Some Insightful Reading

I’ve been crazy busy as of late and have had little time to sit down for a meaningful blog post. I’ve also been way more active on Twitter, which is easier and quicker than blogging and way more interactive.

Fortunately, I can be lazy and link to someone else’s writing. My friend Kiley Austin-Young wrote 2 excellent posts recently, which I’d like to share. Kiley has been trading stocks and working at StockTwits (a Twitter based stock community).

The first post is called “On Stops, Sex, & Speculation.” This piece is more philosophical in nature and deals with the emotions/decisions one faces when speculating and or gambling on anything in life. I think this post does a great job of laying out the spectrum of emotions one faces in a life based on risk taking. This really extends to anything from start-ups to poker to trading to relationships. The ups and the downs come unexpectedly, and they’re often hard to recover from. That’s why risk management is vital.

The second post is called “Commission Catastrophe.” This piece is more technical in nature and details just how hard it is to overcome the broker fees in day trading to actually come out ahead. Kiley details his first hand experiences of trading and the role that commissions play. This reminds me of poker — where the “rake” (commission for the casino/house) can really put a huge dent in your winnings. Often, the difference between just staying in the game and calling it quits is the hard line imposed by the rake.

Enjoy.

A New Education Model

Everyone always talks about how the model for education in America is “broken.” While I completely agree with this statement, I’ve yet to see a proposal that offers a real solution. The other day, my friend Avinash sent me a cool New York Times article about a new charter school in New York. The article, entitled “Next Test – Value of $125,000-a-Year Teachers”, talks about a new school in New York with “superstar” teachers. For example, the Phys Ed teacher is Kobe Bryant’s former personal trainer. I wish I had that kind of gym teacher in middle school. The point of the school is really an experiment to test what drives success in the classroom:

[the school is] premised on the theory that excellent teachers — and not revolutionary technology, talented principals or small class size — are the critical ingredient for success.

Here is what the teachers were selected on:

The eight winning candidates, he said, have some common traits, like a high “engagement factor,” as measured by the portion of a given time frame during which students seem so focused that they almost forget they are in class. They were expert at redirecting potential troublemakers, a crucial skill for middle school teachers. And they possessed a contagious enthusiasm

There have always been different theories on success in the classroom. What really struck me about this school is that it has a completely contrarian approach: the teachers get paid more, the class sizes are bigger, the teachers work a lot more, and there is no safety net for teachers.

To make ends meet, teachers will hold responsibilities usually shouldered by other staff members, like assistant principals (there will be none). There will be no deans, substitute teachers (except for extended leaves) or teacher coaches. Teachers will work longer hours and more days, and have 30 pupils, about 6 more than the typical New York City fifth-grade class.

Teachers will not have the same retirement benefits as members of the city’s teachers’ union. And they can be fired at will.

This school basically cuts out any excess in the system. The best teachers should get paid a lot and in return a lot should be expected of them. In a sense, this school provides for a market for good teachers. I think an economic model to solve education in America could create significant change. People commonly bring up that teachers don’t get paid much, so there’s not an incentive for people to work in teaching. Imagine if being a teacher paid as much as traditionally highly paid professions like being a lawyer or an investment banker (pre-2008) or a doctor. I have no doubt in my mind that we could develop generations of extremely talented teachers.

The key is incentives. And as of today, it’s very hard to attract the best in the world to teach the next generations of America. That needs to change.