welcome to "on the money." two monkeys do better than the average investor when it comes to picking stocks. why speaking like a freak could help you pick stocks. why airline profit is your loss. the american experience. how mba students are going global to do good and to do well. and millennial investing. >> being realistic as well. >> "on the money" starts right now. >> this is america's number one financial news program. now, becky quick. >> here's a look at what's

making news. tensions are spiking in the middle east and oil prices are rising along with that. violence has escalated in iraq with radical groups seizing control of areas in the northern part of the country. that's made the oil market extremely nervous. crude oil closed at more than $107 a barrel. up more than 2% at the end of the week. that helped send the markets down as well. the dow falling triple digits for the second day in a row and sporting a two-day losing streak by the day's close. the s&p 500 had its worst day in month. disappointing retail sales in may. economists expected an increase of more than we got. that is always closely watched because consumers make up -- and electric automaker tesla has nothing to hide and to prove it, the company is making its patents freely available.

elon musk says the move is to help advance electric vehicle technology. electric cars with zero emissions make up less than 1% of global auto sales. he is the co-author of freak no, ma'am. stephen dubner has co-authored the new book, "think like a freak," and joins us now. >> great to see you. >> you said that monkeys throwing darts at newspapers could have about the same or better results as stock pickers. we have a lot of people watching from home and they may make them wonder what retail investors should do. >> i'm not saying anything that anybody who really knows the lit rature doesn't already know. which is that the average stock picker, even the average active manager doesn't beat the market. it says we're not good at predicting the future, surprise

of surprises, and that for the average investor, it's hard to predict the future, hard enough to understand the past well. one thing, we understand about from the past is that dollar cost averaging and allocation are generally pretty good, much better than the alternative, which is speculation and trying to time the markets and so on. zpl and you're not saying don't invest in stocks. you're saying invest in an s&p index where you have much lower costs. >> i'm totally promarket. just antistupidity and it's very easy to get caught up in the belief that we can all be better than the market generally, or that the people that i happen to know or that my uncle told me about happens to be better. >> i agree with you 100%. a lot of people doing this themselves, they're doing this as a second job. let's talk about oil prices. they spiked this week. there was a lot of tensions rising in iraq and i wonder, i know it's hard to try to figure

out what's going on with geo political issues. is this something long-term investors should be worried? >> let me take a page from our new book, i don't know. we have a really hard time saying i don't know. especially someone like me, coming on to an appearance like this, but i don't know, so let me tell you why. geo politics and commodities prices are two of the most unpredictable realms in our society. we've seen that well through good academic research on this. >> "think like a freak," i love the title. what does it mean? >> we just peel back the layers of an onion to see how we make the decisions we do. what are the causes of our various behaviors and can we all think a bit more productively, more rationally and more creatively? we came up with a kind of very practical toolkit.

this is still full of stories, but they're stories that illustrate a series of principles that we think can help anybody in any situation. whether it's personal or business. things like acknowledge right off the bat what you don't know. don't be afraid of that. be willing to think like a child. children have a set of observations that are very different from ours. many not that useful, but some are. we advocate that people appreciate the upside of quitting. that they learn to appreciate the downside of talk thinking and appreciate the upside of opportunity cost. so appreciate the upside of quitting, whether it's in a strategy, a job. >> and that's part of what you say is so important. failure can be a really good thipg. >> it can, but if we stigmatize it and treat it like pure loss, then we avoid it and don't face up to it. and even if we think we're

failing, we'll stick it out because morally, we feel not quitting is the right thing to do and there may be cases where that's so and it's hard to say. there's no perfect rhythm for telling you when you should quit, when you should giver up. >> i like what you say about learning things from kids. i have a 2-year-old. what's something quou might learn from a child? >> many things. their brains are just faster and perception is faster. the human brain, it's at its greatest powers from about 14 to 24, so for the rest of us, we're on a long, slow decline and we know that, but we can harness some of what makes those brains so powerful. one is not being afreud to come up with observations that aren't sophisticated, that we kind of stop doing and just be willing to be excited about what really excites you because it's hard to solve a problem if you march into it with that kind of

dutiful demeanor, like oh, this is a big, serious thing and we have to come up with some things that are in line with what everybody else has come with up. be wild. be creative. be child like in your idea generation and then put on your adult hat where you can profit from your wisdom, your ability to bs. that's one thing that adults do well. >> kids are much better at calling out the emperor when he's wearing no clothes. these are great words to live by. up next, we are on the money. travelers are experiencing turbulence in the friendly sky. does industry profit mean traveler loss? and later, the business school class that took the show on the road. business and start ups going global. take a look at how the stock market ended the week.

