The subject that brought this years Nobel Prize for Economics to winners Alvin Roth and Lloyd Shapley is pairwise matching. But what is pairwise matching, and how can it be applied to everyday life choices? Doug Goldstein interviews Nobel Laureate Professor Robert Aumann, winner of the prize in 2005, who explains what pairwise matching is and how it can be applied to life decisions, such as who to marry and which medical school to attend.
Posts Tagged ‘doug goldstein’
Have you ever dreamed of being like the mythical King Midas whose touch turned everything into gold? There is no question about it – gold symbolizes wealth and riches. Even though the Gold Standard is no longer the world’s main monetary system, this precious metal still carries a certain mystique.
Today plenty of people are looking to invest in gold. But is it really such a good idea? Many people got the “gold bug” over the past year, only to get shaken by its volatility. This may be because in January 2012, the London Bullion Market Association published a survey that predicted a rise in gold prices to $2,000 per ounce. However, since then, gold prices have oscillated sharply, only reaching $1600 at the end of May, having fallen as low as $1540 in the preceding days.
Despite its volatility, there are various reasons why people want to buy gold. Some investors have little faith in hard currency and prefer to invest in a commodity such as gold, which they believe will always have value. Indeed, the value of the precious metal often rises when other currencies fall, and in today’s shaky economy may be more dependable. History also works in favor of the gold investor. The gold rushes of yesteryear have left supplies depleted, and this scarcity adds significantly to the value of this precious metal.
However, not all is plain sailing. The scarcity of gold that makes it such a sought-after commodity also means that it may never again hold the currency value that it possessed in the past. Many people also argue that gold has no intrinsic value that can be measured logically. More to the point, unlike stocks and bonds, if you invest in gold bullion you will not receive any dividends or interest. Additionally, gold bars or jewelry may look very beautiful, but if they are extremely valuable, they shouldn’t be kept in an unprotected jewelry box. Safe storage and insurance policies come at their own costs.
If you are considering owning gold as part of a diversification strategy, make sure you believe in its inherent value, and aren’t blinded by its shine. For those folks who invest in gold and silver coins, remember that you can lose money in the gold market.
For those of us who have already moved to Israel, the following sentence probably sounds very familiar: “I’d love to live in Israel, and I’d move there tomorrow. But –”
What are the usual reasons for your family and friends to postpone moving to the Jewish State?
1. The economy is so fantastic in America. This sentence is usually accompanied with a sigh and statements like, “I need my creature comforts. I just couldn’t live without my Starbucks coffee or Trader Joe’s.” Well, perhaps you know something that Federal Reserve chairman Ben Bernanke doesn’t. After all, he was the person who recently said that the “U.S. economy is expanding moderately, but there are still clouds on the horizon.” Now compare that to Israel, where the IMF (International Monetary Fund) anticipates a growth rate of 2.8% in GDP during 2012 and the possibility that Israel may become a major gas exporter due to recent gas discoveries. Indeed, there may be reasons to think the American economy is gradually improving after the economic crisis of the past few years; after all, it has improved corporate earnings and lowered unemployment figures. But still remember that Israel is not a third-world country. And by the way, the quality of life has improved so much in Israel that the perception of needing to bring over essentials like washing powder and soft toilet paper or popular American consumer products is twenty years out of date. Indeed the influx of refugees across Israel’s borders show that it is one of the most desirable countries in the region.
2. I love paying day school tuition. These days, sending your child to a Jewish day school in Manhattan can cost you more than $30,000 per year. If, like many Jewish families, you have more than one child, this can become prohibitively expensive. Compare this to the relatively low tuition that we pay for schools in Israel that teach both Jewish and secular studies. This includes any kind of school that you want, from a secular Israeli day school to a Talmud Torah. Indeed, tuition costs and the quality of education has been a major factor for many families when considering whether to make aliya.
Moving to Israel involves many considerations, including financial. If you’re seriously considering moving to Israel, or if you already live in the Promised Land, make sure you know about living in dual currencies and investments/pension plans that straddle the ocean. There are two tax codes to consider, and different forms of accounting. Make sure you get advice, pre- and post- aliya, from professionals who are qualified to handle your investments. For a broad introduction to personal finance and investments, as well as specific information pertaining to the Israeli financial scene, read my book, Building Wealth in Israel.