chemgal sends this in: “This is more of a “child I don’t understand.” If you’re not familiar with the authors, a quick search will turn up the books being referenced, but even if Caulfield is supposed to be exceptional, he’s what, grade 4? This stretches my suspension of disbelief.”
Boise Ed also sent this one in: “The first two panels are good. It’s the third one that puzzles me. My friend Mr. Google tells me Adam Grant is an organizational psychologist and bestselling author who studies how people find motivation and meaning, and Daniel Kahneman was an Israeli-American psychologist best-known for his work on the psychology of judgment and decision-making as well as behavioral economics. I can only guess that the book-report assignment was on a title of the student’s choosing, and Caulfield may have chosen a book by one of those psychologists. Maybe he wrote something frivolous and is counting on Mrs. Olsen liking the origami too much to unfold it.”
Comics I Don't Understand 
Caulfield’s logic is flawed, as the frog can be refolded after reading the report.
Caulfield has always been eerily precocious. Like it or not, it’s one of the premises of the strip.
IIRC, Kahneman with his partner Tversky more or less launched the psych side of what came to be called “behavioral economics” — the branch which has been collecting so many of the Nobel-memorial econ prizes.
Effectively what Boise Ed said.
The joke would seem to be Caulfield read one of those two books and learned something about psychology… presumably something along the lines that people won’t destroy something they like and he is “betting” (counting) on that.
Yes, it can be refolded, but that would take effort and time and might not come back the same. I’m not sure it matters, either. By giving that choice and betting she won’t destroy something she likes he has demonstrated an understanding of the material. Call it a performance book report.
I’ve read some of Kahneman’s books and scientific papers, going back to his work with Amos Tversky in the 1970s on the biases in the assessment of risk/probabilities. In fact, I met Tversky when he gave a guest seminar at Michigan. (He would almost certainly have shared the Nobel Prize with Kahneman, but he had died by then. Kahneman has commented that he feels “it is a joint prize. We were twinned for more than a decade.”) But I don’t remember any frogs.
That work, on the assessment of risk, continues a long theme in math/statistics. Developments in probability theory were often due to trying to figure out the basis of gambling games. Those who ran those games had already figured these things out (or gone out of business), but the theoretical basis was missing. When I taught statistics, my students had a rough time getting through the probability chapter. But reading up on the history of probability theory, I see that it wasn’t until the 17th century that a lot of the basic principles were worked out (e.g. the work of Pascal). So if it took that long for people much smarter than my students (and me!) to figure this out, I should be tolerant.
For those who don’t want to google, the books I think he’s referencing are : Think Again: The Power of Knowing What You Don’t Know by Adam Grant or Judgment Under Uncertainty: Heuristics and Biases by Daniel Kahneman (though I’d say Thinking Fast and Slow is his book that’s more in the pop culture realm).
I think the class was assigned a book to write about. He didn’t do the assignment but used the Grant or Kahneman gambit to wriggle out of it.
Interesting mention of “assessment of risk” as I have noted some interesting human behavior on the investing forum I read. There is a particular situation I find illustrates that.
There is a concept in tax called capital gain with capital loss a negative gain. This occurs when you sell something, often stocks or mutual funds, for a different price than you paid for it in a non-tax-advantage way.. For a capital gain, you owe tax on it in the year it took place. A capital loss is more complex. First it counteracts corresponding capital gains. Any left in the year can be applied against ordinary income up to $3000. Remaining losses carry over year to year.
An additional complexity is the wash sale rule. That means that you can’t generate a loss if you purchase a “substantially identical” security with +- 30 days, in your taxable accounts or IRAs (or your spouse’s). That what the regulations say, and the IRA part was added by a Revenue Ruling from the IRS.
Some people had decided that other tax-advantage accounts, notably 401ks and the like, should also be included. To the point where they are very fearful of causing such a wash sale. There has never been found a case where the IRS ruled such an event or hinted that they would And if they did, why didn’t the include in in the RR or issue a new one?
I have pointed out the extreme unlikeliness of this happening, including that it’s probably not possible under the current law. I have also pointed out the real-life event of objects thrown up and crashing through windshields on the highways. This happens, multiple times a year. People are injured and even killed. I ask what precautions they take. Avoid the highway? Purchase armored windshields? No.
Some years ago at Easter time I sent an origami rabbit I had made to a woman I was besotted with. I wrote a couple of words inside before completing the fold. Not long after that she broke my heart, but I liked the idea of secret messages hidden in origami that may never be found.
@Brian: That’s a particularly strange conception because there are no capital gains or losses in a 401(k) or IRA, and the basis doesn’t matter. Those are taxed as ordinary income when withdrawals occur.
I was optimistically thinking about retiring early, in 2009. But in 2008 my 401(k) became a 201(k) [that’s a joke] as stock investments declined. I clearly wasn’t going to retire in 2009. But I noticed that many mutual funds hold similar, but not entirely identical stocks. In my non-retirement accounts I sold many of my mutual funds and bought others which had similar holdings and strategies – and looked for lower expense ratios. This gave me a lot of capital losses, but did not trigger any wash sale issues.
