And on a lighter note...

Mass enrollments, qualifications and tax-payer funding.

Well, the Herald reveals the investigation will roll on.  I suspect that it may go for some time.

It would be a good time for organisations to run a few 'mini' investigations themselves.  So far, no organisation has been found to be systemically at fault.  What has been revealed are pockets of poor practice, or 'very dubious practice', that are allowed to develop due to poor oversight by the organisation.

An old friend of mine used to say 'if you expect, inspect'.  I always hated that saying, but perhaps he had a point.

Financial literacy

49% of Meridian shares (MELCA NZX) were released to the public by the National Government about a year ago.

The shares were valued at $1.50 each.  However, in an effort to sweeten the deal, the buyer only had to pay $1 per share initially.  In eighteen months (I think) the owners of the shares are obligated to pay the remaining 50 cents.  In the meantime the owners of the shares still receive the full dividends, so these can help offset the remaining 50 cents.

It was a good deal

Many New Zealanders who had never bought shares bought these.  They are now faced with an interesting mathematical question.  Next year they will have to pay the remaining 50 cents on each share they purchased.

There are two choices as far as I can see.

One: Pay the remaining amount out of cash reserves (savings, or whatever)
Two: Sell off existing MELCA shares to the same value as that owing.

But which is the better option? 

I have no idea...  Trying to think this through...

Lets say you own 10,000 shares.  This means you have paid $10,000 so far and you owe $5000.  The share price is currently 1.73.

Option one: If you pay the $5000 out of cash you are getting a 23 cent discount.  Right? (tell me if I'm wrong please!).  You are still only paying $1.50 for shares currently worth $1.73.  As soon as you buy them presumably the price shifts to $2.23 ($1.73 + .50).  In total you have paid $15,000 and the investment is worth $22,300.  So $22300 - $15000 = $7300 Cap gain.  Or a 48.6% increase.

Option two: You sell 2890 shares for $5000 (at the current price).  This leaves you with 7110 shares that are now worth $15855 (at 2.23).  In total you have paid $10,000 for 7110 shares and the investment is worth $15855.  So $15855 - $10000 = $5855 cap gain.  Or a 59% increase.

Option two looks better right.  But, you are actually giving up valuable shares, worth $5000 in real terms.  And, you are giving up the dividend.  And any capital gain.

Two questions: 

1.  I am making a mistake.  Can you see it? (something to do with 49% or 59% gain of what?)

2.  Where is the financial resource that New Zealanders can go to to get the answer?  (Website?) Or is this a case of 'Mum and Dad' investors not fully benefiting from the sale of Meridian because they lack financial literacy?  The political left told us not to buy (a mistake), and the right said to buy,  but then have not provided information (should they?).

Please, someone in the know feel free to enlighten us. I would really appreciate some feedback on what they think.

Financial literacy - a quick critique

Current financial literacy initiatives tend to focus on issues that were a concern of the 90's, like basic consumer skills. I find these very condescending and short sighted.  2014 presents a range of more complex financial thinking that requires a new set of skills.  Someone will say that the poor don't buy shares.  Granted, but neither does the financial literacy of yesteryear attempt to develop wealth - its focus was primarily about meeting immediate needs - not wealth creation.  Basically how to live poor but still pay all the bills.  Not good enough.  

Time to think a bit more strategically

Ninja math

Talk at our house lately has been about inspiring young people to persist with challenging maths problems ALONE, only asking for help once they have exhausted all other possibilities.  In other words developing 'agency' - the ability to act.

Non-agentic behaviour is getting stuck and immediately asking for help.  Research shows that many learners lack the emotional skills to solve a task once they get stuck, or hit a wall.  All they can do, is ask for help, and hope they get it.  Hence they become helpless.  (see here and here for learned helplessness)

Not so the true mathematician - the true mathematician loves hitting the wall, because he/she can dig into their agency, their ability to ACT, to think, experiment, play, to solve and conquer that problem in a unique way.

The trick is to cultivate these dispositions.  Young people however, often have trouble knowing what to do when they get stuck.  I've been thinking about how to help them develop the skills.

Anyway, below was a poster I designed to be used with 10-13 year olds.  It's a draft, unfinished, but if anyone wants to take the idea and make it rock, feel free.

Tips for home educators teaching maths

Three tips for developing maths skills in a home-education environment

No 1. Before any math work begins ask you child what they did yesterday (with maths). Have them explain as much as possible, in as much detail as possible. This helps your child develop a sense of continuity between math lessons and work. It also has been linked to significantly better learning outcomes. There is some very cool research around this (another time). Suffice to say this one difference is linked to significant increases in learning outcomes.

No 2. The pokerface. Whenever your child gives you an answer to a problem NEVER let on whether it is correct or not. Hear their answer and then say “tell me how you worked it out”. As they talk through their thinking process they do two things. Firstly, if they were wrong in the first case they may self-correct. My Masters research found that learners often self-corrected as they explained their thinking even when they didn't realise it. Secondly, the process of articulating their process will help clarify and consolidate their thinking. Finally, be sure to reward thinking and effort, not correct answers.

No 3. Use equipment as much as possible and where not possible have your children draw pictures. The nature of maths is that it becomes more abstract as it progresses but the human mind passes through stages before this is possible. Abstract thinking MUST be built on a foundation of empirical knowledge. For example if you teach a half plus one third equals five-sixths without your child being able to get a sense of what this really means or looks like in time your child will struggle to make sense of new concepts. Getting children to draw pictures to explain their thinking rocks. You can then use those pictures with your children – asking them to explain what they have drawn and why. Also, save those pictures and pull them out six months later and ask you children to explain what they think was going on.

Second best question you can ask learners when teaching mathematics

The number one greatest question in  your math/numeracy educational arsenal is here.

The second is the following question:

If somebody was going to make a mistake with this, which part would they most likely make the mistake?

Get them to verbalize it, and be very clear.

There are two good reasons for this.

One, the part they identify will most likely be the very part they struggled with.

Two, speech is the key to learning,  By getting learners to talk thorough the problem they are actually processing the information.