About Bill Gross leaving PIMCO: money is following. From the Wall Street Journal and CNN:
Billions Fly Out the Door at Pimco
About $10 Billion Is Withdrawn After Departure of Gross
Pacific Investment Management Co. suffered roughly $10 billion of withdrawals following the Friday departure of co-founder Bill Gross, a person familiar with the matter said, a sign of how quickly Mr. Gross's surprise move is reshaping the bond-investing landscape.
Pimco is bracing for more outflows on the heels of the veteran investor's departure after months of internal strife over his leadership...
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Link: http://online.wsj.com/articles/billions-fly-out-the-door-at-pimco-1411948188
Bill Gross exit could cost Pimco $400 billion
According to Morgan Stanley (MS), investors could yank a whopping $400 billion of assets from Pimco following the surprise exit of Gross on Friday.
Morgan Stanley based that huge figure on the 6% drop in the share price of Pimco parent Allianz (ALIZF). The investment bank said in a report Monday that implies a loss of around 20% of the Pimco's total assets.
Pimco and Allianz executives scrambled over the weekend and on Monday to soothe nervous clients and analysts after Gross shocked the financial world by leaving the firm he founded in 1971 for Janus Capital (JNS).
Gross directly managed about $300 billion of assets, although Morgan Stanley estimates he had "influence" over around $500 billion...
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Link: http://money.cnn.com/2014/09/29/investing/pimco-bill-gross-outflows-janus/index.html?
Monday, September 29, 2014
Sunday, September 28, 2014
ESPN - NFL - Conflicts of Interest
Hypocrisy and serious conflicts of interest bind ESPN and the NFL. The story below examines the corporate motivations of ESPN when it 'covers' issues like wife beating, concussions, big money, etc.
In the same light, consider the influence of corporate motivations when you ask this about your investments: what and where are the conflicts of interests?
Hidden fees? Compromised referrals? Crony networks of advisers scratching each other's back at your expense? What about the selection of investment choices that are offered to you?
What is clear to us is that almost all investors have no clue how much of their money is lost to costs.
When we show investors the actual cash they pay in fees today, and how much that builds over time, every single person is stunned at the large amounts of money that are lost to costs.
There is a better way to protect your investments from conflicts of interest and save more of your money from being lost to costs: own the lowest cost, most reliable index ETFs. Then keep them for life. PB
----
From The Motley Fool online:
The engine that makes ESPN go
Every once in a while, the media's dirty little secret gets paraded about for all to see.
The latest example is ESPN's three-week suspension of Bill Simmons after the popular columnist accused NFL commissioner Roger Goodell of lying about being previously unaware of a video showing former-Baltimore Ravens running back Ray Rice knocking out Rice's now-wife in a hotel elevator...
So, here's the issue: Did ESPN suspend Simmons because of his obscenities-laced comments, or did the sports network do so because Simmons attacked the head of ESPN's most important business partner, the NFL?
Allegations concerning a conflict of interest between ESPN and the NFL are nothing new. In 2012, the network teamed up with PBS's Frontline to produce an investigative piece about the league's handling of head injuries.
The tenor of the resulting two-part documentary, League of Denial, was that the NFL knew more about the permanent damage done to its players' brains than it had publicly acknowledged.
Somewhere along the way, however, ESPN withdrew its support from the project, explaining that it ended the partnership because of a misunderstanding over editorial control...
Taking all of this into consideration, there is little question that ESPN at least appears to have a conflict of interest between its relationship with the NFL...
Underlying it is a $15.2 billion deal giving ESPN the right to broadcast Monday Night Football games through the 2021 season.
...if ESPN were a stand-alone business, it would have a higher market capitalization than 408 of the components on the S&P 500, handily outpacing the likes of Fedex, Delta Air Lines, and Target.
And it's worth roughly twice that of CBS Corporation, which owns dozens of cable networks and local television and radio stations throughout the nation's largest media markets...
----
Link: http://www.fool.com/investing/general/2014/09/26/espn-the-nfl-and-conflicts-of-interest.aspx
In the same light, consider the influence of corporate motivations when you ask this about your investments: what and where are the conflicts of interests?
Hidden fees? Compromised referrals? Crony networks of advisers scratching each other's back at your expense? What about the selection of investment choices that are offered to you?
What is clear to us is that almost all investors have no clue how much of their money is lost to costs.
When we show investors the actual cash they pay in fees today, and how much that builds over time, every single person is stunned at the large amounts of money that are lost to costs.
There is a better way to protect your investments from conflicts of interest and save more of your money from being lost to costs: own the lowest cost, most reliable index ETFs. Then keep them for life. PB
----
From The Motley Fool online:
The engine that makes ESPN go
Every once in a while, the media's dirty little secret gets paraded about for all to see.
The latest example is ESPN's three-week suspension of Bill Simmons after the popular columnist accused NFL commissioner Roger Goodell of lying about being previously unaware of a video showing former-Baltimore Ravens running back Ray Rice knocking out Rice's now-wife in a hotel elevator...
So, here's the issue: Did ESPN suspend Simmons because of his obscenities-laced comments, or did the sports network do so because Simmons attacked the head of ESPN's most important business partner, the NFL?
