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Celebrity Analytics: Who's The Most Overpaid?

Forbes says Nicole Kidman is a highly overpaid actor.  But then later they say that Russell Crowe is the most overpaid actor.  Forbes measured the amount of movie revenue made per dollar of actor's salary:

$5 ... Russell Crowe
$8 ... Nicole Kidman, Jim Carrey, Will Ferrell
$9 ... Adam Sandler
$10 .. Angelina Jolie

I call "bunk" on this figure, though.  All it is is the inverse of the actor salary taken as a percentage of movie earnings.  It makes sense that top actors can take in 10-20% of a movies earnings (translates into the $5 to $10 shown above).  So Russell Crowe's $5 may just mean that he really is worth 20% of movie revenues.

The problem with real estate market predictions

I am constantly amused by analysis such as this Housing Market Analysis from National City Corporation and Global Insight:

The report named Naples, Florida as the most overvalued of all housing markets in the United States. A single-family, median-priced home there sells for $329,970, 84 percent more than what it should cost -- $180,956 -- according to the analysis.

National City arrives at its estimates of what the typical house in these markets should cost by examining the town's population densities, local interest rates, and income levels. It also factors in historical premiums and discounts for each area. Other markets deemed wildly overpriced included Merced, California (by 77 percent), Salinas, California (75 percent), and Port St. Lucie, Florida (72 percent).

Pay particular attention to the section I bolded.  The analysis is highly inaccurate because it does not include 2 very important things:  Net Worth and Population Growth.  Net Worth is important because many Floridians are retirees with equity of $500,000 or more but who are also on a fixed income, perhaps $40,000 or less.  Second, Florida's population is booming as many people want to get away from the cold and many retirees are relocating to Florida.  In fact, one major driver of Florida home values are people relocating from New York where home values are at least twice that of Florida's prices.

Laughing at CNNMoney: The real estate party isn't over; Google is invincible

CNNMoney today posted two of the most laughable financial articles I've ever seen.

In "Real Estate" Is the party over?" (written by Fortune), they predict that housing values in Cincinnati and Dayton will see a greater percentage increase than the booming markets of Orlando and Phoenix.  It looks like Fortune forgot to factor in expected growth rates -- it is population growth that is driving home values in Orlando and Phoenix.  And people are moving away from Ohio to get away from the cold!

Next, in "Gunning for Google", a CNNMoney senior editor makes the hilarious claim that Yahoo's purchase of del.icio.us spells doom for Google because Yahoo can now show community-driven search results.  But the author fails to acknowledge that any alteration to their search results could detract Yahoo users from paid search results - meaning this could hurt Yahoo revenue.  Most del.icio.us users prefer Google anyway.

Also, the author claims that a MSN-AOL deal would also spell doom for Google.  Of course, the author wrote the article back on 12/8 when a MSN-AOL deal looked likely.  But it's now about 10 days later and tomorrow we expect a Google-AOL deal to be officially announced.  Shame on CNN.com for not having common sense posting the out-of-date article!  In any case, the claimed MSN-AOL deal would have barely impacted Google.  Anyone who discounts Google fails to acknowledge that global online ad sales are expected to grow at least 20% per year for the foreseeable future and that Google is best poised to take advantage of this growth.

Google positions dropping?

Just thought I'd comment on an article titled "Keyword Prices Rise in Q3; Ranking Positions Drop" from DMNews.com.  How can ranking positions be dropping when someone always has to be 1st, 2nd, 3rd, etc?  Of course, if someone drops in their position then someone else fills the spot.  Direct marketers are upset with Google's recent change that improves the quality of Google results.  The markets were getting by for years in efforts that resemble spam.  Anyway, the concept in the article is explained well in the article itself.  It's the title that's inaccurate.

Motley Fool's typo on Google earnings

As a follow-up to Google's earnings announcement last week, Motley Fool made the statement below.  They still haven't corrected it (more than a day later).  Oops!

Over the past four quarters, Google has generated an impressive $1.3 million in net profits. The $450 argument would seem to claim that Google is growing so quickly that paying better than 100 times that bottom line sum is a reasonable trade.

BTW, they meant to say Google has earned $1.3 billion, not million.

Fiancial website can't subtract

Per an article on eBay at The Street, $42.01 - $2.51 = $29.50.  Ouch!  I hate to have this person as my financial adviser.  Here's the blurb (I'm sure they'll be correcting this today):

Shares of eBay rose $1.59 during regular action Wednesday to $42.01 before reversing course after hours. On Instinet Thursday, they were off $2.51 to $29.50.

Don't measure popularity/buzz via search engine "hits"

In a Wall Street Journal article called Estimates for Web Search Results
Are Often Wildly Off the Mark, The Numbers Guy points out that too many people are using web "hits" to define how popular a certain topic is.  See that article for his eloquent explanation, but a quick example will suffice.

Example:  You do a web searches for New York Yankees and Cincinnati Reds and try to determine the relative popularity of each by looking at the number of times each can be found on the internet.  What will skew the results is when all MLB baseball teams are listed on the same page, so you won't get a fair measurement.

In terms of measuring buzz for a topic, I recommend BlogPulse Trend Search.

The Numbers Guy Covers an Inaccurate Social Statistic on Child Sexual Abuse

The Wall Street Journal's self-title "The Numbers Guy", aka Carl Bialik, tries to track down the root of an often quoted statistic that 100,000 websites contain images of child sexual abuse.  He discovers the number is largely an urban legend.  While child sexual abuse is indeed a serious matter, the more approprieate statistic would be an accurate assessment of the number of those involved in such criminal activity.  It's possible that a few criminals are reponsible for the majority of the crimes (in producing the material).  The more efficient means of policing this would be to find these people, just like busing the Columbia drug cartel some years ago. 

Users of such material represent an easy target, by pedophiles will never be cured and will always be there.  Thus, the governments of the world should cooperate to find the producers (just like they have been).