Human capital

WEBVTT
Kind: captions
Language: en

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If you wanted to build
or produce most anything,

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I want to think a little bit about
what you would need to do it.

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I have some pictures here,

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just to get our imagination going.

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These guys are up to
making something with iron

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or maybe making iron bars,

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or making some type of thing out of iron.

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Right here is an old picture

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of some planes being made in a factory.

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Let's just think, in very general terms,

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of things you need to produce anything.

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First of all, you're
going to need some land.

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That's definitely true
if you're running a farm,

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or if you're trying to produce timber.

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You definitely need land
even if you have a factory.

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Obviously, both of these factories

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are sitting on top of some land.

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Then, you're going to
need a building, maybe.

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Most probably a building.

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You're going to need
some tools and equipment.

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Tools and equipment.

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Then, you might need some raw material.

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In this case it might be iron.

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Over here too, you would need some metal.

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You might need some
electricity or some oil

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to keep the production lines going.

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You're going to need some raw materials.

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Raw materials.

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Then, you're going to
need people to actually

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work in your factory.

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These guys putting these hot bars of iron

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inside of whatever this
thing right over here is,

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or the people working on the factory line.

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You don't see any here.

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This must be off time.

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You need people to actually
work on the factory line,

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to tighten bolts and
all the rest of things.

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You're going to need labor.

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If you put all of these
things together ...

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Let me put them all together.

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If you put all of these things together

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then you should be able
to produce your product.

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You'll be able to output
whatever you set yourself to do.

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In the classical sense,

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when you think about all
of these different things

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that you might put into production,

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sometimes they're referred to
as the factors of production,

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they separate out ...

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This is in the classical sense.

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They separate out building
and the tools and equipment

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as one of the classes.

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You have land.

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You have labor and you have buildings.

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Sometimes, just to throw it in there,

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sometimes you'll throw in management

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or organization in here.

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Someone needs to figure out

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how to layout all of this type of thing.

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This could also be a factor of production.

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Buildings and tools and equipment,

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they're kind of separated
out from everything else.

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In the classical sense,

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they're referred to as capital.

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They are referred to as capital.

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They kind of have this
separate distinction,

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because these are things
that are made by human beings

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for the specific purpose
of producing other things.

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Obviously, there are other things

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that are made by human beings.

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For example, you could have a ...

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Let me think of something
that's nicely ...

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A hat.

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A hat is clearly made by a human being,

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but it's not produced
to produce other things.

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It's meant for fashion.

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It's meant to kind of improve
someone's quality of life.

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It's not made to make other things.

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In this case, the building and the tools,

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the whole reason why they were made

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is to make other things.

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In the classical sense,

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they are referred to as capital.

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If we go to kind of more modern times,

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you'll hear words like "human capital"

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or "financial capital."

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You'll see a lot of
different types of capital

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that people try to talk about.

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Human capital or financial capital,

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so what are they talking about?

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In the classical sense,

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capital were things that people made

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so that those things can
help us make other things.

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The analogy is, is human capital

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isn't just straight up labor.

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It plays a role in it.

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In modern times, when people
talk about human capital,

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they're trying to make the same analogy.

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They're kind of
investments made in humans,

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so that those humans are better
at producing other things.

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Human capital, when people refer to it,

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they are things like education, skills,

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talents that someone might have,

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talents, experience that someone
might have inside of them

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or that were invested in them,

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(if you think about the
situation of education)

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that make them more productive.

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They're things that are
thrown into a human being

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that make them able to
produce more output.

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This is what people refer
to as "human capital"

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and how it's different than
just straight up labor.

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Labor is just ...

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Look, any human being can go there

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and move something from
one place to another

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or pick something up
and put it on a shelf,

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or take it off of a shelf
and put it on another shelf.

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What human capital is, are
the investments in that person

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that make them more
productive, more skilled,

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more able to do more interesting things.

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The same thing is true

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(just to throw it in there,

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just so you can kind of see this analogy)

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is financial capital.

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You could just say, "Look,
there's something …"

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There's money for money's sake

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that you could use to buy a hat,

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or that you could use to buy

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really almost any of these other things.

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When people talk about financial capital

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they're talking about money

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that's being used for the purpose

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of producing more output.

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You could view it as the money

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that you actually need to run a factory.

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For example, they'll
call it working capital.

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It's the money in the cash register,

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so that you can actually run your store

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or run your restaurant.

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Or, it could be money that's
put to work by buying ...

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Kind of traditional capital,

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for buying these capital goods,

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so that you can produce more output.

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The whole idea here,

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I just want to introduce
you to the idea of capital.

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It's central to the word
capitalism in it's classical sense

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and then maybe in the more modern sense.

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Especially when people talk about

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something like human capital.


Risk and reward introduction

WEBVTT
Kind: captions
Language: en

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Whenever people talk
about investing,

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the terms risk and reward
tend to come up a lot,

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and they usually tend
to come up together.

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Somehow implying that
the more risk you

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take, the more reward that
you might be able to get.

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And that's actually
what it is implying.

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But what I want to
do in this video

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is give a little bit of
an introduction to that,

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or a little bit of context,
and a little bit more

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structure on how do you
think about risk and reward.

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So let's say that
we have $1,000,

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and we want to figure out what
we can do with this $1,000.

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Well, one option
is we could just

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put it into a savings account.

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So here is one option.

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So we could put it
into a savings account.

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And in this situation,
our reward--

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I'll start with
the reward first--

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is we'll get-- I don't
know-- 1% in interest

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per year, 1% annual interest.

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So after a year, we'll
have roughly $1,010.

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We got 1% on our $1,000.

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So we get a little
bit of a reward.

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What's our risk?

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So the risk here--
I'll write risk

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in a different color--
what is the risk here?

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Well, if I'm putting it
into a savings account--

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and I'm assuming I'm putting
it into an FDIC insured savings

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account.

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Let me put that over here.

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If you do open a
savings account,

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it should be FDIC insured.

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That means that it's being
insured by the Federal Reserve.

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Which means that if
for whatever reason

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that bank were to
fail, below some limit,

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the Fed will insure your money.

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So even if this
bank fails, and it

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loses all of its
money and everything,

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you'll still get
your deposit back.

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So if you're
investing, or if you're

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putting money in an FDIC
insured savings account,

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your risk is essentially 0.

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You are guaranteed to
get that $1,000 back,

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regardless of what
happens to that bank.

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So you have very
little risk there.

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But you might say, look, you
know, this is a good risk,

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but I feel like I can get
more than 1% on my money,

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let me think about the other
places that I could invest it.

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Well, you could--
and obviously I'm

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not going to be exhaustive on
all of the different investment

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options, I just want to give
you a sense of risk and reward.

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You could say, well, maybe
I could lend to the money

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to a very reputable company.

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So let me say, lend money
to reputable company.

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And maybe this company
has billions and billions

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of dollars in assets.

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It's been around for
hundreds of years.

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It generates cash
on a regular basis.

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There's really very
few circumstances

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in which you could imagine
that this company would not

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be able to pay off its debt.

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And you lend money to
a reputable company

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by essentially
buying their bonds.

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When you buy a
company's bonds, you

00:02:52.620 --> 00:02:54.640
are lending money
to that company.

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So that's just the way
you should think about it.

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So the reward here, if you lend
your money to this company,

00:03:01.220 --> 00:03:08.730
they will pay you 6% in annual
interest on your $1,000.

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So 6% on the first
year, you'd get $60.

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This is six times
more than what you

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were getting in the
savings account.

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What's the risk here?

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Well, it's not 0 anymore.

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It's not FDIC insured.

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The Federal Reserve isn't
saying that they'll either

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give the money if the
bank goes out of business,

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or they'll print the money
if they don't even have it.

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Here, the risk is that the
business defaults on the loan.

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So the company itself
might go bankrupt.

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If it goes bankrupt,
then all the people

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that the company
owes money to will

00:03:45.580 --> 00:03:47.730
go after that company's assets.

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But maybe you are low
on the pecking order,

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or maybe the
company doesn't have

00:03:50.954 --> 00:03:52.560
enough assets to
pay everyone back.

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So there is some risk.

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Any business could
go out of business,

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you never know
what might happen.

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But since this is a
very reputable company,

00:04:00.530 --> 00:04:02.440
and as we said it
has a lot of assets,

00:04:02.440 --> 00:04:06.580
it has a very stable business,
it does good in boom times

00:04:06.580 --> 00:04:10.440
and in recessions, this is a
low risk of business default.

00:04:10.440 --> 00:04:13.240
So I'll write, low
risk, right over here,

00:04:13.240 --> 00:04:17.269
because we're assuming it
is a reputable company that

00:04:17.269 --> 00:04:19.790
has a lot of assets,
and all the rest.

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Now let's say that even that
6%, you know, it's all right,

00:04:23.610 --> 00:04:26.300
but you feel like
you could get more.

00:04:26.300 --> 00:04:27.570
You could do better.

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So let's say that
you have a friend who

00:04:31.310 --> 00:04:33.840
is a-- let's say that
he's just starting

00:04:33.840 --> 00:04:39.830
his career as a doctor, so he
says he has a nice, stable job.

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So he's just starting his career
as a doctor, so stable income.

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He's making $200,000 a year.

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But he's just out
of medical school,

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and he figures he
wants to buy a house.

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So he's just
starting, and he wants

00:05:01.210 --> 00:05:03.800
to find people who can help
him with the down payment

00:05:03.800 --> 00:05:05.260
on the house.

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So here, your reward.

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And he says, anyone who's
willing to lend to me,

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I will give them 8% annual
interest on their money.

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And it looks pretty good,
stable income, it's only $1,000.

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He's not buying an
outlandishly expensive house.