Allegations concerning a conflict of interest between ESPN and the NFL are nothing new. In 2012, the network teamed up with PBS's Frontline to produce an investigative piece about the league's handling of head injuries.
The tenor of the resulting two-part documentary, League of Denial, was that the NFL knew more about the permanent damage done to its players' brains than it had publicly acknowledged.
Somewhere along the way, however, ESPN withdrew its support from the project, explaining that it ended the partnership because of a misunderstanding over editorial control...
Taking all of this into consideration, there is little question that ESPN at least appears to have a conflict of interest between its relationship with the NFL...
Underlying it is a $15.2 billion deal giving ESPN the right to broadcast Monday Night Football games through the 2021 season.
...if ESPN were a stand-alone business, it would have a higher market capitalization than 408 of the components on the S&P 500, handily outpacing the likes of Fedex, Delta Air Lines, and Target.
And it's worth roughly twice that of CBS Corporation, which owns dozens of cable networks and local television and radio stations throughout the nation's largest media markets...
----
Link: http://www.fool.com/investing/general/2014/09/26/espn-the-nfl-and-conflicts-of-interest.aspx
Friday, September 26, 2014
PIMCO CIO William H. Gross to leave the firm
From PIMCO.com:
September 26, 2014, (Newport Beach, CA): PIMCO, a leading global investment management firm, announced that Co-founder and Chief Investment Officer (“CIO”) William H. Gross, has resigned and will leave the firm, effective immediately.
The firm has a succession plan in place and its Management Board, comprised of its Managing Directors, will confirm shortly the election of a new Chief Investment Officer. Relevant portfolio management assignments will also be announced at that time.
Said Mr. Hodge: “While we are grateful for everything Bill contributed to building our firm and delivering value to PIMCO’s clients, over the course of this year it became increasingly clear that the firm’s leadership and Bill have fundamental differences about how to take PIMCO forward...”
----
Link: http://www.pimco.com/EN/PressReleases/Pages/PIMCO-CIO-William-H-Gross-to-leave-the-firm.aspx
September 26, 2014, (Newport Beach, CA): PIMCO, a leading global investment management firm, announced that Co-founder and Chief Investment Officer (“CIO”) William H. Gross, has resigned and will leave the firm, effective immediately.
The firm has a succession plan in place and its Management Board, comprised of its Managing Directors, will confirm shortly the election of a new Chief Investment Officer. Relevant portfolio management assignments will also be announced at that time.
Said Mr. Hodge: “While we are grateful for everything Bill contributed to building our firm and delivering value to PIMCO’s clients, over the course of this year it became increasingly clear that the firm’s leadership and Bill have fundamental differences about how to take PIMCO forward...”
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Link: http://www.pimco.com/EN/PressReleases/Pages/PIMCO-CIO-William-H-Gross-to-leave-the-firm.aspx
Thursday, September 25, 2014
Bond Traders just Fffffffade Away...
Not just looking for a job - looking for a new career. PB
----
From Businessweek.com:
In the 1980s bonds were the center of action on Wall Street, and traders—like the fictional Sherman McCoy in The Bonfire of the Vanities—were “masters of the universe.”
Those days are gone...
The size of the bond market in the U.S. ballooned to $37.8 trillion at the end of 2013, up $5.1 trillion since 2008 ... even so, trading in dollar-denominated bonds declined 22 percent...
As profits fell, so did pay. Total compensation at the biggest banks has fallen as much as 50 percent for high-yield and investment-grade traders and up to 25 percent for distressed-debt traders since 2010...
While veterans shuffle from job to job, some younger traders have gotten out and moved into industries ranging from real estate to public relations to information technology.
The ones who remain face long odds, says Michael Maloney, president of his own fixed-income recruiting firm. “For every 10 of them, there’s going to be three or four left,” he says.
“What’s the time frame? Well, everybody I know is looking for a job—not looking for a job, looking for a career.”
----
Link: http://www.businessweek.com/articles/2014-09-25/bond-traders-fade-away-as-industry-shrinks
----
From Businessweek.com:
In the 1980s bonds were the center of action on Wall Street, and traders—like the fictional Sherman McCoy in The Bonfire of the Vanities—were “masters of the universe.”
Those days are gone...
The size of the bond market in the U.S. ballooned to $37.8 trillion at the end of 2013, up $5.1 trillion since 2008 ... even so, trading in dollar-denominated bonds declined 22 percent...
As profits fell, so did pay. Total compensation at the biggest banks has fallen as much as 50 percent for high-yield and investment-grade traders and up to 25 percent for distressed-debt traders since 2010...
While veterans shuffle from job to job, some younger traders have gotten out and moved into industries ranging from real estate to public relations to information technology.
The ones who remain face long odds, says Michael Maloney, president of his own fixed-income recruiting firm. “For every 10 of them, there’s going to be three or four left,” he says.
“What’s the time frame? Well, everybody I know is looking for a job—not looking for a job, looking for a career.”
