What do you think is true, that most everyone believe the opposite?

[fareastwarriors]

As more and more realize this, you are going to see a shift away from traditional colleges and more toward on the job training and/or other non-degree training.

 

What are good jobs/careers that average Joe and Jane can pursue based on "on the job training and/or other non-degree training"?

 

Is this really something that can cover a significant percentage of middle class?

 

I doubt it, but I'm willing to suspend my disbelief if there are wide ranging good examples. :)

 

Trade jobs are in very high demand.  You can make $50-60k fairly easily in a trade.  Working at Costco, you make up to $25/hr.  Husband/wife at Costco and we're talking $100k combined salary.  You don't need a college education for that.

 

Starting bulldozer drivers make $60k (someone offered me this job, was more than I was making in software dev at the time).  Crane operators make $120k, not the giant cranes, but standard crane guys at a construction site. 

 

Worked with a guy who's now an exec who barely scraped by in HS. Got a job in tech and went from there.  I know a LOT of people making well into six-figures who were self-taught developers.  One guy wrote the core of NASDAQ's trading system, left college after one year.  Insanely smart guy, apparently college wasn't necessary, NASDAQ still using his code.  Said person also wrote SAC's systems, which is an interesting conversation he loves to have off the record.

 

A lot of sales jobs don't require a college degree.  If you are personable and are knowledgable enough about the product and can deliver results you'll be hired.

 

A friend of a friend owns a nursery, did extremely well for himself.  Purchased lots outside the city in development's path, would resell for millions.  Guy can't read, his wife does anything requiring reading, yet he's a millionaire.

 

I've come to the conclusion in life that smart and motivated people will do well regardless of their education.  They will blaze their own path forward.  College is great for someone with little initiative because it automatically bumps them to a level they couldn't get to from just working on their own.

 

College is necessary for STEM type things, but beyond that I'm not sure anymore, especially at today's prices.

 

For myself I'm positive my outcome in life would be no different if I hadn't finished college.  I had an internship at a startup during school, they offered me my job before finishing, said they didn't care if I just dropped out and started working.  Subsequent companies have all said they don't care about degrees, and going forward I only expect to work for myself.  Finishing college was a nice cherry on top of all the money paid, but held no true value for my career.

 

Many of my family members are in the construction industry. They don't have college degrees and majority does not even speak English. They are all doing just fine and have houses and cars  ("living the American dream") in the SF Bay Area, one of the most expensive area in the U.S. 

 

It helps to be entrepreneurial instead just being a worker but still even as a worker if you have some skills you will be compensated nicely without the headaches of being of a boss.

 

 

[JSArbitrage]

Being a good investor has little to do with being intelligent; it's much more important to have the right physiological makeup.  The reason so many great investors have Ivy League educations is because they had access to individuals with capital (rich alumni) to start funds, not because you need Ivy League level intelligence to be a good investor.

[Uccmal]

Being a good investor has little to do with being intelligent; it's much more important to have the right physiological makeup.  The reason so many great investors have Ivy League educations is because they had access to individuals with capital (rich alumni) to start funds, not because you need Ivy League level intelligence to be a good investor.

 

Interesting observation.  Leaving out whether or not I am good - doesn't feel that way right now, I am self taught at investing.  My background is science, not tech. or engineering. 

 

For those who are able to learn, most any path will do excepting STEM occupations. 

[Hielko]

Being a good investor has little to do with being intelligent; it's much more important to have the right physiological makeup.  The reason so many great investors have Ivy League educations is because they had access to individuals with capital (rich alumni) to start funds, not because you need Ivy League level intelligence to be a good investor.

I think this is a very interesting subject, wrote something once about it once: http://alphavulture.com/2015/09/02/how-hard-or-easy-is-it-to-outperform/ But I do think you are mostly wrong. You don't have to be a genius, but if you just have average intelligence you're just not going to be smart enough to recognize the bullshit from things that are a good idea.

[DTEJD1997]

Hey all:

 

I've got some beliefs that are the opposite of what most people think.

 

The first is the value of an "education".  When I was growing up, it was expected that EVERYONE will get at least a 4 year degree.