00:05:26.230 --> 00:05:28.720
He's buying a $200,000
house on which

00:05:28.720 --> 00:05:31.050
he wants to put a
$40,000 down payment.

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Seems well within
his means to pay it.

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But there's always some
risk that he doesn't pay.

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Who knows?

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Hopefully this doesn't
happen, but maybe something

00:05:43.900 --> 00:05:44.940
happens to him, himself.

00:05:44.940 --> 00:05:46.606
Maybe he's not able
to work as a doctor.

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Maybe something
happens to his health.

00:05:48.760 --> 00:05:53.050
Maybe he has of some type
of addictive personality,

00:05:53.050 --> 00:05:55.397
and he likes to drink
away all of his money.

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Or he likes to gamble it
away, and that's actually

00:05:57.480 --> 00:05:59.270
why he needs loans
to begin with.

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So there is some risk.

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There's a risk that
he doesn't pay.

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But by all indications, he looks
like a pretty safe character.

00:06:05.260 --> 00:06:08.250
But it's definitely
riskier than this company,

00:06:08.250 --> 00:06:11.270
because you have no assets to
go after if he doesn't pay.

00:06:11.270 --> 00:06:16.100
Companies can't randomly get
hit by a bus, a human being can.

00:06:16.100 --> 00:06:19.410
Companies, for the most part,
cannot become alcoholics,

00:06:19.410 --> 00:06:20.170
a human can.

00:06:20.170 --> 00:06:20.880
Who knows?

00:06:20.880 --> 00:06:21.632
We don't know.

00:06:21.632 --> 00:06:23.090
But there are
definitely more risks

00:06:23.090 --> 00:06:25.970
associated with this
individual doctor who does not

00:06:25.970 --> 00:06:27.790
have assets you can go after.

00:06:27.790 --> 00:06:29.570
But maybe this is also
not enough reward.

00:06:29.570 --> 00:06:31.330
You're like, you
know, I heard that I

00:06:31.330 --> 00:06:36.150
can do even better than
this in the stock market.

00:06:36.150 --> 00:06:38.410
So you look at another option.

00:06:38.410 --> 00:06:40.255
So let's say you
invest in the market.

00:06:48.041 --> 00:06:49.790
And you're just going
to invest in a bunch

00:06:49.790 --> 00:06:52.750
of-- a broad portfolio,
kind of investing

00:06:52.750 --> 00:06:54.260
in the market as a whole.

00:06:54.260 --> 00:06:57.400
The reward here would be
expected return of the market.

00:06:57.400 --> 00:06:59.410
So you look at historical
results in the market

00:06:59.410 --> 00:07:01.500
and you say, look it, goes
up and down every year.

00:07:01.500 --> 00:07:03.716
But over long periods of
time, it looks like people--

00:07:03.716 --> 00:07:05.090
and this isn't
the exact number--

00:07:05.090 --> 00:07:10.250
but it looks like people have
averaged approximately 10%

00:07:10.250 --> 00:07:11.180
per year.

00:07:11.180 --> 00:07:13.690
So that looks pretty
good, but what's the risk?

00:07:13.690 --> 00:07:17.220
Well, the risk is that
this expectation is just

00:07:17.220 --> 00:07:21.680
based on what the historical
returns in the market were.

00:07:21.680 --> 00:07:23.830
There are huge periods of
time in the market-- I'm

00:07:23.830 --> 00:07:26.850
talking 10, 20, 30 years
where the market is flat.

00:07:26.850 --> 00:07:29.530
Where the market
could even go down.

00:07:29.530 --> 00:07:32.240
In any given year, the market
could go down in the double

00:07:32.240 --> 00:07:37.240
digits or in the 30 , 40% even,
in a really, really bad year.

00:07:37.240 --> 00:07:39.170
You really aren't
sure whether you're

00:07:39.170 --> 00:07:41.330
going to get your 10% per year.

00:07:41.330 --> 00:07:44.747
So I would say the risk
here is volatility.

00:07:44.747 --> 00:07:46.830
And volatility just means
it could go up and down.

00:07:46.830 --> 00:07:47.970
It jumps up and down.

00:07:47.970 --> 00:07:50.864
It's not going to be a constant
upward trend, like your savings

00:07:50.864 --> 00:07:51.530
account will be.

00:07:51.530 --> 00:07:52.030
Volatility.

00:07:54.440 --> 00:07:56.980
And you have a good chance
that you could actually

00:07:56.980 --> 00:07:59.160
lose the money that
you're investing.

00:07:59.160 --> 00:08:02.160
It could go down in any year,
in any month, in any five years,

00:08:02.160 --> 00:08:02.880
in any 10 years.

00:08:02.880 --> 00:08:06.520
So once again, it seems
like a kind of risky thing.

00:08:06.520 --> 00:08:09.780
And you can very
easily lose everything.

00:08:09.780 --> 00:08:11.916
And let's say that even
10% isn't enough for you.

00:08:11.916 --> 00:08:14.040
You say, hey, I want to
look at things that maybe I

00:08:14.040 --> 00:08:15.800
can get even a better return.

00:08:15.800 --> 00:08:18.980
So you have your brother-in-law,
who's been out of work

00:08:18.980 --> 00:08:20.480
for a little bit.

00:08:20.480 --> 00:08:23.810
So let me write the
brother-in-law right over here.

00:08:23.810 --> 00:08:27.270
Your brother-in-law has been
out of work for a little bit,

00:08:27.270 --> 00:08:33.539
and he says that all he needs to
start his new guaranteed money

00:08:33.539 --> 00:08:38.650
making scheme is $1,000, so
he can buy the equipment,

00:08:38.650 --> 00:08:40.789
so that he can start
it up in his garage.

00:08:40.789 --> 00:08:44.015
And the reward-- And
there's multiple ways

00:08:44.015 --> 00:08:45.140
we could set up the reward.

00:08:45.140 --> 00:08:47.580
We could make it so that
he borrows money for you.

00:08:47.580 --> 00:08:50.392
We could make it so that you
own part of the business.

00:08:50.392 --> 00:08:51.850
So let's say the
reward is, you get

00:08:51.850 --> 00:08:53.330
a 50% stake in the business.

00:08:59.060 --> 00:09:02.130
And, let's say that your
brother-in-law is right,

00:09:02.130 --> 00:09:04.130
and this becomes a
million dollar business.

00:09:12.000 --> 00:09:14.940
So this is a very, very,
very, very high reward,

00:09:14.940 --> 00:09:17.190
if what your brother-in-law
is telling you is correct.

00:09:17.190 --> 00:09:18.820
But what's the risk?

00:09:18.820 --> 00:09:21.890
Well, the risk here is
obviously that he's not correct

00:09:21.890 --> 00:09:23.900
and that he squanders
all of your money.

00:09:23.900 --> 00:09:24.740
So lose everything.

00:09:27.630 --> 00:09:32.060
And not only could you lose the
monetary money that you put in,

00:09:32.060 --> 00:09:33.850
it could also ruin
your relationship

00:09:33.850 --> 00:09:36.920
with your brother-in-law
and maybe your spouse.

00:09:36.920 --> 00:09:40.190
So, risk relationships.

00:09:40.190 --> 00:09:44.540
Maybe I should put, you
risk family happiness.

00:09:44.540 --> 00:09:46.900
Once your brother-in-law
loses all of your money,

00:09:46.900 --> 00:09:48.950
it won't be so easy at
Thanksgiving anymore

00:09:48.950 --> 00:09:51.590
to have a civil conversation.

00:09:51.590 --> 00:09:53.450
So in general, the
overlying-- I probably

00:09:53.450 --> 00:09:54.960
did more of these
scenarios than I

00:09:54.960 --> 00:09:57.570
needed to-- but I think
you see the general trend.

00:09:57.570 --> 00:10:01.290
The more risk you take in
general, the more of reward

00:10:01.290 --> 00:10:03.660
you should expect to get.

00:10:03.660 --> 00:10:05.720
Or the more reward that
you're expecting to get,

00:10:05.720 --> 00:10:07.790
there's probably
some risk there.

00:10:07.790 --> 00:10:09.600
And if there's
something that looks

00:10:09.600 --> 00:10:13.240
like it's really safe with
the really high reward,

00:10:13.240 --> 00:10:16.280
one of those two things
are probably not true.

00:10:16.280 --> 00:10:18.390
So if we were to
plot all of these,

00:10:18.390 --> 00:10:20.420
and I haven't
really quantified--

00:10:20.420 --> 00:10:23.850
I haven't given you a
way of measuring risk.

00:10:23.850 --> 00:10:25.770
In future videos we
can think about that,

00:10:25.770 --> 00:10:29.190
and academics have thought
about ways of measuring risk.

00:10:29.190 --> 00:10:32.880
So that's risk and reward,
if you plot it all over here.

00:10:32.880 --> 00:10:34.140
So the savings account.

00:10:34.140 --> 00:10:35.850
It's 0 risk.

00:10:35.850 --> 00:10:37.760
So this is the savings
account over here.

00:10:37.760 --> 00:10:41.240
It's 0 risk, and
your reward is 1%.

00:10:41.240 --> 00:10:43.520
So this is 1% right over here.

00:10:43.520 --> 00:10:45.740
The lending to a
reputable company.

00:10:45.740 --> 00:10:47.664
It's a little bit higher risk.

00:10:47.664 --> 00:10:48.830
So this one right over here.

00:10:48.830 --> 00:10:51.670
It's a little bit higher
risk, and your reward is 6%.

00:10:51.670 --> 00:10:54.150
So let's say this is
6% right over here.

00:10:54.150 --> 00:10:55.770
So it's a little
bit higher risk.