----
Link: http://www.businessweek.com/articles/2014-09-25/bond-traders-fade-away-as-industry-shrinks
Sunday, September 21, 2014
Nobel winner: Active management is 'never' good
Another reminder why we say it's best to cut your investment costs for the rest of your investing life.
Nobel Prize winner Eugene Fama clearly says do not try to 'time' or outguess the market; and, don't use active managers.
We know that using active managers means giving away your money - unnecessarily - through higher fees.
Bottom line: paying higher fees means that the retirement nest egg of someone else becomes larger at the expense of your nest egg.
Is this simply how business is done, or is this the way Wall Street socializes your retirement savings? We say there is a better and simpler way to invest. PB
----
From CNBC.com:
Eugene Fama, the University of Chicago investing researcher who won the Nobel Prize in economics last year, once again warned investors against the lure of active management.
"The question is when is active management good? The answer is never," Fama said to laughs Thursday at the Morningstar ETF Conference in Chicago.
"If active managers win, it has to be at the expense of other active managers. And when you add them all up, the returns of active managers have to be literally zero, before costs. Then after costs, it's a big negative sign," Fama added...
Fama dismissed the idea that it was possible to pick the best managers.
"The good ones might be good or they might be lucky. The bad ones might be bad or they might be unlucky.
"We can't really tell the difference," he said.
"I don't know if it would ever make sense, even if the fees were zero, I don't think you'd be better off because you'd be investing in an undiversified way."
Asked about Warren Buffett's long-term record of picking good companies, Fama said the Berkshire Hathaway chief actually agreed with his index-based thesis.
Buffett said recently he actually has directed much of his fortune to be placed in passive index funds after he dies.
"He's, like, my hero," Fama said. "What he says is, 'I can pick a company every couple years, but if you have to form a portfolio, you're better off going passive.'"
"All the behavioral people say the same thing," Fama added. "In the end, they realize that the game of doing something active is fraught with problems."
Fama was also asked about hedging against big crashes, like what happened to the markets in 2008.
Attempting to protect against them, he said, was the unwinnable game of market-timing.
"If you sold when the market crashed, you made a big mistake, and if you saw it coming you're a genius," Fama said.
----
Link: http://www.cnbc.com/id/102014057
Nobel Prize winner Eugene Fama clearly says do not try to 'time' or outguess the market; and, don't use active managers.
We know that using active managers means giving away your money - unnecessarily - through higher fees.
Bottom line: paying higher fees means that the retirement nest egg of someone else becomes larger at the expense of your nest egg.
Is this simply how business is done, or is this the way Wall Street socializes your retirement savings? We say there is a better and simpler way to invest. PB
----
From CNBC.com:
Eugene Fama, the University of Chicago investing researcher who won the Nobel Prize in economics last year, once again warned investors against the lure of active management.
"The question is when is active management good? The answer is never," Fama said to laughs Thursday at the Morningstar ETF Conference in Chicago.
"If active managers win, it has to be at the expense of other active managers. And when you add them all up, the returns of active managers have to be literally zero, before costs. Then after costs, it's a big negative sign," Fama added...
Fama dismissed the idea that it was possible to pick the best managers.
"The good ones might be good or they might be lucky. The bad ones might be bad or they might be unlucky.
"We can't really tell the difference," he said.
"I don't know if it would ever make sense, even if the fees were zero, I don't think you'd be better off because you'd be investing in an undiversified way."
Asked about Warren Buffett's long-term record of picking good companies, Fama said the Berkshire Hathaway chief actually agreed with his index-based thesis.
Buffett said recently he actually has directed much of his fortune to be placed in passive index funds after he dies.
"He's, like, my hero," Fama said. "What he says is, 'I can pick a company every couple years, but if you have to form a portfolio, you're better off going passive.'"
"All the behavioral people say the same thing," Fama added. "In the end, they realize that the game of doing something active is fraught with problems."
Fama was also asked about hedging against big crashes, like what happened to the markets in 2008.
Attempting to protect against them, he said, was the unwinnable game of market-timing.
"If you sold when the market crashed, you made a big mistake, and if you saw it coming you're a genius," Fama said.
----
Link: http://www.cnbc.com/id/102014057
Tuesday, September 16, 2014
Roughed up in the George W. Obama Economy
If you're doing good, you're doing good. But most people are going sideways. 2 out of 5 doing good to great. 3 out of 5 sideways to down.
George W. Obama's economy has separated the middle class.
Soon, in a few years, the squeeze will move up and only 1 out of 5 will do good to great. 4 out of 5 will realize something's deeply wrong. PB
----
More from Robert Samuelson in The Washington Post online:
The second table shows these groups’ net worth...
The story is the same. Until 2007, net worth rose gradually. Then it crashed and fell to late 1980s or 1990s levels. Lower housing prices especially hurt.
This is the true middle-class squeeze:
People’s expectations about their living standards were set in the early 2000s, while their incomes and assets are stuck at levels 15 to 20 years earlier.
The huge gap isn’t rapidly erased, even by a revived economy. Of course, there are large variations among families.
The upper middle class and rich fared much better. In 2013, the median income of the richest 10 percent was $229,600, says the SCF.
Although that was 1 percent below its 2007 peak, it was 22 percent above its 1989 level.