 

Most of my friends did indeed get a 4 year degree.  Some of them are doing OK, a couple are doing pretty good, and a bunch are struggling.

 

What is even more interesting, is when I went to graduate skool.  MOST of the people I graduated with are struggling, YEARS out of skool.  The jobs simply weren't there.  Most of what jobs WERE there did not pay ANYTHING close to justify the cost & effort required to get them.

 

All but one person who is doing well, had SUBSTANTIAL family wealth & connections and didn't have to borrow anything for skool.  The common thread to failure is student debt.  Almost everybody who has significant amounts of it is struggling or just blown out.

 

I sometimes work with recent graduates and it is an absolute catastrophe for them.  Some of them have $200k in student loan debt...

 

Education is increasingly becoming a very downwardly mobile path for people partaking of it.

 

The government is going to eat the cost on TRILLIONS of student loan debt.

[rkbabang]

Even in the STEM fields.  I know people personally who work as computer scientists at Adobe and Google who never went to school past high school.  In my own field (Electrical Engineering) I know people who have PhDs who make less than I do (I only have a BSEE).  You could easily do my job with 2 years of schooling and 3+ years of on the job training.  Take some basic electricity, math, and physics courses, maybe a statistics and computer science course or two then jump in and find a good mentor.  The college I went to (WPI) required me to do a humanities project, take writing courses, history courses, economics courses, etc, much of which was just a continuation of high school, none of which contributes much to the work I do, and all of which I could easily have learned on my own with a few good books and/or the internet if I had wanted to.  You could skip much of the first 2 years of college and be just fine. Even the last 2 years there is a lot of unneeded stuff.  Take electrical engineering for example (since I'm familiar with it), I wanted to focus exclusively on digital design and computer engineering, yet I had to take all kinds of analog type courses learning about op amps and the like which had nothing to do with what I wanted to learn (and I don't remember any of what I learned today).  I could easily have fit all the relevant math, science, and engineering courses that I wanted to take and are relevant to what I wanted to do in a 2 year program.  It wouldn't have made me any less effective at my profession, but you can't do that in a University today, to get X degree you need to take this specific list of courses with an occasional elective that you can choose.  There are better ways. And the price you pay in both time and money...there are cheaper ways.

[rkbabang]

caused him to give opinions that are outside of his circle of competence (politics).

 

WEBs opinions about politics are not outside his circle of competence.

 

Considering that he is wrong everytime he opens his mouth to talk about such things I would disagree with you.

 

Oh, yes, I know that you would disagree with me. I did not expect anything less.

 

And actually WEB was not wrong about anything in politics so far. :)

 

 

Hey Jurgis,  you have to admit..., well anyway, I will admit that if the situation was reversed my opinion of his circle of competence on the matter would be reversed.  If WEB was an anarchist and always said everything I agree with when speaking of politics, I would be saying that he was some kind of genius and that we should all listen to him.  I suspect you would be questioning his competence on the matter and saying that he should just stick to investing.

 

[Jurgis]

Being a good investor has little to do with being intelligent; it's much more important to have the right physiological makeup.  The reason so many great investors have Ivy League educations is because they had access to individuals with capital (rich alumni) to start funds, not because you need Ivy League level intelligence to be a good investor.

I think this is a very interesting subject, wrote something once about it once: http://alphavulture.com/2015/09/02/how-hard-or-easy-is-it-to-outperform/ But I do think you are mostly wrong. You don't have to be a genius, but if you just have average intelligence you're just not going to be smart enough to recognize the bullshit from things that are a good idea.

 

I think I agree with Hielko on this. However, I think that outperforming overall is likely to be very hard. Probably <1% (maybe even lower - 0.1%?) of active investors outperform, probably <10% of this forum outperforms over 5-10 years. With such low selectivity even over-average intelligence won't be enough.  Likely you'll need intelligence and the "talent" or "physiological" (sic) makeup.

 

I could start a poll for 5 year and 10 year outperformance on the board. However, there will be a huge survivorship bias.