00:10:55.770 --> 00:10:57.870
I'm just saying
risk is increasing.

00:10:57.870 --> 00:10:59.400
If you lend to the doctor.

00:10:59.400 --> 00:11:02.010
So let me pick another color
here, that I haven't used.

00:11:02.010 --> 00:11:04.220
If you lend to the doctor,
once again, the risk

00:11:04.220 --> 00:11:06.110
is a little bit
higher than lending

00:11:06.110 --> 00:11:08.380
to that company or
the savings account.

00:11:08.380 --> 00:11:10.790
Once again, a little
bit higher reward.

00:11:10.790 --> 00:11:12.110
Little bit higher reward.

00:11:12.110 --> 00:11:14.370
You now have an 8% reward.

00:11:14.370 --> 00:11:16.650
Investing in the stock market.

00:11:16.650 --> 00:11:19.360
Let me pick a color
I haven't used yet.

00:11:19.360 --> 00:11:21.570
Investing in the stock
market, Once again,

00:11:21.570 --> 00:11:23.470
higher risk, but
also a higher reward.

00:11:23.470 --> 00:11:25.490
Maybe 10 per year.

00:11:25.490 --> 00:11:26.880
That's 10% right over there.

00:11:26.880 --> 00:11:29.560
Your brother-in-law,
super high risk,

00:11:29.560 --> 00:11:31.100
probably off the
charts over here,

00:11:31.100 --> 00:11:32.630
but also super high reward.

00:11:32.630 --> 00:11:34.450
So maybe it might be like that.

00:11:34.450 --> 00:11:38.210
But the general idea is, the
more risk, the more reward.


Estate tax introduction

WEBVTT
Kind: captions
Language: en

00:00:00.463 --> 00:00:01.548
What I want to do in this video

00:00:01.548 --> 00:00:07.044
is think a little bit
about the estate tax.

00:00:07.044 --> 00:00:09.063
As the name of the tax implies,

00:00:09.063 --> 00:00:11.468
it is a tax on someone's estate

00:00:11.468 --> 00:00:13.626
or when someone passes away,

00:00:13.626 --> 00:00:16.670
it is a tax on what they
want to leave behind

00:00:16.670 --> 00:00:19.009
to whoever they want to leave it to

00:00:19.009 --> 00:00:20.673
either in their will or in their family

00:00:20.673 --> 00:00:22.467
or whoever they want to
leave their stuff to.

00:00:22.467 --> 00:00:28.777
Sometimes it's referred
to as an inheritance tax

00:00:28.777 --> 00:00:31.241
and sometimes you'll
hear it talk this ways

00:00:31.241 --> 00:00:32.403
on the news,

00:00:32.403 --> 00:00:34.068
maybe it's a little bit derisive.

00:00:34.068 --> 00:00:38.925
It's called a death tax.

00:00:38.925 --> 00:00:41.814
The general idea, let's say that right now

00:00:41.814 --> 00:00:43.474
my entire net worth,

00:00:43.474 --> 00:00:50.997
I am worth $3 million
and then I pass away.

00:00:50.997 --> 00:00:55.725
This $3 million goes into my estate.

00:00:55.725 --> 00:00:58.258
This is my estate.

00:00:58.258 --> 00:01:00.557
So this $3 million could
be all of my savings,

00:01:00.557 --> 00:01:01.795
could be my stock portfolio,

00:01:01.795 --> 00:01:03.148
it could be the value of my land,

00:01:03.148 --> 00:01:03.790
my real estate.

00:01:03.790 --> 00:01:04.535
Everything I own.

00:01:04.535 --> 00:01:05.325
My car.

00:01:05.325 --> 00:01:06.992
Everything combined is worth $3 million.

00:01:06.992 --> 00:01:10.453
It goes into my estate after I pass.

00:01:10.453 --> 00:01:12.982
Let's say I leave everything in my estate

00:01:12.982 --> 00:01:16.791
to my daughter.

00:01:16.791 --> 00:01:20.051
I leave it to my daughter.

00:01:20.051 --> 00:01:24.249
It's at this point that the
estate tax comes into question

00:01:24.249 --> 00:01:26.873
of how much money will my daughter get.

00:01:26.873 --> 00:01:28.783
It turns out for $3 million

00:01:28.783 --> 00:01:34.955
my daughter is exempt for
inheritance from an individual.

00:01:34.955 --> 00:01:37.706
The first $5 million are exempt.

00:01:37.706 --> 00:01:41.991
In this situation where I'm
leaving $3 million for my daughter

00:01:41.991 --> 00:01:49.014
she actually will get
the entire $3 million.

00:01:49.014 --> 00:01:50.786
If, let's say I'm even richer than that.

00:01:50.786 --> 00:01:54.112
Let's say that I have $6 million.

00:01:54.112 --> 00:01:55.864
Let's say the scenario
where I have $6 million

00:01:55.864 --> 00:02:01.455
it all goes to my estate after my death

00:02:01.455 --> 00:02:05.274
and now the first $5 million is exempt.

00:02:05.274 --> 00:02:08.857
Let me write my daughter over here.

00:02:08.857 --> 00:02:15.400
My daughter will get the
first 5 million tax free

00:02:15.400 --> 00:02:18.453
and then the increment
above that exemption,

00:02:18.453 --> 00:02:21.331
the increment above what has been excluded

00:02:21.331 --> 00:02:23.921
will then be taxed at a certain rate

00:02:23.921 --> 00:02:25.855
and that rate is constantly changing.

00:02:25.855 --> 00:02:27.251
For the sake of simplicity

00:02:27.251 --> 00:02:29.087
I'm going to go with the 35%

00:02:29.087 --> 00:02:32.229
and that's actually the rate in 2011.

00:02:32.229 --> 00:02:33.922
The rest of the 1 million,

00:02:33.922 --> 00:02:41.224
the 1 million taxed at 35%.

00:02:41.224 --> 00:02:45.118
The federal government will
tax 35% of the 1 million.

00:02:45.118 --> 00:02:52.771
They will essentially take
350,000 for themselves

00:02:52.771 --> 00:02:57.386
and my daughter will be
left with 5,650,000, right?

00:02:57.386 --> 00:02:59.654
Because of this million
you'd take out 350,000,

00:02:59.654 --> 00:03:02.636
you have 650,000 left.

00:03:02.636 --> 00:03:14.789
My daughter in this situation
will be left with $5.65 million.

00:03:14.789 --> 00:03:17.268
The federal government took 350,000.

00:03:17.268 --> 00:03:23.465
If I am super rich, let's
say that I am worth,

00:03:23.465 --> 00:03:25.004
let me make a number to make the math easy

00:03:25.004 --> 00:03:27.003
so that I don't have to
get a calculator out.

00:03:27.003 --> 00:03:33.759
Let's say that I am worth $1,005,000,000.

00:03:33.759 --> 00:03:35.784
This is my net worth.

00:03:35.784 --> 00:03:40.590
In this situation, the first
5 million will be excluded.

00:03:40.590 --> 00:03:45.784
My daughter will get
the 5 million directly,

00:03:45.784 --> 00:03:46.752
that will be excluded.

00:03:46.752 --> 00:03:50.844
Then everything above that
will be taxed at the 35%.

00:03:50.844 --> 00:03:55.647
In this situation you have
$1 billion taxed at 35%.

00:03:55.647 --> 00:04:01.514
1 billion at 35%.

00:04:01.514 --> 00:04:06.369
In this scenario the federal government

00:04:06.369 --> 00:04:12.784
will take $350 million

00:04:12.784 --> 00:04:14.712
and so that would leave of this billion

00:04:14.712 --> 00:04:18.287
650 million left my daughter.

00:04:18.287 --> 00:04:20.957
In total, she would get this 650 million

00:04:20.957 --> 00:04:23.536
plus the 5 million that was excluded.

00:04:23.536 --> 00:04:29.253
She would end up with a
total of $655 million.

00:04:29.253 --> 00:04:30.713
I wouldn't feel too bad for her,

00:04:30.713 --> 00:04:32.652
she should be pretty okay.

00:04:32.652 --> 00:04:34.714
That's just how the estate tax works

00:04:34.714 --> 00:04:37.715
and these examples I
gave with the 5 million

00:04:37.715 --> 00:04:38.714
that is excluded,

00:04:38.714 --> 00:04:42.203
this is for an individual
when they pass away.

00:04:42.203 --> 00:04:43.718
If it's being done as a couple,

00:04:43.718 --> 00:04:46.207
this exemption is actually 10 million.

00:04:46.207 --> 00:04:48.619
Between my wife and I,

00:04:48.619 --> 00:04:51.455
we have $1,005,000,000.

00:04:51.455 --> 00:04:54.951
Let's say I pass away and we
own everything collectively.

00:04:54.951 --> 00:04:58.383
She actually gets the
extra joint exemption

00:04:58.383 --> 00:04:59.319
passed on to her.

00:04:59.319 --> 00:05:01.455
Then if and when she passes away,

00:05:01.455 --> 00:05:05.049
this would be $10 million
that will be tax free.

00:05:05.049 --> 00:05:07.715
In this scenario, if this
is being done as a couple

00:05:07.715 --> 00:05:11.118
my daughter would get
the entire $6 million.

00:05:11.118 --> 00:05:13.847
The interesting thing about the estate tax

00:05:13.847 --> 00:05:14.984
is it's highly contested.

00:05:14.984 --> 00:05:17.052
People always debate, is
it wrong or is it right?

00:05:17.052 --> 00:05:18.792
I'll talk to you on that a little bit.

00:05:18.792 --> 00:05:21.413
I'll let you decide for yourself.

00:05:21.413 --> 00:05:23.642
But I'll give, at least, in what I hear

00:05:23.642 --> 00:05:27.180
is the main arguments for
or against the estate tax.

