Although knowing the name of Charles Munger, a lifetime-long partner of Warren Buffet at Berkshire Hathaway, I never bother myself in diging into his thoughts. After spotting his name and thoughts mentioned so many times in the Jeremy Siegel's books, today I googled one of his speechs regarding his worldly wisdom and how he applies these wordly wisdom into his investment management.
1.I could improve your ultimate financial welfare by giving you a ticket with only 20 slots in it so that you had 20 punches--representing all the investments you got to make in a lifetime. And once you 'd punched through the card, you couldn't make any more investments at all. Under those rules, you'd really think carefully about what you did and you'd be forced to load up on what you'd really thought about. So you'd do so much better.
2.The reason why we got into such idiocy in investment managment is best illustrated by a story that i tell about the guy who sold fiishing tackle. I asked him, "My God, they are purple and green. Do fish really take these lures?" And he said,"Mister, I don't sell to fish"
3.It makes sense to load up on the very few good insights you have instead of pretending to know everything about everything at all times.

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听台北爱乐。说Maria Callas的遗物拍卖，没有想到的是她写给她丈夫也就是她经纪人的情书，居然只能半价销售。主持人说，其实人们只要能从她的歌声中能感受她所有的感情就够了，希望买到情书的人能把那些情书烧掉。就像人们也许对捷克的雅纳切克（Leos Janacek )写给他爱恋10多年的女人写的600多封情书并不在意，那些感情已经化作音乐了。主持人放了雅纳切克弦乐四重奏的一章《情书》

NYTimes.com在报道今年圣诞购物的一篇新闻中说，有一个标题是：No matter what it has inside，大意是说今年的圣诞购物袋子都印刷得很精美和奢华，因为其实袋子里面是什么也许并没有包装重要。今天发现了Merrill Lynch在2000年2月，也就是在Internet Bubble破裂之前发布的投资策略报告，也是非常精美的语言和哲学。这段是这么说的:
"The meaning of life is creative love, loving cretivity. And loving creativity may explain why tech stocks are high and going higher. The Internet revoluation is allowing for creativety like never before, perhaps putting more of us in touch with the meaning of life"
真的很玄！

传统与现代之间——增长模式转型与新型工业化道路的选择 作者：刘世锦

最近读完了。感觉就是旁征博引，其实观点很简单，不用去读这本厚厚的书，只需要这位国务院发展研究中心副主任平时的讲话就可以了

Corry story of Barrons.com of today which comments that Warren Buffet's stock seems too priey. Who can really analyze what is the instrinc value of Birkshire?

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http://online.barrons.com/article/SB119767697474830557.html?mod=article-outset-box 

It is my first time to hear 2p-1 rule. Very interesting interview with Bill Miller, brilliant ex-manager of Legg Mason Value Trust from CNN.com. Best article I read this week.

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The article by Mr. Paul Krugman on NYtimes.com. His view is not positive at all and provides us with one of his explainations why the market seems to lack the confidence on the Fed's effort to alleviate the market turmoil caused by the subprime crisis. You can see the great gap b/w Libor 3 month rate (4.97% of last Friday) and Fed rate of 4.25%. Basically, he belives the problem with the current markets isn’t just a lack of liquidity — there’s also a fundamental problem of solvency. That's the fundamental difference between what happened to the market in 1998 and to the current market. hmmmmm.

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学好数学看来对寻找爱情也很有必要！！很透彻的话，爱，是投机不是天机

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【黃子哲】

由松菜菜子主演的日劇《大和拜金女》中，男主角曾在朋友的一場婚宴上引述物理學家理查費曼（Richard P. Feynman）說的一段話：

數學跟物理就像在旁邊看上帝下西洋棋，尋找其中的規則，尋找其中美麗的法則……也許人與人的邂逅也是有規則可循的，如果沒有規則的話，兩人不管在哪裡相遇也只會擦肩而過，更不可能有所交集……

