This and That-January 5, 2023 Edition

Stock and Bond Returns in 2022

Investors in the stock and bond markets in the United States just saw the worst year of performance since 1871.

Credit: https://twitter.com/austinbyersking/status/1608857155641442309

The S&P 500 was down 20% in 2022.

The NADAQ was even worse---down 34%.

The Dow looked good by comparison only giving up 9.4% for the year.

Rising interest rates decimated bond returns like nothing we have ever seen seen since the founding of the United States. Long bonds were down over 25%.

Credit:https://twitter.com/biancoresearch/status/1610404526678507521/photo/1

A balanced portfolio of 60% stocks and 40% bonds lost about 17% for the year. (VBINX-Vanguard 60-40 Balanced).

On the other hand, if you had $100,000 invested in Vanguard's Federal Money Market Fund in January you were receiving about 85 cents per month in interest. In December, that same investment was producing $350 in interest income for the month.

Investors with cash sitting on the sidelines invested in short-term Treasury securities were the only big winners in 2022.

Over $40 trillion of wealth was eviscerated in global stock and bond values in 2022. That is twice the amount lost in 2008 in nominal dollars.

Credit: https://twitter.com/zerohedge/status/1608811525971509249/photo/1

Viva Las Vegas

Seeing investment returns in 2022 might make some decide that they might be better trying their hand at the gambling tables in Las Vegas.

If that is on your mind you might find the Gaming Revenue Report from the Nevada Gaming Commission to be interesting.

This is the summary report for November, 2022.

These numbers are in 000's.

The "Win Amount" is what the casino "won". The "Win Percent" is how much the house won as a percent of the total amounts wagered.

Source: https://gaming.nv.gov/modules/showdocument.aspx?documentid=19300

A few observations.

The gaming establishments won $1.2 billion in November. "The house always wins in the end."

Slots are the least profitable for the casinos. Their win percentage is only 7.5%. Interestingly, the penny slots are the worst play for those playing the slots. 

I found it also interesting that about 25% of the total winnings the casinos take in ($300 million) are from penny slots. Stakes are low but the casinos make it up in volume. Slots generally account for more than two-thirds of the win amounts for the casinos.

Twenty One and Baccarat provide the best odds for gambling at the table and card games.

Keno, Bingo and 3-Card Poker look to be worse than playing the stock market in 2022.

Notice that the Sports Book generally provides a lower win percent than most other betting.

You might also notice the massive negative (17.75%) win percent on Baseball in November.

I have to believe that this is due to the winning bet Jim "Mattress Mack" McIngvale had on the Houston Astros winning the World Series.

Source: https://www.cnbc.com/2022/11/07/mattress-macks-record-75-million-astros-payout-will-cost-caesars-penn-big-this-quarter.html

Here is a screen shot from a video showing Mattress Mack using a wheelbarrow to load part of his cash winnings on to a private jet in Las Vegas to fly home to Houston.

Source: https://www.kfyrtv.com/video/2022/11/14/mattress-mack-picks-up-millions-won-world-series-bets-las-vegas/

An Easy A

When I went to college students would sometimes try to balance out a tough course load with one elective class that had a reputation as an "Easy A". 

Those courses were few and far between. My fraternity usually kept a list of classes and professors that might provide a reprieve from grade pressure in order to put more time into Statistics, Microeconomics, Organic Chemistry or Physics.

That was over 50 years ago. A 3.0 GPA at that time put you comfortably in the top half of of the class.

That is not longer the case as this chart indicates.

The AVERAGE GPA at Harvard is now 3.8.

If the current trend continues everyone at Harvard will graduate in ten years with a perfect 4.0.

Meanwhile at New York City's elite New School students were recently demanding that they receive A's for all their fall courses in the wake of student protests at the elite college.

Source: https://www.thecollegefix.com/elite-private-college-students-demand-all-as-for-their-fall-classes/

Students at New York City’s elite New School are demanding that all students get A’s across the board for their fall classes …  because they’re miffed at the college’s leadership.

According to Human Events, the demands are part of a student “rebellion” in solidarity with faculty who recently held a strike for better pay and benefits.

“We demand that every student receives a final course grade of A as well as the removal of I/Z grades for the Fall 2022 semester,” the first demand reads. “Attendance shall have no bearing on course grade. Grading shall not be conducted by anyone other than the official course instructor or teaching assistant

The school, which costs around $44,000 per year to attend, includes a long list of famous alumni such as actor Jesse Eisenberg, playwright Tennessee Williams, and the economist Franklin D. Roosevelt III.

It seems this is the inevitable result when students are told that everyone has a right to the same outcome irrespective of talents, effort or work.