first, it was delta. now, united airlines announcing that next year, members of its mileage plus program will earn miles based on the price of their ticket rather than how far they fly. does this mean they're getting more or less out of their loyalty programs? joining us now to explain is aviation expert, michael boyd. thank you for joining us today. >> my pleasure. >> all right, so, i've heard about some of these upgrades. to me, it sounds like you're losing out if you're a traveler. what do you think? >> frequent flier programs are obsolete. they were originally put into effect to keep people on the airlines. to keep you on united so you didn't fly piedmont or continental or ozark. they're gone. i have a frequent flier program

to give away free seats is obsolete. the planes are full. they're going to be ratcheting these up so they'll only get relief from a lot of incon venuses. >> i've noticed i have to fly to houston to go back to omaha or go to south carolina to get somewhere north. you have to fly twice as far. >> air transportation does not work. the economics don't work for small community and point to point service. as far as these frequent flier programs, i look at them as almost being a union card you have to earn to not get nonperks. if you earn the right union card, booking two people that don't bathe. airlines want you to show your loyalty or you're not going to be very happy. >> it's not about perking anymore. it's about not getting demerits. >> that's exactly what it is.

and don't try to book that free seat to hawaii. you're going to make 14 stops to get there. the frequent flier program is there for the business traveler so he can get on early and maybe have some overhead space. >> you said the airline industry doesn't work. we've been watching what's happened over the last couple of years. airline stocks have taken off and that's been as there's more consolidation, less competition. so, my question is it's good news for shareholders, but does it all come at the expense of travelers? >> i think it's just a basic economics of air transportation. airlines aren't chasing volume anymore. they're chasing revenue and they'll give up turf if they have to. they don't really care about more people. they want to make money. that's why we're not seeing growth in traffic for the rest of this year because there's not anymore seats, but the real issue with a lot of applications, can't make money because of the economics.

so, we're going to be connecting through connecting hubs, but we are going to have access to and from the rest of the world better than we have before. >> so, get over it, in other words. this is just the way it has to happen. >> it is. we'll get the air service, it's over. tune up the truck and drive to charlotte and you'll be okay. >> the former head of continental airlines used to say you are only as smart as your dumbest competitor. >> i would maintain there are no dumb competitors. america has a whole new management team. richard anderson at delta. today, we don't have any fruitcakes out there trying to start airlines, so it's a stable industry. >> we've also been talking about higher oil prices, highest level in months because of the turmoil in iraq. just wonder if that has an impact on customers trying to

board those planes. >> remember, there's no airplane flying today when it was designed and you would have thought oil would be at 50 bucks a barrel. so, t a different kind of a system and that means as oil prices go up, the transportation system is going to have to adjust for that and that means there's going b to be less flying to some smaller and mid sized communities and the air transportation system will have less reach. it's just raw economics. >> thank you so much. >> thank you. >> up next, we are qult "on the money." we'll talk to the business school professor exporting entrepreneurialism

do you have the right skills for living in a start up world? a group of students took the classroom on the road to learn from entrepreneurs in south africa.

joining me now are columbia business school associate professor, don weiss and his student, matt burger. thanks so much for being here. you're an entrepreneur and business school professor. i just wonder, what is it like going into another culture, taking a deep dive? what do you learn about why do it? >> we picked up a lot of lessons in cape town, south africa. things that were different about african culture and things that were different in africa, but also things different about starting and running a business that are the same regardless of where you are in the world. >> what's a common thread? something entrepreneurs every have in common? >> passion. for one. focus, hopefully. perseverance. >> matt, you worked on wall street, but said this was a life changine ining experience.