我們與愛人的相遇究竟是上天的安排？是命中注定？還是人為的精心設計？抑或只是單純的巧合？毫無疑問的，大多數人「寧願」相信兩個人的結合是一種浪漫的宿命，而不是一場缺乏神祕色彩的意外，因為這樣的愛情就像父母費心張羅的相親大會一樣庸俗乏味，不值得咀嚼留戀。作家愛倫迪波頓（Alain de Botton）就說：「我們的人生與愛情若沒有上天旨意的主導，我們是會焦慮的。」

「如果當初我沒有答應你的追求，你會不會去追那時一起去聯誼的大美女潔如？」亞曼尼經常這麼逼問他男友。

「親愛的，任憑弱水三千，我只取一瓢飲，我們就是注定要相遇、相愛一輩子。」這是麥可的官方說法，也是亞曼尼想聽到的答案。

但真是如此嗎？我經常好奇若人們是先設定了一些條件篩選對象，例如身高、長相、收入、個性、學歷等，那麼符合條件的「這群人」都是候選人，他（她）們之間會具有不可取代性嗎？就邏輯上而言，會愛上某一人的機率應該是相等的，差別只在於會巧遇到誰，先後順序或有不同，反正不是A就是B或是C，意義都是相同的。事實上，有次和麥可在Lounge Bar喝酒時，他就向我透露，當初他是追求潔如不成後，才轉而追求亞曼尼的，至今他對潔如還念念不忘。

很顯然的，麥可的愛情是投機，不是天機。也就是說，我們時常會發覺愛情背後總有理性的算計，終究不可避免的是我們心中所設定的愛情，而不是某個真命天子（女）。這種論調雖讓愛情少了夢幻的糖衣，聽起來未免有點赤裸而缺乏美感；但若是真能揭開感情神祕的面紗，是否有助於我們不再盲目面對，進而做出明智的決定，讓戀愛從此一帆風順？幸運地，數學家已利用機率理論指引人們選擇最佳的可能伴侶。

我們在追尋伴侶的過程中，經常會遇到一種困境，亦即：我真的要和他（她）在一起嗎，下一個男（女）人會不會更好？由於愛情無法像在大賣場買東西一般可以同時比貨色、比價格，還有發誓最划算的商品，甚至買貴、買錯都可以退。一般情形下，愛情是無法吃回頭草的，一旦和某人切斷關係，就一去不回。所以令人困擾的是，最後我如何能避開錯的人，和對的人在一起？

數學家說，與一生37%的可能配對對象約會後，選擇下一個比之前所有約會對象還好的人，這會使你找到最佳配偶的機率達到最高。（37%是1/e的近似值，e是2.71828...，即自然對數的底數，至於推導過程在此不加詳述。）

也就是說如果你一生會與一百個對象談戀愛，那麼在第三十七個之後，擊敗前面所有人的那一個人，最有可能是最適合你的至愛。依此類推，若預計會遇到十個人，那麼你就應該選擇第四個之後，第一個比前面傢伙都棒的那個人。

如果這還不夠，你還可以利用「期待值」概念來決定誰是值得追求或投資的對象。所謂期待值是「機率」乘以「值」（即獲利或損失），期待值越大，代表越值得選擇。簡單舉例，追林志玲的成功機率只有1%，但她帶給你的價值為100（假設是快樂的值），相乘後期待值為10。另一方面，每天早上都會在捷運上遇見的那個長髮披肩的中等美女，追她成功的機率可能有50%，但她只能帶給你50的快樂，那麼她對你而言的期待值為兩者相乘後的25。顯而易見的，追那個捷運上的女孩，比追坐在Porsche跑車上的林志玲，更值得你一試。

有了科學理論當軍師、數學公式作GPS，愛情密碼化繁為簡，人人就此幸福美滿？！很遺憾的，數學家終究無法成為兩性專家，我們輕易的就能指出其中若干的破綻。譬如，一個人如何評估一生能遇到幾個對象，我們也無法給予每段感情客觀的評分，摯愛也有可能就在前面三十七個當中，一個人對另一個人的價值是多面向且難以估量，追上一個人的機率經常是變動而諱莫如深的。總而言之，人類情感的複雜性、變動性與不可測性，彷若畢卡索的畫或貝多芬的音樂，抽象跳躍而耐人尋味。