[TwoCitiesCapital]

College is necessary for STEM type things, but beyond that I'm not sure anymore, especially at today's prices.

 

+1

Service sector doesn't require much in the way of a college education and we're a nation built on services telling everyone to go to college or they're stupid and looked down upon. I know individuals who went into trades right out of HS and they're doing better than A LOT of my college grad friends. Maybe the college grads catch up in 20 years after student loans are payed off. Maybe they don't. It's a coin toss.

 

For those who do need college, I'd also argue that the value is likely to be found in the lower/mid-tier schools and not in the high-end, but it's going to require a lot more work on your part to make that investment pay. I went to school in MS and now work in NYC - my discretionary income has been significantly higher than the majority of my friends who have salaries that are significantly higher because I'm not paying 2Gs a month in student loans and was in a lower tax bracket. Also, the gap between salaries has generally been narrowing every year for the 4-5 years I have been here as I'm nearly making double my starting salary 4 years ago.

 

[Jurgis]

Even in the STEM fields.  I know people personally who work as computer scientists at Adobe and Google who never went to school past high school.  In my own field (Electrical Engineering) I know people who have PhDs who make less than I do (I only have a BSEE).  You could easily do my job with 2 years of schooling and 3+ years of on the job training.  Take some basic electricity, math, and physics courses, maybe a statistics and computer science course or two then jump in and find a good mentor.  The college I went to (WPI) required me to do a humanities project, take writing courses, history courses, economics courses, etc, much of which was just a continuation of high school, none of which contributes much to the work I do, and all of which I could easily have learned on my own with a few good books and/or the internet if I had wanted to.  You could skip much of the first 2 years of college and be just fine. Even the last 2 years there is a lot of unneeded stuff.  Take electrical engineering for example (since I'm familiar with it), I wanted to focus exclusively on digital design and computer engineering, yet I had to take all kinds of analog type courses learning about op amps and the like which had nothing to do with what I wanted to learn (and I don't remember any of what I learned today).  I could easily have fit all the relevant math, science, and engineering courses that I wanted to take and are relevant to what I wanted to do in a 2 year program.  It wouldn't have made me any less effective at my profession, but you can't do that in a University today, to get X degree you need to take this specific list of courses with an occasional elective that you can choose.  There are better ways. And the price you pay in both time and money...there are cheaper ways.

 

I think the generalized-university-education vs. focused-needed-for-profession-knowledge is neverending discussion. :) There are arguments on both sides (and usually neither side changes their minds). :)

 

Where I have worked ( in CS ), we had zero people who never graduated. IMHO, a lot of self educated CS people have giant holes in their knowledge (e.g. algorithm complexity) that bite them and their projects. Good ones figure out the issues and self educate, bad ones... well.

 

Regarding writing - actually I was going to post that this is something that "worthless" humanities degrees teach, which is actually valuable: reading, analyzing, writing, communicating with others. Even in investing you may get people with humanities degrees that do well because they know how to read, how to analyze, how to write. My advisor has said that writing proficiency may affect your career more than your thesis topic. I don't agree with him totally, but there is some truth in what he said.

[rkbabang]

Even in the STEM fields.  I know people personally who work as computer scientists at Adobe and Google who never went to school past high school.  In my own field (Electrical Engineering) I know people who have PhDs who make less than I do (I only have a BSEE).  You could easily do my job with 2 years of schooling and 3+ years of on the job training.  Take some basic electricity, math, and physics courses, maybe a statistics and computer science course or two then jump in and find a good mentor.  The college I went to (WPI) required me to do a humanities project, take writing courses, history courses, economics courses, etc, much of which was just a continuation of high school, none of which contributes much to the work I do, and all of which I could easily have learned on my own with a few good books and/or the internet if I had wanted to.  You could skip much of the first 2 years of college and be just fine. Even the last 2 years there is a lot of unneeded stuff.  Take electrical engineering for example (since I'm familiar with it), I wanted to focus exclusively on digital design and computer engineering, yet I had to take all kinds of analog type courses learning about op amps and the like which had nothing to do with what I wanted to learn (and I don't remember any of what I learned today).  I could easily have fit all the relevant math, science, and engineering courses that I wanted to take and are relevant to what I wanted to do in a 2 year program.  It wouldn't have made me any less effective at my profession, but you can't do that in a University today, to get X degree you need to take this specific list of courses with an occasional elective that you can choose.  There are better ways. And the price you pay in both time and money...there are cheaper ways.