00:05:27.180 --> 00:05:30.584
Like most taxes, there's always someone

00:05:30.584 --> 00:05:33.316
who will believe that it is unfair.

00:05:33.316 --> 00:05:39.957
Let me write the for and against.

00:05:39.957 --> 00:05:42.066
For and against the estate tax.

00:05:42.066 --> 00:05:43.593
Some people say it's unfair,

00:05:43.593 --> 00:05:45.487
"Look. Over the course of my life

00:05:45.487 --> 00:05:46.864
"I earned all of these money.

00:05:46.864 --> 00:05:49.121
"I paid all of these income taxes

00:05:49.121 --> 00:05:50.200
"off of the money I earned

00:05:50.200 --> 00:05:53.731
"and now the stuff that I want
to leave behind to my children

00:05:53.731 --> 00:05:58.858
"I am not able to leave it all to them.

00:05:58.858 --> 00:06:02.395
"Because obviously $655
million is not enough.

00:06:02.395 --> 00:06:07.391
"They deserve the entire
$1,005,000,000 for being my child."

00:06:07.391 --> 00:06:12.061
So there's this argument that it is unfair

00:06:12.061 --> 00:06:13.922
or it's some double taxation.

00:06:13.922 --> 00:06:15.995
The money was taxed the
first time it was earned

00:06:15.995 --> 00:06:17.728
and now it's being taxed again

00:06:17.728 --> 00:06:19.256
once it's being inherited.

00:06:19.256 --> 00:06:20.941
The counter argument to that

00:06:20.941 --> 00:06:23.791
is double taxation is
everywhere in our society.

00:06:23.791 --> 00:06:24.946
Corporations pay taxes

00:06:24.946 --> 00:06:26.943
and then they give dividends

00:06:26.943 --> 00:06:29.795
and the stock holders pay taxes again

00:06:29.795 --> 00:06:32.395
and that's an exchange for
having the limited liability

00:06:32.395 --> 00:06:33.462
of the corporation.

00:06:33.462 --> 00:06:35.594
You pay taxes on your income

00:06:35.594 --> 00:06:37.458
and then with that after tax income

00:06:37.458 --> 00:06:39.125
you go buy something at the store,

00:06:39.125 --> 00:06:40.399
once again, you pay sales tax.

00:06:40.399 --> 00:06:43.728
Double taxation, it happens everywhere.

00:06:43.728 --> 00:06:47.051
The for argument and
somewhat the counter argument

00:06:47.051 --> 00:06:49.922
against the unfairness of it all is that,

00:06:49.922 --> 00:06:52.527
"Look. We're exempting,"
depending on how you view it,

00:06:52.527 --> 00:06:56.712
"the first $5 million or $10 million."

00:06:56.712 --> 00:07:01.465
$5 million to $10 million is exempt.

00:07:01.465 --> 00:07:04.534
The person who's for the
estate tax would say look,

00:07:04.534 --> 00:07:05.700
it's a little disingenuous

00:07:05.700 --> 00:07:07.871
when you make this
impression that your children

00:07:07.871 --> 00:07:09.209
are going to suffer.

00:07:09.209 --> 00:07:12.034
They're not going to be
able to get your house

00:07:12.034 --> 00:07:13.288
or they're not going to
be able to get your car.

00:07:13.288 --> 00:07:15.869
They're going to be
able to get all of that

00:07:15.869 --> 00:07:19.061
as long as it's worth
less than $10 million

00:07:19.061 --> 00:07:20.621
which is not a small amount of money.

00:07:20.621 --> 00:07:23.951
Even above that, they're going
to get 65% of everything.

00:07:23.951 --> 00:07:26.062
It's not like your children
are going to be left hungry

00:07:26.062 --> 00:07:27.666
because of the estate tax.

00:07:27.666 --> 00:07:29.395
It's actually a very
small number of people

00:07:29.395 --> 00:07:32.451
that the estate tax will
even hit, really, the rich

00:07:32.451 --> 00:07:34.001
because even the upper-middle class,

00:07:34.001 --> 00:07:38.623
very few of them will leave
more than $10 million behind.

00:07:38.623 --> 00:07:39.703
The other argument is,

00:07:39.703 --> 00:07:41.464
if you're going to tax anything.

00:07:41.464 --> 00:07:44.996
What to tax?

00:07:44.996 --> 00:07:46.284
Do you tax income?

00:07:46.284 --> 00:07:48.536
Obviously, you do have to
tax income to some degree

00:07:48.536 --> 00:07:50.394
to get enough revenue for
the federal government.

00:07:50.394 --> 00:07:54.122
Isn't it better to tax someone
who did not work for the money?

00:07:54.122 --> 00:07:56.036
Someone who's getting the money, I mean,

00:07:56.036 --> 00:07:58.201
maybe they already got every
other privilege in life.

00:07:58.201 --> 00:08:00.326
They went to the best
schools and all the rest

00:08:00.326 --> 00:08:01.927
and through connections, maybe, good jobs.

00:08:01.927 --> 00:08:03.465
Why not tax the person

00:08:03.465 --> 00:08:07.698
who is already lucky to
some degree by virtue of,

00:08:07.698 --> 00:08:10.116
and this is just the
argument someone would make.

00:08:10.116 --> 00:08:12.857
By the way, they're sill going
to get a lot of that money.

00:08:12.857 --> 00:08:14.322
It's not like they're
going to be left poor.

00:08:14.322 --> 00:08:15.618
They're still going to be fine.

00:08:15.618 --> 00:08:18.539
To some degree, maybe if
they have a little bit less

00:08:18.539 --> 00:08:21.125
it will be more of an
incentive for them to work.

00:08:21.125 --> 00:08:23.616
The other argument for the estate tax,

00:08:23.616 --> 00:08:27.058
and this is a broader,
almost a macro view of things

00:08:27.058 --> 00:08:29.655
of what might be good for society

00:08:29.655 --> 00:08:31.702
is if you don't have an estate tax

00:08:31.702 --> 00:08:34.287
and we know that there's this
huge fortunes in the world

00:08:34.287 --> 00:08:37.655
where someone creates
a big business empire

00:08:37.655 --> 00:08:39.727
and they have billions
upon billions of dollars.

00:08:39.727 --> 00:08:44.675
If someone has $10 billion,

00:08:44.675 --> 00:08:47.925
and let's say they don't
have that many children

00:08:47.925 --> 00:08:49.053
that they leave it behind to.

00:08:49.053 --> 00:08:50.591
Maybe they only have one child

00:08:50.591 --> 00:08:54.027
and they leave that $10
billion to that one child.

00:08:54.027 --> 00:08:56.658
Then that one child can
literally just let that income

00:08:56.658 --> 00:08:58.061
passively earn interest.

00:08:58.061 --> 00:08:59.875
They'll never have to work
the rest of their life

00:08:59.875 --> 00:09:03.876
and through the passive
earnings of just the assets

00:09:03.876 --> 00:09:04.790
being invested,

00:09:04.790 --> 00:09:06.545
over the course of that child's life

00:09:06.545 --> 00:09:10.938
might grow to $30 billion.

00:09:10.938 --> 00:09:13.289
It will definitely grow faster
than the economy itself.

00:09:13.289 --> 00:09:15.258
Then that child, if
they have no estate tax,

00:09:15.258 --> 00:09:17.994
they'll pass the $30
billion to their children

00:09:17.994 --> 00:09:19.396
and then that will grow.

00:09:19.396 --> 00:09:22.213
What you would have happening
generation after generation

00:09:22.213 --> 00:09:27.057
is this family, if you
say the person who sets up

00:09:27.057 --> 00:09:28.723
the empire.

00:09:28.723 --> 00:09:31.058
Let's say this is the
entire country's GDP.

00:09:31.058 --> 00:09:34.965
Right where the empire sets
up in this person's lifespan,

00:09:34.965 --> 00:09:37.132
this is their proportion of the GDP

00:09:37.132 --> 00:09:38.729
and this is just for simplicity.

00:09:38.729 --> 00:09:42.049
If you don't tax it and just
passively over the course

00:09:42.049 --> 00:09:42.875
of the next lifespan,

00:09:42.875 --> 00:09:48.328
if there aren't enough offspring
to split up this fortune,

00:09:48.328 --> 00:09:52.385
as the GDP grows these
people's investments

00:09:52.385 --> 00:09:55.049
will grow even faster passively.

00:09:55.049 --> 00:09:59.659
Overtime, this family will
grow to own more and more

00:09:59.659 --> 00:10:01.458
of the nation's wealth

00:10:01.458 --> 00:10:03.327
without really having to do anything.

00:10:03.327 --> 00:10:06.214
It almost creates this nobility class

00:10:06.214 --> 00:10:07.874
and obviously that's what,

00:10:07.874 --> 00:10:09.391
at least many people in the United States

00:10:09.391 --> 00:10:11.991
view as what's different about America

00:10:11.991 --> 00:10:15.214
relative to old Europe,
to what used to happen

00:10:15.214 --> 00:10:17.727
in terms of the French revolution,

00:10:17.727 --> 00:10:20.724
and people just inheriting land
generation after generation

00:10:20.724 --> 00:10:22.875
and never having to work.

00:10:22.875 --> 00:10:25.623
This right here is a quote
from Winston Churchill

00:10:25.623 --> 00:10:28.522
on his view of an inheritance tax.

00:10:28.522 --> 00:10:30.374
He viewed it as a certain corrective

00:10:30.374 --> 00:10:35.547
against the development of
a race of the idle rich.

00:10:35.547 --> 00:10:37.327
Anyway, that's the explanation of it.

