“Auction theory is one of the economics’ biggest success stories.” — Paul Klemperer, Oxford University
Earlier this year, in my class at Chapman University, called “EconoPower,” I auctioned off a jar of pennies to my students. They were to bid on the jar, making sure they didn’t offer to pay more than the number of pennies in the jar.
The bidding began and soon students got into a bidding war. The final offer was $7.09 for the jar of pennies.
It turned out that the “winner” paid more than the double the value of the jar — there were only 309 pennies in the jar.
We economists call this phenomenon “the winner’s curse.” You see it all the time when paintings and other works of art are sold at auction houses using the standard “English auction” system where the highest bidder wins and often regrets it.
The students were amazed at how they acted so irrationally.
We then discussed the contribution of economists to the theory and practice of auctions, drawing from chapter 16, “Economists Catch Auction Fever,” of my book, “EconoPower: How a New Generation of Economists Is Transforming the World.” You can obtain a copy for only $20 at www.skousenbooks.com, and I autograph the book and pay the postage.
You can read more about the book here.
In chapter 16, I mention Paul Milgrom, the Stanford professor who has made great improvements in FCC radio spectrum auctions, for which licenses now go for billions of dollars.
Back in the 1980s, the government gave away valuable cell telephone licenses by lottery to lucky applicants. I had several friends become millionaires overnight by winning the cell license lotteries.
Then, economists like Paul Milgrom came along and said, “Why don’t you auction off these valuable cell licenses?” The government tried it and found they could make millions.
Paul Milgrom was also helpful in taking Google public in 2004 through what is known as a Dutch auction. It was a novelty at the time and kept investors from overpaying for the initial public offering (IPO). The traditional investment bankers could do nothing about it.
On Monday, Paul Milgrom and his teacher, Robert Wilson, won the Nobel Prize in Economics for their improvements in auctioning communications such as cell towers and radio spectrums. The prize was well deserved.
But I have one complaint: Paul Klemperer, an Oxford University economist who specializes in auction theory, and has written books on the subject, was ignored by the Nobel prize committee. Yet, this other Paul was singlehandedly responsible for the highly successful spectrum auctions in the UK in the 1990s.
Fortunately, I mention each Paul prominently in my book “EconoPower.” Get your copy today. There’s plenty of investment advice from economists.
Personal Note: On Saturday, Oct. 10, 2020, I wrote an important article for the FreedomFest Forum, “10 Lessons for 2020.” Read it here and make comments.
Our Post-Election Summit Is Only Three Weeks Away!
I’ll be speaking at the New Orleans Conference tonight via satellite (virtual meeting), but there’s nothing like our private, in-person, “off the record” financial summit sponsored by FreedomFest and the Investment Club of America. It is less than a month away. This confidential meeting will take place on Nov. 6-7 (right after the elections) in an undisclosed location in Las Vegas.
Why is this gathering so secretive? Because our First Amendment rights are being abridged by power-hungry politicians, and we need to maintain a low profile in an era of big government.
We live in dangerous times, in which our freedoms and wealth are threatened as never before. The November 2020 election has become the most important election of the 21st century due to the stark differences between the two parties. Trump and the Republicans are struggling to maintain power in the face of a never-ending pandemic. Their policies of tax cuts, deregulation and appointing conservative justices could be overturned soon.
As it stands today, the election betting odds still favor the Democrats. If the Biden/Harris ticket wins and the Democrats take over the House and the Senate, what will this mean for investors, entrepreneurs and the citizens of America? Will the stock market crash and gold soar?
Biden & Co. have promised massive tax increases on wealthy entrepreneurs, elimination of the long-term capital gains ‘break’ on stocks, bonds, gold, silver and real estate (with tax rates exceeding 50%). They have also promised socialistic programs like Medicare for All, free college tuition, a New Green Deal, a wealth tax, severe limitations on free speech, a new Supreme Court, all on top of out-of-control government spending. The Great Suppression has begun!
That’s why we are holding this Post-Election Summit. It is critical to your pocketbook and your way of life.
And to help make sense of it all, we have brought together some of the world’s top experts to discuss the outcome of the November elections. What will it mean in terms of our citizens’ rights to speak out, to run our businesses, to invest, to travel, to assemble and to be left alone?
Will our freedoms and standard of living be curtailed due to new government policies? Will our wealth come under attack with new taxes, inflation and regulation? Will tech and gold continue to be the favorite stocks after the November elections?
We have brought out the best and the brightest analysts in finance, economics and politics to provide their analysis and answer your questions.