>> it was interesting for me seeing how the start up jeb ration has been booming here in the u.s. how different it was to see people doing you know, what i see here in new york in a place like south africa and what the challenges were and how they were different. the gentleman that we met with, that we worked with, he is working to try and train new employees and can't communicate with them in effective ways because some don't have regular accents. >> we think of infrastructure and all the things we take for granted. it just doesn't exist. >> exactly. >> we talk about the brick countries a lot.

you can't as matt was -- >> how does that work? >> there are many programs that skirt the official government programs because the official government programs simply don't work. >> you see business students, you've been watching them for a long time, too. i wonder how their career decisions were affected by the great recession? >> there's a definite change and when i started teaching entrepreneurship 16 or 17 years ago, very few people were number one interested in entrepreneurship. columbia business school had a

big corporate image. today, of course, it's very different. today, working at ibm is perhaps riskier than being an entrepreneur and so, you have the make of the school is very dif rent. you have a curriculum that started when i started one or two r courses in entrepreneurship and now, you have literally dozens. >> matt, what's your plan for when you graduate? >> i'm likely going to stay with what i'm doing now, but doing this trip really got me thinking about all the other opportunities there are out there. we actually, one of our speaker, he had worked at my firm as well and since left and moved to south africa and is starting a business there. >> i want to thank you both for coming in. >> thank you. up next, a look at the news

for the week ahead and for the 20 something, know more about saving than you do? the lessons millennials learned from the great recession.

for more on our show and our guests, go to our website. otm.cnbc.com. here are the stories coming up that may impact your money this

week. monday, we'll find out how industrial production faired for the month of may. tuesday is a busy day. the -- kicks off its two-day meeting on monetary policy. also, the consumer price index is due and we'll be getting housing starts for may. and wednesday, amazon has an event that believes may launch the first -- smart phone. all you baby boomers out there, step aside. for the first time in 67 years, there are more members of another age group. according to the census group, it's the millennials. sharon especiallier son is here to tell us more about this generation and what others can learn from them. >> generally speaking, they're the children of boomers who range in age from 18 to 33 years old. coming of age in a financially -- time is key to defining their views on money and life. >> the 2008 to 2009 great

recession really did have a key impact on me and my generation as far as how we choose to save for our future retirement. definitely, our parents played a role in that. >> the generation's attitudes about money and risks have been shaped by a downturn that has constrained -- as well as their parent's real estate values, investment portfolios and retirement savings. so, they are juggling a lot. >> never really thought about it. these are people who their entire financial understanding of life. >> they're between 22 and 33, generally, but it's the 22-year-olds that are now really taking over as the largest demographic group. >> what is this group doing right? >> setting financial goals. whether it's paying down debt, paying off student loans or savoring for retirement, they are really interested in having

some goals and trying the work toward those. the issue is that because of what they saw their parents face, they want to start saving now and they're saving consistently. they're not reckless. they're a bit more cautious, more conservative with their investment strategy. >> being conservative can be a good thing, unfortunately, sometimes, it can work against you. >> that's right and so, in your 20s, if you're overweight and in cash, which many are, that's not really a great thing. about half of them are sitting in cash and have only about a third of their portfolio in equitie equities. a lot of financial advisers would tell you you need to have almost the entire portfolio. >> this is the one time you can afford to be more reckless or be a long-term hold er. >> they're getting advice from their friends, their family members. they're not really seeking the

advice of financial advisers, so that's another thing that could help them along the way. >> is there anything that these children of the baby boomers can teach the rest of us? >> i think a lot. number one is having a plan. they're planners. that's not really the conventional wisdom, but that's what they're doing and that's what we all need to do. they're saving early for retirement. 25. starting to save. >> that's fantastic. >> that is phenomenal and they're realistic about work and life. they're not trying to retire at 65. that's not an option. they want the type of job that will continue for years and years to come. so retiring at 70, that's not weird for them. that means they're doing work they enjoy, they're getting paid for it. >> got the right attitude. >> that's the show for today. i'm becky quick. thank you so much for joining me. next week, we have a special look at the apollo theatre in harlem. a cultural institution and

business for 80 years now. each week, keep it right here, we are "on the money." have a great one. honey bunches of oats! it's got grains, which i like. i like the little bunches of oats. what i like is actually the flakes. it's got crunch, which i love. mmm. it's really good. honey bunches of oats. yay!

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. nbc 10 news starts now. setpa is back on track this morning just hours after some rail employees walked off the job. president obama is forcing them to return to work. in for another beautiful day. what a gift to dads on father's day. here's a look at shore. changes could arrive by tomorrow. good morning. this is nbc 10 news today. i'm rose marmary conneors on th father's day. what a diffee