Thursday, May 6, 2021

Weisbach advice

I got a chance to see the page proofs of Michael Weisbach's upcoming book, "The Economists' Craft."  This leapt out at me from the preface: 

A second observation I have made over the years is that, perhaps because of a lack of good advice, many scholars, both doctoral students and faculty members, constantly make the same mistakes. Far too many publicly circulated papers contain incredibly long, mind-numbingly dull literature surveys; introductions that go on and on before they tell the reader what the point of the paper is and why the reader should bother to waste her time on it; data descriptions containing insufficient detail for a third party to replicate the results; tables that are unnecessary, badly labeled, or hard to understand; or overly dry prose written in the passive voice and apparently designed to put the reader to sleep. In addition, many scholars manage their time so badly when giving presentations that they do not get to the main results of their paper until the last five minutes of the talk. Their presentations are often poorly designed, with slides that are incomprehensible or even unreadable owing to their use of fonts so small that participants sitting more than a few rows back cannot read them. Young faculty routinely mismanage their career by not having a coherent research agenda, not getting their papers to journals, or not making connections with people in their field who teach at other universities. Sometimes they do not even bother to show up for seminars in their field at their own university.

 So true. This book's contrary advice will be very useful. 

Monday, May 3, 2021

The price of indulgences, 2021


Source. My correspondent provides the answer: 

5bps: IVV (column #3) (iShares Core S&P 500 ETF)

15bps: ESGU (column #1)  (iShares ESG Aware MSCI USA ETF) 

30bps: LCTU (column #2) (BlackRock U.S. Carbon Transition Readiness ETF) “Sea change” quote from BlackRock here 

I have not independently checked, though the answer hardly matters. The fees and portfolios tell the story. Obviously any claim that this ESG portfolio will outperform after fees is ... strained. 

When I did my Senate testimony on financial regulation and climate change, someone (I forget who)  suggested that financial regulators need to really crack down on ESG, carbon, diversity, and other virtue claims by investment managers and large corporations. I heartily agree. Of course, we have different motivations.  I got the sense that the person suggesting it wanted to make sure companies really did keep all their virtuous promises. I think that being forced to document their virtue, with criminal penalties for securities fraud hanging in the balance, would show just how empty this whole exercise is. 

Update: To be clear, I'm all for the free market. If people want to pay 30 bps for glossy feel-good marketing materials (click the above link) attached to their S&P500 fund, more power to them and the producers of such materials. Of course, central banks who have spent 30 years bemoaning "bubbles," "overpricing" "speculative enthusiasms" might not want to be piling on to such efforts. Again.