00:10:37.327 --> 00:10:39.625
You can stand for either side of it

00:10:39.625 --> 00:10:42.133
but hopefully this at
least gives you the tools

00:10:42.133 --> 00:10:46.133
to think about whether
you're for or against it.


Contango from trader perspective

WEBVTT
Kind: captions
Language: en

00:00:00.137 --> 00:00:02.633
Male voiceover: If a commodities
trader would tell you

00:00:02.633 --> 00:00:05.119
that a market is in Contango,

00:00:05.119 --> 00:00:07.666
they're just referring to the idea

00:00:07.666 --> 00:00:09.473
that it is cheaper today.

00:00:09.473 --> 00:00:11.137
So if we're talking about now,

00:00:11.137 --> 00:00:14.196
it's cheaper to buy that
commodity on the Spot Market.

00:00:14.196 --> 00:00:17.002
It's cheaper to buy it on the Spot Market

00:00:17.002 --> 00:00:21.054
than it is to agree to buy
it at some futures date

00:00:21.054 --> 00:00:24.913
or some future date using a
Futures or Forward Contract.

00:00:24.913 --> 00:00:29.471
In the future, it is more expensive.

00:00:29.471 --> 00:00:32.330
It is more expensive.

00:00:32.330 --> 00:00:34.303
Let's say that that commodity is gold

00:00:34.303 --> 00:00:36.938
and I'll just make up gold prices
for the sake of simplicity.

00:00:36.938 --> 00:00:38.967
This isn't the current gold prices.

00:00:38.967 --> 00:00:42.802
Let's say that today, you
can go on the Spot Market

00:00:42.802 --> 00:00:50.690
and buy gold at $1,500 per ounce

00:00:50.690 --> 00:00:52.553
but if you wanted to buy gold,

00:00:52.553 --> 00:00:53.889
if you don't want the gold today

00:00:53.889 --> 00:00:55.403
and you wanna enter a Futures Contract

00:00:55.403 --> 00:00:57.068
to buy the gold, one year from now.

00:00:57.068 --> 00:01:03.347
Let's say the future is now one
year later, one year from now.

00:01:03.347 --> 00:01:05.715
Instead of buying, let me write this down.

00:01:05.715 --> 00:01:06.806
This is the Spot Market.

00:01:06.806 --> 00:01:09.433
Instead of buying in the Spot
Market for $1,500 an ounce,

00:01:09.433 --> 00:01:12.506
you could agree to buy it one year later,

00:01:12.522 --> 00:01:17.744
one year from now for $1,600 an ounce

00:01:17.744 --> 00:01:22.292
and so to a trader, this
would be a market in Contango.

00:01:22.292 --> 00:01:24.349
What I wanna point out is that this isn't

00:01:24.349 --> 00:01:26.407
that strange of a thing

00:01:26.407 --> 00:01:27.555
because if you think about it,

00:01:27.555 --> 00:01:28.668
you have two options.

00:01:28.668 --> 00:01:31.334
If you wanna invest in
gold and gold is something

00:01:31.334 --> 00:01:33.006
that you wanna invest for the long term.

00:01:33.006 --> 00:01:33.920
You're not gonna eat the gold.

00:01:33.920 --> 00:01:37.113
You're not going to use it to fuel
your cars or anything like that.

00:01:37.113 --> 00:01:40.809
In the situation with gold,
let's say you wanna keep gold

00:01:40.809 --> 00:01:43.554
for definitely a year but
maybe many, many, many years.

00:01:43.554 --> 00:01:45.966
You have two ways of
making that investment.

00:01:45.966 --> 00:01:49.406
You could take your $1,500
and buy the gold today

00:01:49.406 --> 00:01:52.328
but if you take your $1,500
and buy the gold today,

00:01:52.328 --> 00:01:56.557
you would lose the returns
on that $1,500 on that cash

00:01:56.557 --> 00:01:58.591
that you could invest other places.

00:01:58.591 --> 00:02:03.284
You have the opportunity cost of the cash.

00:02:03.284 --> 00:02:05.639
So had you invested that
cash some place else?

00:02:05.639 --> 00:02:08.046
And you also have to store that gold.

00:02:08.046 --> 00:02:09.738
In the case of gold storage,

00:02:09.738 --> 00:02:11.604
you have to find some place really secure

00:02:11.604 --> 00:02:13.007
and maybe you need to insure the gold.

00:02:13.007 --> 00:02:15.870
You need it so that people
can't steal it and all the rest.

00:02:15.870 --> 00:02:19.470
You also have the storage cost.

00:02:19.470 --> 00:02:23.415
In general, you could
save both of these costs,

00:02:23.415 --> 00:02:26.527
if you enter into the Futures Contract.

00:02:26.527 --> 00:02:29.566
Instead of just buying $1,500
of the Spot Market today,

00:02:29.566 --> 00:02:31.935
you could enter into this contract

00:02:31.935 --> 00:02:34.931
where you can definitely
buy the gold one year later

00:02:34.931 --> 00:02:41.378
for $1,600 an ounce and then
you could take your $1,500,

00:02:41.378 --> 00:02:45.409
and get interest on it, so that will grow

00:02:45.409 --> 00:02:49.003
and you'll also save
money on the storage cost.

00:02:49.003 --> 00:02:53.272
In either way, especially for
commodities like gold, precious metals,

00:02:53.272 --> 00:02:54.806
things that aren't consumable,

00:02:54.806 --> 00:02:58.361
things that people don't need
immediately for consumption,

00:02:58.361 --> 00:03:02.597
it's not unusual for a
market to be in Contango.

00:03:02.597 --> 00:03:06.155
Sometimes you might see a severe Contango

00:03:06.155 --> 00:03:08.129
maybe with something that is consumable.

00:03:08.129 --> 00:03:14.069
So maybe right now, oil is
trading at $50 a barrel.

00:03:14.069 --> 00:03:15.669
Once again, I'm just making up the numbers

00:03:15.669 --> 00:03:21.079
and in the future, the
Futures price is at $150.

00:03:21.079 --> 00:03:23.807
This is probably taking more into account

00:03:23.807 --> 00:03:27.294
than just the storage cost and
the opportunity cost of your cash

00:03:27.294 --> 00:03:31.706
and this might be
because there's a surplus

00:03:31.706 --> 00:03:33.269
for all oil consumption today.

00:03:33.269 --> 00:03:34.935
There's just a big glut in the market

00:03:34.935 --> 00:03:36.334
and people are just trying to dump it

00:03:36.334 --> 00:03:40.956
or there might be some type of
perceived shortage in the future.

00:03:40.956 --> 00:03:42.444
So, you could think about it either way

00:03:42.444 --> 00:03:44.385
but this is very unusual.

00:03:44.385 --> 00:03:50.798
This type of severe Contango
is very, very unusual.

00:03:50.798 --> 00:03:54.004
You would expect to
see kind of minor ones.

00:03:54.004 --> 00:03:56.052
Things that take cost into consideration

00:03:56.052 --> 00:03:57.291
but not something like this.

00:03:57.291 --> 00:03:59.801
In something like this, you
can usually arbitrage it out

00:03:59.801 --> 00:04:01.980
and make some money
assuming you can store oil

00:04:01.980 --> 23:59:59.999
or you have oil to sell or
buy and all the rest of that.


Severe contango generally bearish

WEBVTT
Kind: captions
Language: en

00:00:00.542 --> 00:00:03.004
Voiceover: Now that we
know what a trader means

00:00:03.004 --> 00:00:05.070
when they say that a
market is in contango.

00:00:05.070 --> 00:00:07.163
Let's think about whether
it would be a bullish

00:00:07.163 --> 00:00:12.082
or a bearish signal for
prices in that commodity.

00:00:12.082 --> 00:00:14.744
So, as I mentioned in the last video,

00:00:14.744 --> 00:00:17.753
it's actually normal for
things to have a contango

00:00:17.753 --> 00:00:20.502
because it takes into
account the opportunity cost

00:00:20.502 --> 00:00:24.004
of the cash and the storage
cost for that commodity.

00:00:24.004 --> 00:00:27.835
So, if something is kind of
in a, in a reasonable contango

00:00:27.835 --> 00:00:30.671
you really can't make a call
on it one way or the other

00:00:30.671 --> 00:00:32.498
whether it's bullish or bearish.

00:00:32.498 --> 00:00:35.208
It's really just something
that you would expect.

00:00:35.208 --> 00:00:39.338
What's not as usual is a severe contango.

00:00:39.338 --> 00:00:40.801
Severe contango.

00:00:40.801 --> 00:00:45.416
And that's when the current
spot price is a lot lower

00:00:45.416 --> 00:00:48.447
than the future's price
or the forward price.

00:00:48.447 --> 00:00:51.070
And in that situation as we've
mentioned in the last video

00:00:51.070 --> 00:00:54.584
it's because that there's
perceived to be a big glut

00:00:54.584 --> 00:00:55.607
in the market.

00:00:55.607 --> 00:00:57.666
There's a surplus on the spot market

00:00:57.666 --> 00:01:02.200
or maybe there's a perceived
shortage at some point in the future.

00:01:02.200 --> 00:01:05.402
And in general this is
perceived although once again,

00:01:05.402 --> 00:01:08.340
you can't just look at one simple
signal and be able to you know,

00:01:08.340 --> 00:01:10.414
bet your life savings on
the direction of the market.

00:01:10.414 --> 00:01:12.579
It's a very quick way to lose your money

00:01:12.579 --> 00:01:16.003
but the general view is,
is that a severe contango

00:01:16.003 --> 00:01:18.270
is a bearish signal.