----
Link: http://www.washingtonpost.com/opinions/robert-samuelson-the-roughed-up-american/2014/09/14/
George W. Obama's economy has separated the middle class.
Soon, in a few years, the squeeze will move up and only 1 out of 5 will do good to great. 4 out of 5 will realize something's deeply wrong. PB
----
More from Robert Samuelson in The Washington Post online:
The second table shows these groups’ net worth...
The story is the same. Until 2007, net worth rose gradually. Then it crashed and fell to late 1980s or 1990s levels. Lower housing prices especially hurt.
| Net Worth | ||
| Median Family | Solid Middle Class | |
| 1989 | $84,800 | $120,200 |
| 2007 | $135,400 | $231,100 |
| 2013 | $81,200 | $159,200 |
This is the true middle-class squeeze:
People’s expectations about their living standards were set in the early 2000s, while their incomes and assets are stuck at levels 15 to 20 years earlier.
The huge gap isn’t rapidly erased, even by a revived economy. Of course, there are large variations among families.
The upper middle class and rich fared much better. In 2013, the median income of the richest 10 percent was $229,600, says the SCF.
Although that was 1 percent below its 2007 peak, it was 22 percent above its 1989 level.
----
Link: http://www.washingtonpost.com/opinions/robert-samuelson-the-roughed-up-american/2014/09/14/
Monday, September 15, 2014
Americans roughed up by the economy - Income falling back to the 1980s and early 1990s
Robert Samuelson in the Washington Post online:
We have a peculiar prosperity. The economy is escaping the confines of the Great Recession; auto sales now exceed 16 million annually, the highest since 2006.
But people don’t feel reassured. They’ve lost confidence in the future.
Americans feel roughed up by the economy, and their fears aren’t fading quickly...
They’re still suffering the aftershocks in lower incomes and wealth, as the tables below show.
The first table provides annual pretax income from wages, interest and the like. The middle column shows the income of the median family, the one exactly in the middle of all families.
The column on the right shows the income of...“the solid middle class.”
If the population is divided into fifths, they’re the second fifth from the top: poorer than the richest 20 percent of Americans but richer than the other 60 percent.
Though comfortable, they’re not awash in money.
From 1989 to 2007, income rose 14 percent for the median family and 15 percent for the solid middle family.
But the numbers’ second message is devastating: The Great Recession hurled incomes all the way back to the late 1980s and early 1990s...
----
Link: http://www.washingtonpost.com/opinions/robert-samuelson-the-roughed-up-american/2014/09/14/
We have a peculiar prosperity. The economy is escaping the confines of the Great Recession; auto sales now exceed 16 million annually, the highest since 2006.
But people don’t feel reassured. They’ve lost confidence in the future.
Americans feel roughed up by the economy, and their fears aren’t fading quickly...
They’re still suffering the aftershocks in lower incomes and wealth, as the tables below show.
The first table provides annual pretax income from wages, interest and the like. The middle column shows the income of the median family, the one exactly in the middle of all families.
The column on the right shows the income of...“the solid middle class.”
If the population is divided into fifths, they’re the second fifth from the top: poorer than the richest 20 percent of Americans but richer than the other 60 percent.
Though comfortable, they’re not awash in money.
| Family Income | ||
| Median Family | Solid Middle Class | |
| 1989 | $46,500 | $73,500 |
| 2007 | $53,100 | $84,300 |
| 2013 | $46,700 | $76,400 |
From 1989 to 2007, income rose 14 percent for the median family and 15 percent for the solid middle family.
But the numbers’ second message is devastating: The Great Recession hurled incomes all the way back to the late 1980s and early 1990s...
----
Link: http://www.washingtonpost.com/opinions/robert-samuelson-the-roughed-up-american/2014/09/14/
Sunday, September 14, 2014
ISIS: $3 million/day from Oil smuggling, Extortion, Theft, Human trafficking - when's the HBO series?
Entrepreneurial, ain't they?
Human trafficking - isn't that slavery?
Where, where, anywhere in the world, are there protests in the streets? PB
----
From CNBC.com:
Islamic State militants, who once relied on wealthy Persian Gulf donors for money, have become a self-sustaining financial juggernaut, earning more than $3 million a day from oil smuggling, human trafficking, theft and extortion, according to U.S. intelligence officials and private experts.
The extremist group's resources exceed that "of any other terrorist group in history," said a U.S. intelligence official...
The Islamic State group has taken over large sections of Syria and Iraq, and controls as many as 11 oil fields in both countries, analysts say.
It is selling oil and other goods through generations-old smuggling networks under the noses of some of the same governments it is fighting: Kurdish-controlled northern Iraq, Turkey and Jordan...
The group also has earned hundreds of millions of dollars from smuggling antiquities out of Iraq to be sold in Turkey, al-Khatteeb said, and millions more from human trafficking by selling women and children as sex slaves...
----
Link:http://www.cnbc.com/id/101998730?
Human trafficking - isn't that slavery?