【2007-11-22 聯合報】

少林寺的大和尚不同意参加明年的奥运武术比赛的消息。
佛法的智慧又岂是平常人能明白的？

"昨天的王文华与今天的王文华"就好像也是自己的一部分：昨天的自己和今天的自己。昨天的我把王文华写的《不要天才，只要纪律》郑重的打印下来夹在course pack里面，昨天的我也和他一样，看到Prof. Sussman在一篇作业上面写的评语“真的只是两个人就能达到这样的水平？我不敢相信！！”。今天的我也渐渐明白不能把很多我们没有得到的title,  house, 就简单归为失败，正如同王文华说：“在人生中不同的事物上，去放下適合它的重量，學會為自己人生中的事物打分數，這個技巧讓我自己這幾年過得比較好”

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【2007/12/12 經濟日報】@ http://udn.com

The crisis was thus an accident waiting to happen. If it had not been triggered by the mispricing of securitized subprime mortgages, it would have been produced by eruptions in some other market. As I have noted elsewhere, history has not dealt kindly with protracted periods of low risk premiums.

The root of the current crisis, as I see it, lies back in the aftermath of the Cold War, when the economic ruin of the Soviet Bloc was exposed with the fall of the Berlin Wall. Following these world-shaking events, market capitalism quietly, but rapidly, displaced much of the discredited central planning that was so prevalent in the Third World.

A large segment of the erstwhile Third World, especially China, replicated the successful economic export-oriented model of the so-called Asian Tigers: Fairly well educated, low-cost workforces were joined with developed-world technology and protected by an increasing rule of law, to unleash explosive economic growth. Since 2000, the real GDP growth of the developing world has been more than double that of the developed world.

The surge in competitive, low-priced exports from developing countries, especially those to Europe and the U.S., flattened labor compensation in developed countries, and reduced the rate of inflation expectations throughout the world, including those inflation expectations embedded in global long-term interest rates.

In addition, there has been a pronounced fall in global real interest rates since the early 1990s, which, of necessity, indicated that global saving intentions chronically had exceeded intentions to invest. In the developing world, consumption evidently could not keep up with the surge of income and, as a consequence, the savings rate of the developed world soared from 24% of nominal GDP in 1999 to 33% in 2006, far outstripping its investment rate.

Yet the actual global saving rate in 2006, overall, was only modestly higher than in 1999, suggesting that the uptrend in developing-economy saving intentions overlapped with, and largely tempered, declining investment intentions in the developed world. In the U.S., for example, the surge of innovation and productivity growth apparently started taking a breather in 2004. That weakened global investment has been the major determinant in the decline of global real long-term interest rates is also the conclusion of a recent (March 2007) Bank of Canada study.

Equity premiums and real-estate capitalization rates were inevitably arbitraged lower by the fall in global long-term interest rates. Asset prices accordingly moved dramatically higher. Not only did global share prices recover from the dot-com crash, they moved ever upward.

The value of equities traded on the world's major stock exchanges has risen to more than $50 trillion, double what it was in 2002. Sharply rising home prices erupted into major housing bubbles world-wide, Japan and Germany (for differing reasons) being the only principal exceptions. The Economist's surveys document the remarkable convergence of more than 20 individual nations' house price rises during the past decade. U.S. price gains, at their peak, were no more than average.

After more than a half-century observing numerous price bubbles evolve and deflate, I have reluctantly concluded that bubbles cannot be safely defused by monetary policy or other policy initiatives before the speculative fever breaks on its own. There was clearly little the world's central banks could do to temper this most recent surge in human euphoria, in some ways reminiscent of the Dutch Tulip craze of the 17th century and South Sea Bubble of the 18th century.

I do not doubt that a low U.S. federal-funds rate in response to the dot-com crash, and especially the 1% rate set in mid-2003 to counter potential deflation, lowered interest rates on adjustable-rate mortgages (ARMs) and may have contributed to the rise in U.S. home prices. In my judgment, however, the impact on demand for homes financed with ARMs was not major.