00:01:18.270 --> 00:01:22.751
Is a bearish signal for the
future price of that commodity

00:01:22.751 --> 00:01:25.005
and the reason why it's
perceived to be bearish

00:01:25.005 --> 00:01:28.833
is because if you have
this huge discrepancy

00:01:28.833 --> 00:01:34.007
all someone has to do is
buy a bunch of oil today.

00:01:34.007 --> 00:01:35.746
We assume that these are oil prices.

00:01:35.746 --> 00:01:38.672
So, buy a bunch of oil today for cheap.

00:01:38.672 --> 00:01:42.466
Store it and once again, we're
assuming this is severe contango.

00:01:42.466 --> 00:01:45.542
So this, it won't cost a
$100 a barrel to store this,

00:01:45.542 --> 00:01:50.608
this oil for a year and then
we agree to sell it for $150.

00:01:50.608 --> 00:01:54.416
So, we agree, agree to sell it

00:01:54.416 --> 00:01:57.143
and assuming the storage
cost is less than $100

00:01:57.143 --> 00:01:59.940
we're going to guarantee some money.

00:01:59.940 --> 00:02:02.402
So, if you have a bunch
of people doing this,

00:02:02.402 --> 00:02:04.082
buying on the spot market

00:02:04.082 --> 00:02:06.603
it will increase demand
on the spot market,

00:02:06.603 --> 00:02:07.836
raise prices there

00:02:07.836 --> 00:02:09.586
but for the future's market,

00:02:09.586 --> 00:02:13.275
there's a bunch of people who are
now agreeing to sell in the future.

00:02:13.275 --> 00:02:15.004
So it's going to lower,

00:02:15.004 --> 00:02:19.207
it's going to increase the supply on the
selling side of the future's contract

00:02:19.207 --> 00:02:21.874
so to lower the future's prices.

00:02:21.874 --> 00:02:26.920
So, in general severe contango is
bearish for the future's price.


Appomattox Court House and Lincoln's Assassination

WEBVTT
Kind: captions
Language: en

00:00:00.650 --> 00:00:03.050
In the video where I give an
overview of American history

00:00:03.050 --> 00:00:06.260
through the Civil War, I
commented that it's unfortunate

00:00:06.260 --> 00:00:08.770
that Abraham Lincoln
is assassinated shortly

00:00:08.770 --> 00:00:11.302
before the end of the Civil War.

00:00:11.302 --> 00:00:13.760
And although that is technically
correct, what I want to do

00:00:13.760 --> 00:00:16.570
is clarify that comment a
little bit in this video.

00:00:16.570 --> 00:00:20.000
Because in actuality by the
time he was assassinated,

00:00:20.000 --> 00:00:24.060
Lincoln knew that the Union
was very, very, very likely

00:00:24.060 --> 00:00:29.100
to win the war, that the major
Confederate armies had already

00:00:29.100 --> 00:00:31.000
surrendered to the Union.

00:00:31.000 --> 00:00:32.509
Although it wasn't
formally done,

00:00:32.509 --> 00:00:34.140
there was still
some fighting going

00:00:34.140 --> 00:00:36.050
on in some parts of the South.

00:00:36.050 --> 00:00:40.060
So if we go back
to April 9, 1865

00:00:40.060 --> 00:00:42.480
you have the battle at
Appomattox Courthouse,

00:00:42.480 --> 00:00:45.510
and after that battle
the Confederate army

00:00:45.510 --> 00:00:46.430
is essentially routed.

00:00:46.430 --> 00:00:47.670
It has to surrender.

00:00:47.670 --> 00:00:49.640
This right here
is Robert E. Lee.

00:00:53.320 --> 00:00:57.050
And on April 9, 1865
after that battle,

00:00:57.050 --> 00:00:59.500
he surrenders to
Ulysses S. Grant.

00:01:02.300 --> 00:01:05.310
And one point of confusion
some people often have, and I

00:01:05.310 --> 00:01:07.280
had this the first
time I learned it,

00:01:07.280 --> 00:01:10.420
is that Appomattox Courthouse
is the name of the city,

00:01:10.420 --> 00:01:12.640
that the surrender
actually did not take place

00:01:12.640 --> 00:01:13.932
in the courthouse in that city.

00:01:13.932 --> 00:01:15.806
And I actually shouldn't
even call it a city.

00:01:15.806 --> 00:01:18.100
It's like a little town
with a handful of buildings.

00:01:18.100 --> 00:01:20.510
It took place in this
gentleman's house,

00:01:20.510 --> 00:01:22.360
Wilmer McLean.

00:01:22.360 --> 00:01:24.840
And I'm showing
his image because,

00:01:24.840 --> 00:01:28.890
his set of circumstances or how
he is tied to the Civil War,

00:01:28.890 --> 00:01:30.710
is frankly fascinating.

00:01:30.710 --> 00:01:34.640
Because in 1861 the first
battle of the Civil War

00:01:34.640 --> 00:01:37.650
occurred on his property
in Manassas, Virginia.

00:01:37.650 --> 00:01:39.740
This is in northern Virginia.

00:01:39.740 --> 00:01:43.970
He was sympathetic with
the Confederate army.

00:01:43.970 --> 00:01:45.810
He did not like that
northern Virginia was

00:01:45.810 --> 00:01:50.140
so close to the
North-South border.

00:01:50.140 --> 00:01:52.290
So he picks up his
bags and his family,

00:01:52.290 --> 00:01:54.800
and he moves them
down to the small town

00:01:54.800 --> 00:01:58.610
of Appomattox Courthouse,
which is in central Virginia.

00:01:58.610 --> 00:02:02.880
So the very first major
land battle of the Civil War

00:02:02.880 --> 00:02:05.590
literally occurs on
this guy's property.

00:02:05.590 --> 00:02:10.419
And the last major or
really the major surrender

00:02:10.419 --> 00:02:13.680
of the Civil War occurs
inside this guy's house

00:02:13.680 --> 00:02:14.329
after he moves.

00:02:14.329 --> 00:02:15.370
And it's all coincidence.

00:02:15.370 --> 00:02:17.740
He just happens to
have the nicest house

00:02:17.740 --> 00:02:19.410
near the battlefield
where everyone

00:02:19.410 --> 00:02:22.990
felt that it was appropriate
to have this kind of major end

00:02:22.990 --> 00:02:24.980
to a major war.

00:02:24.980 --> 00:02:28.480
But regardless, that
happens on April 9, 1865.

00:02:28.480 --> 00:02:33.070
The major Confederate army
surrenders to the Union army.

00:02:33.070 --> 00:02:36.590
The reason why this is not the
formal end of the Civil War

00:02:36.590 --> 00:02:41.880
is that you still had 175,000
Confederate troops other places

00:02:41.880 --> 00:02:43.992
in the south
continuing to fight on.

00:02:43.992 --> 00:02:45.450
You have to remember
that we didn't

00:02:45.450 --> 00:02:47.450
have a telephone at
this point in time,

00:02:47.450 --> 00:02:49.860
so we didn't have
instant communication.

00:02:49.860 --> 00:02:52.390
So these people who were
fighting, many of them

00:02:52.390 --> 00:02:56.770
did not even know that the
Confederate army had already

00:02:56.770 --> 00:02:58.770
surrendered to the Union.

00:02:58.770 --> 00:03:01.170
But to some degree
this major surrender

00:03:01.170 --> 00:03:04.500
is what leads to
Lincoln's assassination.

00:03:04.500 --> 00:03:08.730
Because for most
people this tells you,

00:03:08.730 --> 00:03:12.430
hey, there's a 99.9% chance
that the Union has won.

00:03:12.430 --> 00:03:13.989
It just has to,
either these people

00:03:13.989 --> 00:03:16.280
need to find out that their
major army has surrendered,

00:03:16.280 --> 00:03:20.740
or the Union has to go
and essentially force

00:03:20.740 --> 00:03:22.700
all of the rest of the
armies to surrender.

00:03:22.700 --> 00:03:25.660
So you go to April 14, 1865.

00:03:25.660 --> 00:03:28.840
Lincoln already knows
that Robert E. Lee's army

00:03:28.840 --> 00:03:29.570
has surrendered.

00:03:29.570 --> 00:03:32.450
He knows that
victory is imminent.

00:03:32.450 --> 00:03:36.960
But you have this gentleman
right over here, John Wilkes

00:03:36.960 --> 00:03:46.580
Booth, who is sympathetic
to the Confederate cause.

00:03:46.580 --> 00:03:50.150
And in his mind all
is not lost yet.

00:03:50.150 --> 00:03:53.990
He does see this as a major
blow to the Confederate cause,

00:03:53.990 --> 00:03:56.650
and he thinks that they need
to do something desperate

00:03:56.650 --> 00:04:00.550
if they want to have any chance
of being able to come back,

00:04:00.550 --> 00:04:04.060
being able to maintain their
independence from the Union.

00:04:04.060 --> 00:04:07.150
So he coordinates with
a couple of his buddies.

00:04:07.150 --> 00:04:09.160
And he says, hey
our only chance is

00:04:09.160 --> 00:04:13.130
if we assassinate not only
Abraham Lincoln, but also

00:04:13.130 --> 00:04:18.959
Andrew Johnson who's the vice
president, and Ulysses S Grant,

00:04:18.959 --> 00:04:22.890
and we assassinate Seward, who
was the Secretary of State.

00:04:22.890 --> 00:04:25.490
And the idea there is if
you assassinate everyone

00:04:25.490 --> 00:04:27.680
who is in line to
become president,

00:04:27.680 --> 00:04:30.300
then it would just throw
the entire Union leadership

00:04:30.300 --> 00:04:33.770
in disarray, and maybe it would
give these characters over here

00:04:33.770 --> 00:04:36.170
a fighting chance to
maintain their independence

00:04:36.170 --> 00:04:38.730
or maybe come back
against the Union Army.