Where, where, anywhere in the world, are there protests in the streets? PB
----
From CNBC.com:
Islamic State militants, who once relied on wealthy Persian Gulf donors for money, have become a self-sustaining financial juggernaut, earning more than $3 million a day from oil smuggling, human trafficking, theft and extortion, according to U.S. intelligence officials and private experts.
The extremist group's resources exceed that "of any other terrorist group in history," said a U.S. intelligence official...
The Islamic State group has taken over large sections of Syria and Iraq, and controls as many as 11 oil fields in both countries, analysts say.
It is selling oil and other goods through generations-old smuggling networks under the noses of some of the same governments it is fighting: Kurdish-controlled northern Iraq, Turkey and Jordan...
The group also has earned hundreds of millions of dollars from smuggling antiquities out of Iraq to be sold in Turkey, al-Khatteeb said, and millions more from human trafficking by selling women and children as sex slaves...
----
Link:http://www.cnbc.com/id/101998730?
Volunteering is Big Business - who knew?
What is the value of your time?
When you get paid for the work you do, what you earn can be measured.
But what is the worth of what you do when you don't get paid with money?
You can ask a mom, a dad, or a volunteer to tell you the worth of what they do. Beyond saying 'priceless' or 'not enough,' each one likely doesn't have an economic number to give you.
Also, if a whole bunch of people volunteer to do the same thing, what is that worth? It seems we know this already, but all that time is worth a lot. PB
----
From the Wall Street Journal online:
Volunteering—unpaid, non-compulsory work —is big business.
Andrew Haldane, the Bank of England’s chief economist, has taken a stab at estimating just how big and his conclusions are striking.
Mr. Haldane helped found an outfit in the U.K. called Pro Bono Economics that matches community-minded economists with charities seeking to measure the impact of their actions...
Total up the global economy’s army of volunteers and the workforce of “Volunteerland” is about 971 million people, second only to China’s 1 billion workers.
So how much is such activity worth to an economy?
Since it is hard to measure what volunteers produce, Mr. Haldane estimates their contribution by working out the value of how much they put in—their labor.
Volunteers’ contribution to the U.K. economy could be anywhere up to £50 billion ($81 billion), he says, the equivalent of the annual output of Britain’s energy sector.
Volunteering has other economic benefits, Mr. Haldane argues. Workers who volunteer in their spare time tend to be happier and more productive. Volunteering may also enhance employees’ skills and boost their attractiveness to potential employers.
Some types of volunteering aid the economy by preventing harm: one Pro Bono Economics study found that a charity that helped young homeless people find work and in some cases get off drugs generated a return to society of £2.40 for every £1 invested.
Volunteering is “a well-hidden jewel” in the global economy, Mr. Haldane says...
----
Link: http://blogs.wsj.com/economics/2014/09/12/volunteerland-is-bigger-than-china-says-boes-haldane/?
When you get paid for the work you do, what you earn can be measured.
But what is the worth of what you do when you don't get paid with money?
You can ask a mom, a dad, or a volunteer to tell you the worth of what they do. Beyond saying 'priceless' or 'not enough,' each one likely doesn't have an economic number to give you.
Also, if a whole bunch of people volunteer to do the same thing, what is that worth? It seems we know this already, but all that time is worth a lot. PB
----
From the Wall Street Journal online:
Volunteering—unpaid, non-compulsory work —is big business.
Andrew Haldane, the Bank of England’s chief economist, has taken a stab at estimating just how big and his conclusions are striking.
Mr. Haldane helped found an outfit in the U.K. called Pro Bono Economics that matches community-minded economists with charities seeking to measure the impact of their actions...
Total up the global economy’s army of volunteers and the workforce of “Volunteerland” is about 971 million people, second only to China’s 1 billion workers.
So how much is such activity worth to an economy?
Since it is hard to measure what volunteers produce, Mr. Haldane estimates their contribution by working out the value of how much they put in—their labor.
Volunteers’ contribution to the U.K. economy could be anywhere up to £50 billion ($81 billion), he says, the equivalent of the annual output of Britain’s energy sector.
Volunteering has other economic benefits, Mr. Haldane argues. Workers who volunteer in their spare time tend to be happier and more productive. Volunteering may also enhance employees’ skills and boost their attractiveness to potential employers.
Some types of volunteering aid the economy by preventing harm: one Pro Bono Economics study found that a charity that helped young homeless people find work and in some cases get off drugs generated a return to society of £2.40 for every £1 invested.
Volunteering is “a well-hidden jewel” in the global economy, Mr. Haldane says...
----
Link: http://blogs.wsj.com/economics/2014/09/12/volunteerland-is-bigger-than-china-says-boes-haldane/?
Thursday, September 11, 2014
Life Keepers™ - another example how our approach works best for investors
This writer wrote a book 10 years ago, but couldn't find a publisher to publish it. So he took his message to individual investors one at a time.
The book was titled Life Keepers™ and it basically explained how to buy the highest quality at the lowest costs - and simply keep those kind of investments for life.
Keep it for life - that's the reason for the name "Life Keepers™."
So here's a recent story that explains why Life Keepers™ is the smart, reliable, and easiest approach you can use as an investor. PB
----
From BusinessInsider.com:
On this week's Masters in Business program on Bloomberg Radio, Barry Ritholtz talks with James O'Shaughnessy of O'Shaughnessy Asset Management.