The Post-Election Global Financial Summit is an “in person,” face-to-face event — not a “virtual” conference. Due to legal restrictions, attendance at this in-person event will be limited. We urge you to register now and not be disappointed.
The price for this two-day event is $299. There are no discounts and we expect to sell out quickly. To learn more about the conference, go to https://globalfinancialsummit.co/.
After you register, you will be given the name and location of the Las Vegas hotel, and you then can reserve your room and make your travel arrangements. The hotel is only $99 per night, plus tax. There is no resort fee. Parking is free. We arranged a great deal for you!
Special Note: Please do not discuss this conference on social media. This is a private conference by special invitation only. Thank you.
Our Confirmed Speakers for This Event:
Mark Skousen, veteran editor of Forecasts & Strategies and the producer of FreedomFest, will analyze the impact of the November elections on the economy, the dollar, taxes and your wealth. He will give specific recommendations — what to buy, what to sell and what to expect in the next year for stocks, bonds, the dollar, real estate and commodities.
Jo Ann Skousen, associate editor of Forecasts & Strategies and director of the Anthem Film Festival, will discuss her greatest concerns for the future — the protection of the twin pillars of freedom.
John Fund, senior editor of National Review and the nation’s foremost authority on politics and elections, will assess the good, the bad and the ugly coming out of the November elections.
Sean Flynn, an economics professor at Scripps College (Clermont) and principal author of the top economics textbook in the country, will assess the “New Normal” after the elections — how to survive and prosper in an age of higher taxes, growing deficits and more regulations. As the author of “The Cure That Works,” he will update us on the future of health care and the pandemic.
Jim Woods, known as the Renaissance Man, the #1 financial blogger in the world according to Tip Ranks, and co-editor of Fast Money Alert with me, will discuss his favorite investment strategies for 2021.
Hilary Kramer, editor of the popular 2-Day Trader, a radio talk show host and a graduate of the MBA program at the Wharton School of the University of Pennsylvania, will discuss how the November elections will be a “GameChanger” (the title of her most popular book that was #1 on Amazon this year and was also on the Wall Street Journal bestseller list).
Bryan Perry, editor of the prestigious Cash Machine advisory service, will offer his best post-election investment choices in high-tech and high-income.
Adrian Day, founder of Adrian Day Asset Management and the world’s top authority on global investing and mining stocks, will offer specific advice on the outlook for global investing, the dollar and commodities, with specific recommendations from blue-chip miners to penny stocks that are likely to double or triple in the coming year.
We just confirmed Barbara Kolm, vice president of the Central Bank of Austria, who will give us an update on Europe.
New speaker just added: David T. Phillips, the world’s top expert on taxes and estate planning, will join us to discuss the future of your estate and wealth-building strategies under the next president. If it’s Biden, watch out — expect major tax increases!
More speakers will be added soon and Roger Michalski, publisher of Eagle Financial Publications, will moderate.
Time is short, and now is the time to act if you wish to be part of this historic gathering. Attendance is strictly limited, so sign up today at https://globalfinancialsummit.co/.
You Nailed it!
How to Write Persuasively Without Using Divisive Political Labels
“There is no left or right, only up or down.” — Ronald Reagan
“He who controls the labels, wins.” — Larry Abraham
I know it’s hard to teach an old dog new tricks, but here goes:
As you may know, I have avoided the use of the divisive labels “Left” and “Right” in all my speeches and writings, and only use “liberal” and “conservative” when the definition applies. I never use the term “liberal” to describe the enemies of liberty, nor “conservative” if it means conserving bad policies.
I found this approach liberating, and it allows me to focus on the issues, rather than name-calling, in debates. Now, I see the “no label” approach is catching on.
Richard Rahn, a top-notch, free-market economist, wrote an op-ed column in The Washington Times entitled, “Biden Presidency Bad for Media Business and America.”
Surprisingly, he wrote the entire article without using the tired old “Left/Right” political labels or even “liberal” and “conservative.”
You can read the article here: https://www.washingtontimes.com/news/2020/oct/12/biden-presidency-bad-for-media-business-and-americ/
I congratulated him on writing a hard-hitting op-ed without any of the divisive language that has become the norm in today’s media — the constant use of terms meant to demonize an entire group, especially the tired old labels Leftist, Rightist, Liberal and Conservative. I was delighted to see that he didn’t use any of these terms.
Rather, he used personal adjectives to describe the politician’s behavior, such as “narcissist” for President Trump or “boring” for former Vice President Joe Biden.
Even better, most of the time, he focused on specific issues. He made his points in favor of the Republicans and against the Democrats without the harsh labels. We need more of this kind of writing.