00:04:38.730 --> 00:04:40.540
Unfortunately for
John Wilkes Booth,

00:04:40.540 --> 00:04:44.250
or I guess well you
could take it either way,

00:04:44.250 --> 00:04:47.710
the other three people were
not able to fully execute

00:04:47.710 --> 00:04:48.940
on their plan.

00:04:48.940 --> 00:04:51.300
Seward was injured.

00:04:51.300 --> 00:04:53.540
He actually did get stabbed
in the face and all that,

00:04:53.540 --> 00:04:55.000
but he was not assassinated.

00:04:55.000 --> 00:04:57.080
And John Wilkes Booth
was the only person

00:04:57.080 --> 00:05:00.110
who was able to carry
out his assassination.

00:05:00.110 --> 00:05:05.450
So you have on April 14, 1865
shortly after 10:00 PM Abraham

00:05:05.450 --> 00:05:08.880
Lincoln is watching a
play at Ford's Theater.

00:05:08.880 --> 00:05:12.300
And his booth, the guy who was
supposed to guard the booth,

00:05:12.300 --> 00:05:14.120
was out drinking
with his buddies.

00:05:14.120 --> 00:05:18.600
So I guess the Secret
Service really, the security

00:05:18.600 --> 00:05:21.990
was not back then what it is
now, hopefully what it is now.

00:05:21.990 --> 00:05:24.000
And John Wilkes
Booth, who actually

00:05:24.000 --> 00:05:27.110
used to act at this theater,
he picked a time in the play

00:05:27.110 --> 00:05:28.860
where everyone would
laugh and clap.

00:05:28.860 --> 00:05:30.930
And he said, hey, I'll
just shoot right then.

00:05:30.930 --> 00:05:32.710
People will think it's part
of the play or something,

00:05:32.710 --> 00:05:34.418
or they wouldn't notice
as much, and then

00:05:34.418 --> 00:05:35.590
I'll be able to run out.

00:05:35.590 --> 00:05:39.430
And so he is able to, right in
that moment shortly after 10:00

00:05:39.430 --> 00:05:43.090
PM, shoot Abraham Lincoln
and assassinate him

00:05:43.090 --> 00:05:44.950
on April 14, 1865.

00:05:44.950 --> 00:05:47.040
But the whole point here
is to just understand

00:05:47.040 --> 00:05:53.530
that Lincoln did know that
Robert E. Lee's army had

00:05:53.530 --> 00:05:56.560
surrendered at the time
of his assassination.

00:05:56.560 --> 00:05:57.960
So he at least
was feeling pretty

00:05:57.960 --> 00:06:00.640
good about the
course of the war.


Backwardation bullish or bearish

WEBVTT
Kind: captions
Language: en

00:00:00.500 --> 00:00:02.350
If a commodities
trader tells you

00:00:02.350 --> 00:00:05.180
that a market is
in backwardation,

00:00:05.180 --> 00:00:07.380
they're essentially
saying that it

00:00:07.380 --> 00:00:10.760
costs more to buy
whatever commodity they're

00:00:10.760 --> 00:00:16.980
talking about now than
it would to buy it later,

00:00:16.980 --> 00:00:20.600
to go into a futures
contract to buy whatever

00:00:20.600 --> 00:00:22.520
that commodity might
be-- silver, gold,

00:00:22.520 --> 00:00:24.570
or oil-- to buy it later.

00:00:24.570 --> 00:00:26.440
So later is cheaper.

00:00:29.720 --> 00:00:32.540
So, the question you might
ask yourself, or really,

00:00:32.540 --> 00:00:35.450
any trader might ask
themselves, is this bullish

00:00:35.450 --> 00:00:37.670
or is this a bearish?

00:00:37.670 --> 00:00:41.250
Is this a bullish situation?

00:00:41.250 --> 00:00:44.840
And there's no obvious
rule of thumb here.

00:00:44.840 --> 00:00:47.580
But if someone says,
look, to get something now

00:00:47.580 --> 00:00:49.840
costs more than to
get it later, what

00:00:49.840 --> 00:00:52.830
does that tell you about
what's happening in the market?

00:00:52.830 --> 00:00:56.500
Well, it tells you that
people are desperate.

00:00:56.500 --> 00:00:58.340
Because if they
weren't desperate,

00:00:58.340 --> 00:01:00.630
the rational thing to
do would just be wait.

00:01:00.630 --> 00:01:02.850
Wait a little while and
get it cheaper for later.

00:01:02.850 --> 00:01:05.250
Or, if you don't need
that oil right now,

00:01:05.250 --> 00:01:07.550
if you don't need
that corn right now,

00:01:07.550 --> 00:01:09.340
or if you don't need
that gold right now,

00:01:09.340 --> 00:01:11.350
instead of paying
more for it right now,

00:01:11.350 --> 00:01:14.450
just say, look, I could
enter into a futures

00:01:14.450 --> 00:01:18.290
contract for delivery of
that gold or oil or corn

00:01:18.290 --> 00:01:21.400
or whatever it is at a later
date for a cheaper price.

00:01:21.400 --> 00:01:24.420
And I wouldn't even have to
store it between now and then.

00:01:24.420 --> 00:01:27.890
So, if some people were rational
and if they weren't desperate,

00:01:27.890 --> 00:01:29.050
this wouldn't happen.

00:01:29.050 --> 00:01:30.710
But because they're
willing to do this,

00:01:30.710 --> 00:01:34.120
they're willing to pay more
now than for a future delivery

00:01:34.120 --> 00:01:40.780
date, it shows you that there
might be some type of shortage.

00:01:40.780 --> 00:01:43.595
In the case of oil,
maybe the oil supply

00:01:43.595 --> 00:01:44.960
has been disrupted somehow.

00:01:44.960 --> 00:01:47.010
In the case of corn,
for whatever reason,

00:01:47.010 --> 00:01:48.760
some crops have been
destroyed, and people

00:01:48.760 --> 00:01:50.440
need to eat, and
all of the rest.

00:01:50.440 --> 00:01:54.000
For commodities that
aren't used, so to speak,

00:01:54.000 --> 00:01:57.760
like gold, if you see
backwardation there,

00:01:57.760 --> 00:02:00.730
I wouldn't say-- I mean, it's
definitely still desperation,

00:02:00.730 --> 00:02:02.960
but it's not out of a core need.

00:02:02.960 --> 00:02:04.810
If gold goes in
the backwardation,

00:02:04.810 --> 00:02:07.520
it's more because of some
type of irrational desire

00:02:07.520 --> 00:02:09.830
to have their hands
on the gold now

00:02:09.830 --> 00:02:12.130
than have their hands
on the gold later.

00:02:12.130 --> 00:02:14.640
Maybe they think society
is going to collapse,

00:02:14.640 --> 00:02:17.550
and the future
delivery dates of gold

00:02:17.550 --> 00:02:19.240
aren't going to
actually hold up.

00:02:19.240 --> 00:02:21.050
Who knows what they are?

00:02:21.050 --> 00:02:24.100
So in general, when people talk
about backwardation, because

00:02:24.100 --> 00:02:26.210
of this desperation
in the market,

00:02:26.210 --> 00:02:29.910
people tend to perceive
it as a bullish signal.

00:02:29.910 --> 00:02:32.000
Obviously if people
are desperate,

00:02:32.000 --> 00:02:34.230
there's demand for this thing.

00:02:34.230 --> 00:02:37.395
My argument is, you can't
just look at one tea leaf out

00:02:37.395 --> 00:02:39.270
of a bunch of tea leaves
and say whether it's

00:02:39.270 --> 00:02:39.990
bullish or bearish.

00:02:39.990 --> 00:02:41.656
But what you could
say is, look, there's

00:02:41.656 --> 00:02:44.360
something somewhat
abnormal going

00:02:44.360 --> 00:02:46.920
in the market due to
some type of desperation.

00:02:46.920 --> 00:02:49.870
It's a little less irrational
it it's due to a storage,

00:02:49.870 --> 00:02:52.280
but it could be very irrational
if it's a due to just

00:02:52.280 --> 00:02:53.820
wanting your hands on it.

00:02:53.820 --> 00:02:57.420
Because frankly, if you
wanted to buy gold just

00:02:57.420 --> 00:02:59.450
for the sake of
investing in gold--

00:02:59.450 --> 00:03:01.670
you're not going to eat it
or use it to fuel your car

00:03:01.670 --> 00:03:04.490
or anything like that-- it
would make complete sense,

00:03:04.490 --> 00:03:06.420
or even better, if
you already held gold

00:03:06.420 --> 00:03:10.040
in this type of a market that's
undergoing backwardation.

00:03:10.040 --> 00:03:11.480
The rational thing
to do would be

00:03:11.480 --> 00:03:13.910
to sell your gold
now for more money,

00:03:13.910 --> 00:03:18.760
and then agree to buy it
back later for cheaper.

00:03:18.760 --> 00:03:21.490
And so once this later
date comes about,

00:03:21.490 --> 00:03:23.120
you'll still have
your gold, and you

00:03:23.120 --> 00:03:26.020
would have made some
risk free profits.


Khan Academy on California Report (June 2011)

WEBVTT
Kind: captions
Language: en

00:00:01.415 --> 00:00:02.790
SPEAKER 1: Well,
the biggest buzz

00:00:02.790 --> 00:00:06.550
in education circles these days
is coming not from an educator,

00:00:06.550 --> 00:00:10.190
but a one-time hedge fund
manager in Silicon Valley.

00:00:10.190 --> 00:00:12.830
The former Ivy League whiz
kid has revolutionized

00:00:12.830 --> 00:00:15.930
math instruction with a
series of online lessons

00:00:15.930 --> 00:00:18.160
that have gone viral on YouTube.

