financial advice you should diversify across many advisers.

Many of my friends who invests in focused portfolios gave the following quote to me:

"Diversification is a protection against ignorance. It makes very little sense for those who know what they're doing." ~Warren Buffet

Oh, Warren Buffet! The prophet has spoken! Many people interpret this as an argument against diversification, but I see it as an argument for it. How do you know what you're doing? How does your fund manager know what he's doing? If you truly believe the market is efficient then you can't really know anything that the market already knows. So you diversify because of ignorance and don't pretend that you know something.

What if you really think you do know something the market doesn't know and because of this you can beat the market? Well then become a day trader and forget about indexing.

Toys Not Made in China

Many parents have been worried about traces of lead in toys that come from China. Even though the Chinese Communist Government is nominally communist, its economy is largely capitalist to such a high degree that some call China an anarchist society. Because there is so much specialization, it is very difficult to keep up with where which component came from. One city in China specializes in buttons, another city in China specializes in fabric, etc.

Many parents believe they can avoid dangerous toys simply by looking for toys that are not made in China. The belief here is that quality standards in America or Australia are superior to those in China. However, this is not the whole story. Although the dangerous toys were made in China, they were made there by American companies. They were subsequently imported into America for domestic consumers. American toy companies failed to pick up the problem and after the toys were imported into America, Government health regulators failed to pick up the problem as well. This then is evidence of total failure by many parties.

Another difficulty is that many products made in the USA or made in Australia actually use components that are made in China or made elsewhere. Take a good like a car. Even though the car itself may be assembled in Australia, the engine may come from America, the tires may come from China, and so on. Even though the engine may come from America, the components used to make the engine may not come from America. E.g. the spark plugs may comes from Italy, the pistons may come from Thailand, etc. This difficultly is seen in candy manufacture:

Country-of-origin labeling is one thing but ingredients in many foods come from multiple nations—making it impossible for even an investigative foodie to know what he or she is eating. Take candy for instance. Although you most likely won't find a "Made in China" label on any of the sweets you find in the candy aisle of your neighborhood store, it's a given that at least one ingredient in your favorite treat was sourced from China, a former FDA official told a North Carolina daily. Chocolate bars, marshmallows, soft drinks, gumdrops, and chewing gum are just some of the items containing flavoring agents and preservatives such as carageenan, gum arabic, and vanillin (vanilla flavoring) that are Chinese imports.

Perth's Property Boom

At work a co-worker was telling me that she wanted to go to Perth because property prices there were booming. She told me that she planned to move there in one year and that after she moved there she and her family would become "very rich."

I said that there are worries about bubbles in the Chinese sharemarket. For example, PetroChina's price to earnings ratio, which was about greater than 80 suggests the firm is overpriced.

She said, "But that doesn't affect house prices."

But it does. Economic boom in Perth is mainly driven by the Chinese buying iron ore from the Western Australians. Miners, engineers, etc move to Perth, and when they get there they have to live somewhere, which generates demand for houses, which leads to higher house prices.

Ron Woods in a piece titled Mining Boom Teeters shows how well correlated Perth house prices are with base metal prices. He says that the mining boom in Perth looks to be over mainly because of recession in America. What has America got to do with China? Just about everything sold in America is made in China. If the Americans are spending less because of recession and sub-prime worries, that reduces demand for Chinese goods, which reduces demand for the factor inputs that make those Chinese goods, which includes base metals from Australia.