Demand in those days was driven by the expectation of rising prices -- the dynamic that fuels most asset-price bubbles. If low adjustable-rate financing had not been available, most of the demand would have been financed with fixed rate, long-term mortgages. In fact, home prices continued to rise for two years subsequent to the peak of ARM originations (seasonally adjusted).

I and my colleagues at the Fed believed that the potential threat of corrosive deflation in 2003 was real, even though deflation was not thought to be the most likely projection. We will never know whether the temporary 1% federal-funds rate fended off a deflationary crisis, potentially much more daunting than the current one. But I did fret that maintaining rates too low for too long was problematic. The failure of either the growth of the monetary base, or of M2, to exceed 5% while the fed-funds rate was 1% assuaged my concern that we had added inflationary tinder to the economy.

In mid-2004, as the economy firmed, the Federal Reserve started to reverse the easy monetary policy. I had expected, as a bonus, a consequent increase in long-term interest rates, which might have helped to dampen the then mounting U.S. housing price surge. It did not happen. We had presumed long-term rates, including mortgage rates, would rise, as had been the case at the beginnings of five previous monetary policy tightening episodes, dating back to 1980. But after an initial surge in the spring of 2004, long-term rates fell back and, despite progressive Federal Reserve tightening through 2005, long-term rates barely moved.

In retrospect, global economic forces, which have been building for decades, appear to have gained effective control of the pricing of longer debt maturities. Simple correlations between short- and long-term interest rates in the U.S. remain significant, but have been declining for over a half-century. Asset prices more generally are gradually being decoupled from short-term interest rates.

Arbitragable assets -- equities, bonds and real estate, and the financial assets engendered by their intermediation -- now swamp the resources of central banks. The market value of global long-term securities is approaching $100 trillion. Carry trade and foreign exchange markets have become huge.

The depth of these markets became readily apparent in March 2004, when Japanese monetary authorities abruptly ceased intervention in support of the U.S. dollar after accumulating more than $150 billion of foreign exchange in the preceding three months. Beyond a few days of gyrations following the halt in purchases, nothing of lasting significance appears to have happened. Even the then seemingly massive Japanese purchases of foreign exchange barely budged the prices of the vast global pool of tradable securities.

In theory, central banks can expand their balance sheets without limit. In practice, they are constrained by the potential inflationary impact of their actions. The ability of central banks and their governments to join with the International Monetary Fund in broad-based currency stabilization is arguably long since gone. More generally, global forces, combined with lower international trade barriers, have diminished the scope of national governments to affect the paths of their economies.

Although central banks appear to have lost control of longer term interest rates, they continue to be dominant in the markets for assets with shorter maturities, where money and near monies are created. Thus central banks retain their ability to contain pressures on the prices of goods and services, that is, on the conventional measures of inflation.

The current credit crisis will come to an end when the overhang of inventories of newly built homes is largely liquidated, and home price deflation comes to an end. That will stabilize the now-uncertain value of the home equity that acts as a buffer for all home mortgages, but most importantly for those held as collateral for residential mortgage-backed securities. Very large losses will, no doubt, be taken as a consequence of the crisis. But after a period of protracted adjustment, the U.S. economy, and the world economy more generally, will be able to get back to business

虽然本科的时候也上过《发展经济学》，不知道当时上课的时候我都在思考什么人生爱情的大问题，以至于我对于当时的教授是否提过张培刚这个名字一点印象都没有，反正我今天才在一本书上看到介绍他的文章：3年一次的庚款留美考试全国第一；第一个中国人拿到哈佛大学的经济学博士；第一个中国人获得哈佛大学最高奖———威尔士论文奖。一个对历史比对经济更感兴趣的老人。
经济观察家：张培刚说中国经济到了关键时刻
张五常谈张培刚

DD proposed to have a so called "in-depth backpack trip" in Italy next summer. Here is some website material I got from NYtimes. We still have so much time to narrow the places we want to go on our wishlist.
http://travel.nytimes.com/travel/guides/europe/italy/where-to-go.html