00:00:18.160 --> 00:00:20.980
Now as Elaine Korry
reports, his Khan Academy

00:00:20.980 --> 00:00:23.480
is rocking California
classrooms.

00:00:23.480 --> 00:00:25.700
ELAINE KORRY: It all
started a few years ago

00:00:25.700 --> 00:00:29.150
when Sal Khan watched his
young cousin, Nadia, struggling

00:00:29.150 --> 00:00:30.620
with her math homework.

00:00:30.620 --> 00:00:32.770
He saw first hand
what he says is

00:00:32.770 --> 00:00:36.850
wrong with math instruction
in America, a rigid model that

00:00:36.850 --> 00:00:39.290
forces all students to
learn at the same pace.

00:00:39.290 --> 00:00:40.790
SALMAN KHAN:
Obviously, the best way

00:00:40.790 --> 00:00:43.180
to tutor them is
not to tell Nadia,

00:00:43.180 --> 00:00:45.580
I'm going to teach you
exponents for 10 minutes,

00:00:45.580 --> 00:00:47.610
even if you only understand
exponents halfway,

00:00:47.610 --> 00:00:50.690
I'm going to move on to negative
exponents in the next 10

00:00:50.690 --> 00:00:51.190
minutes.

00:00:51.190 --> 00:00:53.640
ELAINE KORRY: Khan turned
that model on its head,

00:00:53.640 --> 00:00:56.460
letting Nadia set her
own pace for learning.

00:00:56.460 --> 00:01:00.080
He began posting little 10
minute math lessons online,

00:01:00.080 --> 00:01:01.900
and the rest is history.

00:01:01.900 --> 00:01:07.270
Today with 2,100 free tutorials,
the nonprofit Khan Academy

00:01:07.270 --> 00:01:11.140
has the most popular education
website in the world.

00:01:11.140 --> 00:01:13.630
And a pilot program
begun last fall

00:01:13.630 --> 00:01:16.250
in Los Altos public
schools, is proof

00:01:16.250 --> 00:01:20.239
that self-paced math instruction
can also work in the classroom.

00:01:20.239 --> 00:01:22.030
CAMI THORDERSON: Good
morning, fifth grade.

00:01:22.030 --> 00:01:23.780
Great to see you this morning.

00:01:23.780 --> 00:01:25.390
I would remind you
that today we're

00:01:25.390 --> 00:01:27.940
working on those fifth
grade goals in our classroom

00:01:27.940 --> 00:01:28.900
on Khan Academy.

00:01:28.900 --> 00:01:30.610
So let's get busy.

00:01:30.610 --> 00:01:33.890
ELAINE KORRY: These 30 students
in Cami Thorderson's class,

00:01:33.890 --> 00:01:37.060
are clustered in small
groups around laptops.

00:01:37.060 --> 00:01:40.200
Key to this experiment,
the kids work together

00:01:40.200 --> 00:01:42.980
helping each other to
solve math problems posted

00:01:42.980 --> 00:01:44.800
on the Khan Academy website.

00:01:44.800 --> 00:01:48.800
SPEAKER 2: So 2 is
x and 2 is also y.

00:01:48.800 --> 00:01:50.830
So parenthesis first.

00:01:50.830 --> 00:01:54.775
2 minus 1 equals 1.

00:01:54.775 --> 00:01:56.090
Yay.

00:01:56.090 --> 00:01:57.840
ELAINE KORRY: Andrew
and Ryan have already

00:01:57.840 --> 00:02:00.180
mastered the fifth
grade curriculum,

00:02:00.180 --> 00:02:02.430
so they've moved on to algebra.

00:02:02.430 --> 00:02:05.480
After finishing some of
Khan's online modules,

00:02:05.480 --> 00:02:09.310
they test their understanding
in a series of exercises.

00:02:09.310 --> 00:02:11.310
SPEAKER 2: So you have
1 minus positive 3--

00:02:11.310 --> 00:02:13.530
SPEAKER 3: Minus
3 is negative 2.

00:02:13.530 --> 00:02:14.322
Negative 2 times 6.

00:02:14.322 --> 00:02:15.238
SPEAKER 2: No, no, no.

00:02:15.238 --> 00:02:16.530
Remember order of operations.

00:02:16.530 --> 00:02:17.480
SPEAKER 3: Yeah, yeah, yeah.

00:02:17.480 --> 00:02:18.855
ELAINE KORRY: Each
correct answer

00:02:18.855 --> 00:02:20.710
earns them energy points.

00:02:20.710 --> 00:02:22.650
Students compete
against each other

00:02:22.650 --> 00:02:26.630
for the most points, which they
can redeem for cool badges.

00:02:26.630 --> 00:02:28.670
SPEAKER 2: So like, moon
badges aren't too hard,

00:02:28.670 --> 00:02:29.545
because I have a lot.

00:02:29.545 --> 00:02:31.470
I have 227.

00:02:31.470 --> 00:02:35.080
But it gets hard about
here, at the Earth badges.

00:02:35.080 --> 00:02:36.910
ELAINE KORRY: While
the students are busy,

00:02:36.910 --> 00:02:39.150
teacher Thorderson
wanders among them

00:02:39.150 --> 00:02:41.890
with an electronic
tablet in hand.

00:02:41.890 --> 00:02:45.210
It displays a customized
Khan Academy graph

00:02:45.210 --> 00:02:48.960
showing in real time what
each child is working on.

00:02:48.960 --> 00:02:51.620
Thorderson can zoom
in on any student

00:02:51.620 --> 00:02:53.842
for a color coded
display of their work.

00:02:53.842 --> 00:02:56.300
CAMI THORDERSON: The blues are
the problems he got correct.

00:02:56.300 --> 00:02:58.140
The reds are the
problems he missed.

00:02:58.140 --> 00:02:59.530
And I can actually
then go to him

00:02:59.530 --> 00:03:01.350
and say, let's look at this
problem that you missed.

00:03:01.350 --> 00:03:02.980
Let's work through
this a little bit.

00:03:02.980 --> 00:03:05.840
ELAINE KORRY: After six months
with the Khan Academy program,

00:03:05.840 --> 00:03:09.620
Thorderson is spending less
time grading tests or preparing

00:03:09.620 --> 00:03:13.450
lectures, and more time
actually teaching one-on-one.

00:03:13.450 --> 00:03:15.089
She's sold on the program.

00:03:15.089 --> 00:03:17.130
CAMI THORDERSON: It's just
brought our math class

00:03:17.130 --> 00:03:18.880
to a whole other level.

00:03:18.880 --> 00:03:22.300
And you can hear the
excitement in the collaboration

00:03:22.300 --> 00:03:23.950
that happens in this classroom.

00:03:23.950 --> 00:03:26.260
They're talking to
each other about math.

00:03:26.260 --> 00:03:28.620
They're just excited.

00:03:28.620 --> 00:03:31.330
ELAINE KORRY: Some fifth
graders have surged ahead

00:03:31.330 --> 00:03:34.800
and Khan Academy has helped
slower kids catch up.

00:03:34.800 --> 00:03:37.030
The pilot program
in seventh grade

00:03:37.030 --> 00:03:40.630
targeted Los Altos students
who had fallen several grade

00:03:40.630 --> 00:03:42.340
levels behind.

00:03:42.340 --> 00:03:45.120
Nearly all of them have
made good progress.

00:03:45.120 --> 00:03:48.030
Parents also seem to
support the Khan Academy

00:03:48.030 --> 00:03:51.930
and the students say they prefer
it to their old math class.

00:03:51.930 --> 00:03:54.620
SPEAKER 2: It's not as boring
as writing in a textbook.

00:03:54.620 --> 00:03:56.370
SPEAKER 3: Yeah, there's
different modules

00:03:56.370 --> 00:03:58.060
so you can do whatever you want.

00:03:58.060 --> 00:04:02.970
SPEAKER 4: And if we were doing
math in the textbook right now,

00:04:02.970 --> 00:04:05.761
we wouldn't be
doing trigonometry.

00:04:05.761 --> 00:04:07.260
ELAINE KORRY: The
Los Altos District

00:04:07.260 --> 00:04:09.165
is working with
Khan to include up

00:04:09.165 --> 00:04:12.530
to 1,000 students in
the program next fall.

00:04:12.530 --> 00:04:16.829
Meanwhile, he's been scooping up
accolades, awards, and millions

00:04:16.829 --> 00:04:20.250
of dollars in funding from the
Gates Foundation and Silicon

00:04:20.250 --> 00:04:21.839
Valley backers.

00:04:21.839 --> 00:04:24.530
Khan's been criticized
as a dilettante,

00:04:24.530 --> 00:04:28.510
and dismissed as just another
quick fix for education,

00:04:28.510 --> 00:04:29.790
but he doesn't care.

00:04:29.790 --> 00:04:31.456
SALMAN KHAN: The
students, the teachers,

00:04:31.456 --> 00:04:33.270
everyone is way more
engaged, and there's

00:04:33.270 --> 00:04:35.062
reason to believe that
many of the students

00:04:35.062 --> 00:04:36.936
are learning well ahead
of their grade level.

00:04:36.936 --> 00:04:39.650
And I'm not talking about 10%
ahead, I'm talking about three,

00:04:39.650 --> 00:04:40.717
four grade levels ahead.

00:04:40.717 --> 00:04:42.300
ELAINE KORRY: By
September, Khan hopes

00:04:42.300 --> 00:04:45.340
to have pilot programs in
a dozen school districts,

00:04:45.340 --> 00:04:47.240
mostly in California.

00:04:47.240 --> 00:04:50.820
For the California
report, I'm Elaine Korry.