Ritholtz and O'Shaughnessy spend much of their discussion talking about the ways people screw themselves when investing, because nothing gets in the way of returns quite like someone who thinks they have a great idea.
O'Shaughnessy discusses a number of interesting analyses he has done with regard to the length of holding periods (spoiler: the shorter you hold a stock, the more likely you are to lose money) among other things.
But O'Shaughnessy relays one anecdote from an employee who recently joined his firm that really makes one's head spin.
O'Shaughnessy: "Fidelity had done a study as to which accounts had done the best at Fidelity. And what they found was..."
Ritholtz: "They were dead."
O'Shaughnessy: "...No, that's close though! They were the accounts of people who forgot they had an account at Fidelity."
There are numerous studies that explain why this happens. And they almost always come down to the fact that our minds work against us.
Because of our behavioral biases, we often find ourselves buying high and selling low.
Ritholtz also follows with some of his experiences in estate planning, where a family fighting over some inherited assets might not touch them for say 10 or 20 years while they work out the problem, and later find that those 10 or 20 years are the best period of performance....
----
http://www.businessinsider.com/forgetful-investors-performed-best-2014-9
The book was titled Life Keepers™ and it basically explained how to buy the highest quality at the lowest costs - and simply keep those kind of investments for life.
Keep it for life - that's the reason for the name "Life Keepers™."
So here's a recent story that explains why Life Keepers™ is the smart, reliable, and easiest approach you can use as an investor. PB
----
From BusinessInsider.com:
On this week's Masters in Business program on Bloomberg Radio, Barry Ritholtz talks with James O'Shaughnessy of O'Shaughnessy Asset Management.
Ritholtz and O'Shaughnessy spend much of their discussion talking about the ways people screw themselves when investing, because nothing gets in the way of returns quite like someone who thinks they have a great idea.
O'Shaughnessy discusses a number of interesting analyses he has done with regard to the length of holding periods (spoiler: the shorter you hold a stock, the more likely you are to lose money) among other things.
But O'Shaughnessy relays one anecdote from an employee who recently joined his firm that really makes one's head spin.
O'Shaughnessy: "Fidelity had done a study as to which accounts had done the best at Fidelity. And what they found was..."
Ritholtz: "They were dead."
O'Shaughnessy: "...No, that's close though! They were the accounts of people who forgot they had an account at Fidelity."
There are numerous studies that explain why this happens. And they almost always come down to the fact that our minds work against us.
Because of our behavioral biases, we often find ourselves buying high and selling low.
Ritholtz also follows with some of his experiences in estate planning, where a family fighting over some inherited assets might not touch them for say 10 or 20 years while they work out the problem, and later find that those 10 or 20 years are the best period of performance....
----
http://www.businessinsider.com/forgetful-investors-performed-best-2014-9
Wednesday, September 10, 2014
Adult Diapers UP - Baby Diapers DOWN
Oh, to age gracefully...and knowing you're not alone. PB
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From the Wall Street Journal online:
Procter & Gamble Co. is getting back into a business it exited more than a decade ago—making products for adults suffering from incontinence—as it takes aim at the growing ranks of aging Americans.
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Link: http://blogs.wsj.com/corporate-intelligence/2014/07/17/this-is-what-an-aging-population-looks-like/
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From the Wall Street Journal online:
Procter & Gamble Co. is getting back into a business it exited more than a decade ago—making products for adults suffering from incontinence—as it takes aim at the growing ranks of aging Americans.
Link: http://blogs.wsj.com/corporate-intelligence/2014/07/17/this-is-what-an-aging-population-looks-like/
Sunday, September 7, 2014
Where are the jobs? Where is the wage growth?
Those are the correct questions to ask. PB
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From James Pethokoukis at AEI-ideas.org:
This was not a good jobs report. Certainly not one that suggests a shift into a higher growth gear.
The Two Percent-ish economy crawls on. The US economy added 142,000 jobs in August — much less than 225,000 expected — as the unemployment rate ticked down to 6.1%.
But the jobless rate fell only because the labor force shrank by 64,000, notes economist Paul Ashworth of Capital Economics.
The alternative household survey found employment increased by only 16,000 last month.
... And consider: There are just 1.2 million more private jobs today than January 2008 despite 15.6 million more non-jailed, non-military adults...
The anemic economy is generating jobs at the top and bottom, not so much in the middle. “Average is over” as economist Tyler Cowen has put it
And data yesterday from the Federal Reserve show that while income rose by 10% for the most affluent 10% of American families in 2010 through 2013, incomes were flat or falling for everybody else.
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Link: http://www.aei-ideas.org/2014/09/the-august-jobs-report-where-are-the-jobs-where-is-the-wage-growth/
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From James Pethokoukis at AEI-ideas.org:
This was not a good jobs report. Certainly not one that suggests a shift into a higher growth gear.
The Two Percent-ish economy crawls on. The US economy added 142,000 jobs in August — much less than 225,000 expected — as the unemployment rate ticked down to 6.1%.