 

I think the generalized-university-education vs. focused-needed-for-profession-knowledge is neverending discussion. :) There are arguments on both sides (and usually neither side changes their minds). :)

 

Where I have worked ( in CS ), we had zero people who never graduated. IMHO, a lot of self educated CS people have giant holes in their knowledge (e.g. algorithm complexity) that bite them and their projects. Good ones figure out the issues and self educate, bad ones... well.

 

Regarding writing - actually I was going to post that this is something that "worthless" humanities degrees teach, which is actually valuable: reading, analyzing, writing, communicating with others. Even in investing you may get people with humanities degrees that do well because they know how to read, how to analyze, how to write. My advisor has said that writing proficiency may affect your career more than your thesis topic. I don't agree with him totally, but there is some truth in what he said.

 

I'm not saying it has zero value, but I'm not sure the value matches the current tuition costs.  If those writing and humanities courses add $50K to your debt load upon graduation, that is a hell of a lot to pay for skills which could have been acquired in other, cheaper, ways.

[Jurgis]

caused him to give opinions that are outside of his circle of competence (politics).

 

WEBs opinions about politics are not outside his circle of competence.

 

Considering that he is wrong everytime he opens his mouth to talk about such things I would disagree with you.

 

Oh, yes, I know that you would disagree with me. I did not expect anything less.

 

And actually WEB was not wrong about anything in politics so far. :)

 

 

Hey Jurgis,  you have to admit..., well anyway, I will admit that if the situation was reversed my opinion of his circle of competence on the matter would be reversed.  If WEB was an anarchist and always said everything I agree with when speaking of politics, I would be saying that he was some kind of genius and that we should all listen to him.  I suspect you would be questioning his competence on the matter and saying that he should just stick to investing.

 

Possibly. :)

 

IMO, Buffett has a good understanding of the political situation, he offers pragmatic solutions that have a chance of going through and working, he acknowledges the difficulties for even pragmatic solutions (from both sides of the bench). This in my opinion marks him as competent in the area.

 

However, you are right that I might consider him incompetent if most of what he proposed did not agree with what I consider to be reasonable solutions. I might even consider him nuts if he supported some irrational beliefs that some wildly successful politicians (who obviously are "competent" by the definition of being wildly successful) do.

 

Take care

 

 

[rkbabang]

I might even consider him nuts if he supported some irrational beliefs that some wildly successful politicians (who obviously are "competent" by the definition of being wildly successful) do.

 

Ha!  Like, all of them!  ;)

[Jurgis]

I'm not saying it has zero value, but I'm not sure the value matches the current tuition costs.  If those writing and humanities courses add $50K to your debt load upon graduation, that is a hell of a lot to pay for skills which could have been acquired in other, cheaper, ways.

 

That's possibly true. I was not writing about costs.

 

OTOH, IMHO the costs are often unoptimized by kids (and parents) the same way majors are unoptimized. Like you said "don't study art history", I can say "go to instate public school, live with parents, get part time jobs" to optimize the costs. A lot of people don't do that.

 

Edit: clarified sentence above.

[rkbabang]

I'm not saying it has zero value, but I'm not sure the value matches the current tuition costs.  If those writing and humanities courses add $50K to your debt load upon graduation, that is a hell of a lot to pay for skills which could have been acquired in other, cheaper, ways.

 

That's possibly true. I was not writing about costs.

 

OTOH, IMHO the costs are often unoptimized by kids (and parents) the same way majors are unoptimized. Like you said "don't study art history", I can say "go to instate public school, live with parents, get part time jobs" to optimize the costs. A lot of people don't do that.

 

Edit: clarified sentence above.

