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Short Takes: Professional Licensing, Warren Buffett’s Luck or Skill, and more

The Economist takes a thoughtful look at which occupations require licensing and what the advantages and disadvantages of requiring people to have licenses before practicing these occupations. The main purpose of licensing is to control the number of practitioners and inflate their pay. But requiring licensing is usually justified as a means to guarantee a minimum standard. 

Preet Banerjee brings more analysis of whether Warren Buffett’s track record is luck or skill. A part of this analysis is more bashing of the normal curve. An important thing to understand about the normal curve is that it is an approximation to reality that usually works well for predicting things about likely events and is way off for predicting extreme events. The real skill of a statistician is understanding when the normal curve applies and when it doesn’t.

The Blunt Bean Counter gives us the benefit of his extensive experience with explanations of six typical situations when you would have to deal with CRA and how serious they are.

Big Cajun Man draws an amusing analogy between the U.S. debt and a maxed-out credit card.

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Comments

  1. Big Cajun ManMay 21, 2011 at 6:19 AM

    Thanks for the inclusion, hope the rapture is more fun in a different time zone.

    ReplyDelete
  2. The Blunt Bean CounterMay 23, 2011 at 9:04 AM

    Thanks for the link, really enjoyed your topics this week.
    p.s. My word verification was "falic", are you telling me something with that :)

    ReplyDelete
  3. Michael JamesMay 23, 2011 at 9:37 AM

    @Blunt Bean Counter: Maybe Google's word verification knows something I don't know!

    ReplyDelete
  4. DraganMay 28, 2011 at 1:48 AM

    For those who are interested in valuation of LinkedIn, check bellow links:

    http://aswathdamodaran.blogspot.com/2011/05/valuing-young-growth-companies.html

    http://www.stern.nyu.edu/~adamodar/pc/eqegs/linkedin.xls

    ReplyDelete

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