But the jobless rate fell only because the labor force shrank by 64,000, notes economist Paul Ashworth of Capital Economics.
The alternative household survey found employment increased by only 16,000 last month.
... And consider: There are just 1.2 million more private jobs today than January 2008 despite 15.6 million more non-jailed, non-military adults...
The anemic economy is generating jobs at the top and bottom, not so much in the middle. “Average is over” as economist Tyler Cowen has put it
And data yesterday from the Federal Reserve show that while income rose by 10% for the most affluent 10% of American families in 2010 through 2013, incomes were flat or falling for everybody else.
----
Link: http://www.aei-ideas.org/2014/09/the-august-jobs-report-where-are-the-jobs-where-is-the-wage-growth/
Friday, September 5, 2014
One out of 3 workers works as a freelancer
We have a fractured economy and a fractured work force.
Deep structural changes have occurred in the labor markets and these changes will stay with us.
Companies are slow to hire; temps and part timers continue to grow; and new business formation falls. These deep problems aren't being addressed.
In this economy the wealthy have done very well. Aren't Democrats in charge of policy?
What is happening to the middle class? The answer is far from showy complaints that part-time burger flippers should get $15 an hour.
If you are not protected by government, like unions are rewarded, or if you don't possess in-demand skills, you are very vulnerable. PB
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From the Wall Street Journal online:
Roughly one in three U.S. workers is now a freelancer.
Fifty-three million Americans, or 34% of the nation’s workforce, qualify as freelancers, according to a new report from the Freelancers Union, a nonprofit organization, and Elance-oDesk Inc., a company that provides platforms for freelancers to find work.
These individuals include independent contractors, temps, and moonlighters, among others.
The figures provide an update of sorts to a 2006 report from the U.S. General Accountability Office, which found that approximately 31% of American workers were employed on some kind of contingent basis, such as freelancers, part-timers or temps.
That was the last time the government attempted a comprehensive survey of this growing segment of the labor force...
Companies, eager to lower payroll costs and take advantage of a more flexible workforce, are relying more on contingent labor...
----
Link: http://blogs.wsj.com/atwork/2014/09/04/one-in-three-u-s-workers-is-a-freelancer/?mod=e2tw
Deep structural changes have occurred in the labor markets and these changes will stay with us.
Companies are slow to hire; temps and part timers continue to grow; and new business formation falls. These deep problems aren't being addressed.
In this economy the wealthy have done very well. Aren't Democrats in charge of policy?
What is happening to the middle class? The answer is far from showy complaints that part-time burger flippers should get $15 an hour.
If you are not protected by government, like unions are rewarded, or if you don't possess in-demand skills, you are very vulnerable. PB
----
From the Wall Street Journal online:
Roughly one in three U.S. workers is now a freelancer.
Fifty-three million Americans, or 34% of the nation’s workforce, qualify as freelancers, according to a new report from the Freelancers Union, a nonprofit organization, and Elance-oDesk Inc., a company that provides platforms for freelancers to find work.
These individuals include independent contractors, temps, and moonlighters, among others.
The figures provide an update of sorts to a 2006 report from the U.S. General Accountability Office, which found that approximately 31% of American workers were employed on some kind of contingent basis, such as freelancers, part-timers or temps.
That was the last time the government attempted a comprehensive survey of this growing segment of the labor force...
Companies, eager to lower payroll costs and take advantage of a more flexible workforce, are relying more on contingent labor...
----
Link: http://blogs.wsj.com/atwork/2014/09/04/one-in-three-u-s-workers-is-a-freelancer/?mod=e2tw
Tuesday, September 2, 2014
Social Security Disability: Big Commission Lawyers earn $1 Billion Each Year to turn Workers into Non-Workers
There is something insidious about people not working.
What? Lawyers who get paid by crony judges who manipulate the S.S. Disability system to win huge amounts of money for those lawyers.
The compensation amounts to $1 Billion every year.
Thank you Attorneys and their Judicial Patrons on the Bench. PB
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From Barrons.com:
The job market has made a comeback over the past year, but the American labor force hasn't, and the prospects don't look good.
Work seems to be on the wane in the U.S., with worrisome consequences for economic growth.
While the unemployment rate slipped to 6.1% in June -- its lowest level in six years -- the percentage of adult American workers who are actually in the workforce is at its lowest level in 36 years, with no rebound in sight.
No one in government is facing up to the severity of the problem...
[One huge problem is the growing size of workers getting Social Security Disability Income payments and never working again.]
"There is a very powerful kind of for-profit advocacy component to getting people onto SSDI," says Autor.
Law firms that represent claimants are given a percentage of the take, much like personal-injury lawyers.
That might seem reasonable, but the sums involved are large enough to create a special-interest group that has a stake in perpetuating the system.
As Autor puts it, "The Social Security Administration each year pays more than $1 billion directly to attorneys that prevail against it on behalf of claimants."
----
Link: http://online.barrons.com/home-page
What? Lawyers who get paid by crony judges who manipulate the S.S. Disability system to win huge amounts of money for those lawyers.
The compensation amounts to $1 Billion every year.
