It seems the underlying idea of funding in the Infrastructure bill proposed by President Trump is based on Pareto Principle. The proposal caps funding by federal government to 20% and requires states, cities, and municipalities to fund the remaining 80%. In terms of business parlance, Pareto Principle implies that 80% of the business comes from 20% of clients.
The only problem with this rule is that it should have been implemented the other way. The funding of the infrastructure project should have been 80% by the federal government and the rest from the cities etc. Continue reading
Kurtosis is a measure used in statistics to measure weight in the tails. A normal curve with a mean of zero has a kurtosis of 3. Kurtosis in simple terms measures outliers in a distribution of data sets. Continue reading
Equities around the world fell last week. I had mentioned in my earlier articles that equities especially S&P 500 are expensive based on Case-Schiller Index. Over the next few months, equity markets around the world will be very volatile. I feel more correction is set to come in. Case Schiller (CAPE ratio: Cyclically Adjusted PE ratio) calculates price earnings ratio of inflation-adjusted earnings of previous 10 years. Continue reading