 

Ah, that's where the disconnect is.  I should have said that cost is the reason that more and more people will look to alternatives and that you will see enrollments drop in the future.  Education is always valuable, but there are multiple ways to achieve the same goals.  You make some good points about cutting the costs.  Certainly the cost/value ratio is better at less expensive schools these days, and living at home would reduce the costs tremendously.

 

[ATLValue]

I think moats and good management teams are much much much rarer than people on this board seem to believe

[LC]

The government is going to eat the cost on TRILLIONS of student loan debt.

I'm not sure if they will, but they should. Government policy allowed banks to lend absurd amounts to anyone, because borrowers can't default on it. So the banks lent. And schools raised their prices in turn.

 

Allowing more of a free market would have created a totally different landscape than what we have now. Everyone wanting to study 19th century poetry could still do it, just without 150K of debt. The government failed.

[rkbabang]

The government is going to eat the cost on TRILLIONS of student loan debt.

I'm not sure if they will, but they should. Government policy allowed banks to lend absurd amounts to anyone, because borrowers can't default on it. So the banks lent. And schools raised their prices in turn.

 

Allowing more of a free market would have created a totally different landscape than what we have now. Everyone wanting to study 19th century poetry could still do it, just without 150K of debt. The government failed.

 

I'm glad someone said it before me.  When you subsidize something the demand increases and the costs go up.

 

EDIT:  The next step is to fix the cost with price controls, but then the supply shrinks.  After that the only way out is to have the government take it over completely.  What you then have is the public school system only for higher education and the price really goes through the roof (and the quality through the floor).

 

[DTEJD1997]

The government is going to eat the cost on TRILLIONS of student loan debt.

I'm not sure if they will, but they should. Government policy allowed banks to lend absurd amounts to anyone, because borrowers can't default on it. So the banks lent. And schools raised their prices in turn.

 

Allowing more of a free market would have created a totally different landscape than what we have now. Everyone wanting to study 19th century poetry could still do it, just without 150K of debt. The government failed.

 

I might have agreed with you until a few weeks ago...

 

The "youngsters" (very late 20's & early 30's) I work with are almost ALL on IBR (income based repayment) plans for their student loans.  They pay between $0 & $200 a month on their loans.  This isn't even covering interest payments.

 

Another eye opening thing was that I was playing poker in Greektown Casino with a rough crew of characters.  Surprisingly, the subject of student loans came up & started grousing about them.  Several players openly laughed at me for paying them back.  They said that student loans are "paper" bills.  They are ACTIVELY gaming the system, and paying back nothing or nominal amounts.  Several people at the table said this!  One even had a son at the next table...his son was doing the same thing.  Like father, like son!  There were six people who had similar stories.  One guy was paying his in full.

 

These guys LOUDLY & EXPLICITLY expressed their contempt for their educations and the chances that the government will get paid back.

 

I was shocked at how many people in that group of people had student loans...and their attitudes.  I suspect this is fairly common...

 

Thus, the government is going to take a huge bath.  You've got a (large?) group of people with open contempt & a large group of people (co-workers) who want to pay back the loans, but simply don't have the capability and likely never will.

[rukawa]

To be fair, writser never said which side of the coin he is or should be on.

 

I didn't because I'm not sure about that yet.

 

"The Outsiders" likely suffer from survivor bias and possibly selective selection bias. This does not diminish of what the Outsiders from the book did. But it's likely that identifying Outsider in advance is harder than people think.

 

I think a lot of (value) investors tend to get overexcited about the narrative and don't pay enough attention to the numbers. The book exemplifies this bias. "Sure, this is a roll-up, is trading at 50x FCF, has a terrible balance sheet and generates no profit yet. But the CEO is an outsider!". Usually followed by the most dangerous words in investing: "this time it's different.".

 

This year we had at least two "outsider" companies which did not do well...Ocwen and Valeant.

[LC]

So I'll just give my thinking, I graduated ~6 months ago from a grad school with about 40K of "student debt". Now, I have cash in the bank to pay this off today if I wanted, I had the cash before I applied to school from saving for years.