About 2001, I had some nice stock options in an IPO company I worked for. I thought it would be bright to wait a year before selling it, so I could take advantage of the lower capital gains tax. About 10-11 months into that, the company tanked and the stock was useful only as toilet paper. Sigh.
@zbicyclist re: Brain
It kinda makes sense though, as long as you sell in the taxable account and buy back in the non-taxable one: you end up holding the same stock in the end, but you’ve managed to trigger a loss in the taxable account, where you can use it to offset gains; so you are substantially in the same position at the end of the transactions (you still own the same stocks, so it’s a wash), but you have gained a “loss” you can apply to a gain, thus enabling you to avoid paying taxes on it, so you have enriched yourself. Now why it should only apply to IRAs and not 401(k)s is illogical…
I’ve just recently come to the realization that since 401(k)s are taxed as ordinary income, and capital gains are taxed at 15% or 20%, that I should move my stocks out of the 401(k) and in the taxable account, so that I can get the lower capital gains rate on the profits when I sell rather than the almost certainly higher ordinary income rate; the 401(k) should only hold my TIPS bonds, mostly because accounting for TIPS otherwise is a royal pain in the ass. I’m almost to the point of being convinced that 401(k)s are really just a scam to get you to pay more taxes in the end on capital gains — sure, you don’t pay until you take it out, so you have the illusion of having saved all these taxes, but you will eventually have to pay them, and it will almost certainly be at a higher rate — your normal tax rate — when you do. Yes, yes, you might convince yourself that you’ll be in penury when you retire, but realistically, your tax rate won’t be less than at least 25%, so you’d have been better off with the 15 to 20% rate, especially considering the future value of money thing… If it weren’t for the really Rube Golbergesque (to bring comics back into it) way that TIPS are taxed, I wouldn’t see any use for a 401(k)… (Well, that, and that that is where companies can put matching funds for retirement, so you need one to cash in on that…)
zbicyclist: The same is true of IRAs, and that makes it bad to have a wash sale there. If, in a taxable account, you sold VTI at a loss and bought it back within the exclusion period, then all that happens is the basis of the “replacement shares” is adjusted. If it happens in an IRA, then the loss is gone because there is no concept of capital gains.
Here is a link to the IRS Revenue Ruling on IRAs.
Click to access rr-08-05.pdf
The main reason many, like me, believe that 401ks don’t count is that you don’t own that, it is in a tax-exempt trust, as is an IRA. The ruling, which was very narrow, cited a case where a trust had wash sales but was one over which the taxpayer had “absolute dominion and control”. It applied the same to IRAs, using the phrase “even though an individual retirement account is a tax-exempt trust”. To me that means the normal assumption should be that such a trust is not subject to wash sales. As many know, your control over a 401k is usually limited to one degree or another,.
Another important line list: ” This ruling does not address any issues other than those specifically addressed herein.” 401k plans are not addressed so they should NOT be subject to the wash sale rule. It seems unlikely that the IRS would have just forgotten about a large portion of the investing landscape. This is a 2008 ruling and there have been no updates or new rulings to include these accounts.
larK: The usual advice is to have bonds or other fixed income, which generally have lower growth and most of the dividends or interest taxable as ordinary income, in tax-deferred accounts. Stocks should be in Roth or taxable account. That’s ideal, but reality might be different. Many people have the bulk of their savings in 401k or similar plans. There is debate about whether to defer or use Roth in those accounts. There is value in deferral if taxes will be lower when funds are withdrawn.
In my case, over time my Roth grew because of a little-known feature of some workplace plans nicknamed “Mega Backdoor Roth”. There is a deferral or Roth limit for those plans, $24,500 for 2026. However, plans call allow you to add money above that which gets no deferral but which you can convert to Roth within the plan or take a rollover to a Roth IRA. Also, I had taxable holdings. Over time, the 401k tax-deferred account was squeezed by the others until it became totally fixed income and even couldn’t hold it all.
One thing to know about a Roth IRA, which you will find out when you start getting Medicare which will be far too late to do anything about it, is that the amount of your Medicare premium depends on your Adjusted Gross Income. At certain AGI thresholds, your Medicare premium goes up quite dramatically.
Traditional IRA’s are tax deferred. Contributions reduce AGI; distributions increase AGI. So when you take money out in retirement, it’s taxable income.
With a Roth IRA, contributions are paid in after taxes. Which is to say, the money you put in was part of your AGI when you put it in and you paid the income tax at that time. A nice feature of Roth IRA’s is that earnings in the account are NOT counted as taxable income or part of AGI. So taking money out of your Roth IRA does not increase your AGI and won’t result in higher Medicare premiums.
Some will take the deferral in the high tax years, then a bridge period before taking Social Security where they convert some to Roth at low MAGI years.