 

I said, screw paying for grad school in cash: I'm taking out loans, and sticking that money in the stock market. Turned out to be a good decision (probably 80% luck, 19% copying this board, 1% me being functional enough to navigate an online brokerage account).

 

But now having graduated, it's apparently time to pay it back, and I'm in the same boat as your friends from the poker table. Heck I'm not even sure if I should pay it back. What are "they" going to do, come after me with a bat? Or maybe I just pay the minimum and kick the can down the road as long as possible. Maybe the gov't will eat the bill in 15 years. Why pay it back in that case? Maybe lock the interest rate, and sit on it.

 

And you know, the only reason I'd consider this is because what you mentioned is so prevalent. NOBODY is paying these things, so the ones that do are the suckers at the table.

[oddballstocks]

 

Regarding writing - actually I was going to post that this is something that "worthless" humanities degrees teach, which is actually valuable: reading, analyzing, writing, communicating with others. Even in investing you may get people with humanities degrees that do well because they know how to read, how to analyze, how to write. My advisor has said that writing proficiency may affect your career more than your thesis topic. I don't agree with him totally, but there is some truth in what he said.

 

I have a degree in Systems Analysis, think a weird hybrid Computer Science and Math degree.  I have a minor in Sociology.  It's been 12/13 years since I graduated and looking back the Sociology was FAR more valuable than Systems Analysis.  The Systems Analysis taught me algorithms and assembly language and how to think about computers, but I learned the real tricks of the trade working.  Sociology taught me how to think, how to write, how to view things.  My Oracle 7/8 knowledge is useless know, but writing and knowing how to think have become more valuable over time.

 

Someone who writes and communicates well is regarded as smarter than someone who has more raw brain power but struggles to express their ideas.

[oddballstocks]

So I'll just give my thinking, I graduated ~6 months ago from a grad school with about 40K of "student debt". Now, I have cash in the bank to pay this off today if I wanted, I had the cash before I applied to school from saving for years.

 

I said, screw paying for grad school in cash: I'm taking out loans, and sticking that money in the stock market. Turned out to be a good decision (probably 80% luck, 19% copying this board, 1% me being functional enough to navigate an online brokerage account).

 

But now having graduated, it's apparently time to pay it back, and I'm in the same boat as your friends from the poker table. Heck I'm not even sure if I should pay it back. What are "they" going to do, come after me with a bat? Or maybe I just pay the minimum and kick the can down the road as long as possible. Maybe the gov't will eat the bill in 15 years. Why pay it back in that case? Maybe lock the interest rate, and sit on it.

 

And you know, the only reason I'd consider this is because what you mentioned is so prevalent. NOBODY is paying these things, so the ones that do are the suckers at the table.

 

Your attitude isn't unpopular, but if these are just forgiven what happens to the people who paid them, or those who paid cash for school?  To me this seems like a very quick way to drive a huge wedge between age groups.  Those above 35-40 have a small amount or no school debt, and those under have a lot.  But the old guys running companies are in the older bucket, any chance there could be some spiteful discrimination?

 

My wife and I don't have any school debt.  But if the government is just going to give out money why don't they just pay off my house or something? At the same time what universities are charging is bordering on comical.  In the grab for as much cash as possible universities have done themselves in.  What used to be a third-rail view, that going to college wasn't necessary is now catching on.  I think they've made their own bed.

 

I would hesitate to hire someone with a lot of debt including school debt.  People who are skating close to the edge can quickly end up in financial distress which has repercussions for work performance as well as increases the risk of fraud or theft.  Maybe it's not popular to say that out loud, but it's something I think about.

[DTEJD1997]

I would hesitate to hire someone with a lot of debt including school debt.  People who are skating close to the edge can quickly end up in financial distress which has repercussions for work performance as well as increases the risk of fraud or theft.  Maybe it's not popular to say that out loud, but it's something I think about.

 

That is a good point!  Too much debt is a bad thing, which leads to other bad things resulting in a cascade of problems.

 

Just wait till the attitude of we don't want workers with large amounts of student debt starts spreading...going to have a LOT of disgruntled graduates...

[ScottHall]

You guys are right. Outside of a few fields, if you go to college you're a mark.