Thank you Attorneys and their Judicial Patrons on the Bench. PB
----
From Barrons.com:
The job market has made a comeback over the past year, but the American labor force hasn't, and the prospects don't look good.
Work seems to be on the wane in the U.S., with worrisome consequences for economic growth.
While the unemployment rate slipped to 6.1% in June -- its lowest level in six years -- the percentage of adult American workers who are actually in the workforce is at its lowest level in 36 years, with no rebound in sight.
No one in government is facing up to the severity of the problem...
[One huge problem is the growing size of workers getting Social Security Disability Income payments and never working again.]
"There is a very powerful kind of for-profit advocacy component to getting people onto SSDI," says Autor.
Law firms that represent claimants are given a percentage of the take, much like personal-injury lawyers.
That might seem reasonable, but the sums involved are large enough to create a special-interest group that has a stake in perpetuating the system.
As Autor puts it, "The Social Security Administration each year pays more than $1 billion directly to attorneys that prevail against it on behalf of claimants."
----
Link: http://online.barrons.com/home-page
Monday, September 1, 2014
Labor Day is really just a Celebration of Government Workers
Ahh, Labor Day...
From Investors.com:
... a lot has changed for organized labor since Labor Day was federally recognized 120 years ago.
The then burgeoning movement has gained massive political power and influence across the century, only to see it decline precipitously to a point where today only 6.7% of the private-sector workforce belongs to labor unions.
In fact, more union members are public employees than in the private sector.
This transition of labor union membership from private sector to public employee dominated has massive implications for the future.
A public-sector oriented union's focus will naturally be on helping politicians who support expanding the size and scope of government, even at the expense of the private-sector workforce.
This conversion can be seen in Big Labor's political fealty to the Democratic Party and their bigger and bigger government mantra.
Today's Big Labor supports politicians who are committed to destroying unionized mining jobs through the EPA, scoff at the value of more than 10,000 union jobs created by building the Keystone XL pipeline, and actively push for amnesty for illegal aliens who can only drive down the cost of labor, hurting wages.
The days of a Jimmy Hoffa's Teamsters Union endorsing Richard Nixon seem far away.
Labor leaders are more interested today in creating the low-hanging fruit of public employee union jobs, rather than confronting far- left politicians who are killing private-sector unions through their policies.
While the United Mine Workers of America may have balked at endorsing President Obama in 2012 after his disastrous policies targeted much of their workforce for extinction, their former president, Richard Trumka, in his new role as head of the AFL-CIO, continues to play the role of presidential cheerleader.
Sure, he talks of being disgruntled with some of Obama's economic policies. But when push comes to shove, he'll encourage his members to pull the lever for D.
Construction unions like the International Brotherhood of Electrical Workers (IBEW) give lip service to supporting private-sector jobs through projects like building the Keystone XL pipeline.
Yet in the lead-up to the 2012 election for president, the union wrote a scathing attack on Republican nominee Mitt Romney, based on Republican governors pushing measures that reined in public-employee union power in their states.
While the piece claimed to not tell their members how to vote, it left no doubt about whom the union supported — the very same guy whose administration has thrown its collective weight against the very kind of mass construction project that gives their membership work.
And that tells the whole story...
----
Link: http://news.investors.com/ibd-editorials-on-the-right/082914-715382-labor-day-is-not-about-private-sector-union-workers-anymore.htm
- Put another beer brat on the grill
- Look forward to week 2 of College Football
- Think about what Middle Class America really means. PB
From Investors.com:
... a lot has changed for organized labor since Labor Day was federally recognized 120 years ago.
The then burgeoning movement has gained massive political power and influence across the century, only to see it decline precipitously to a point where today only 6.7% of the private-sector workforce belongs to labor unions.
In fact, more union members are public employees than in the private sector.
This transition of labor union membership from private sector to public employee dominated has massive implications for the future.
A public-sector oriented union's focus will naturally be on helping politicians who support expanding the size and scope of government, even at the expense of the private-sector workforce.
This conversion can be seen in Big Labor's political fealty to the Democratic Party and their bigger and bigger government mantra.
Today's Big Labor supports politicians who are committed to destroying unionized mining jobs through the EPA, scoff at the value of more than 10,000 union jobs created by building the Keystone XL pipeline, and actively push for amnesty for illegal aliens who can only drive down the cost of labor, hurting wages.
The days of a Jimmy Hoffa's Teamsters Union endorsing Richard Nixon seem far away.
Labor leaders are more interested today in creating the low-hanging fruit of public employee union jobs, rather than confronting far- left politicians who are killing private-sector unions through their policies.
While the United Mine Workers of America may have balked at endorsing President Obama in 2012 after his disastrous policies targeted much of their workforce for extinction, their former president, Richard Trumka, in his new role as head of the AFL-CIO, continues to play the role of presidential cheerleader.
Sure, he talks of being disgruntled with some of Obama's economic policies. But when push comes to shove, he'll encourage his members to pull the lever for D.
Construction unions like the International Brotherhood of Electrical Workers (IBEW) give lip service to supporting private-sector jobs through projects like building the Keystone XL pipeline.
Yet in the lead-up to the 2012 election for president, the union wrote a scathing attack on Republican nominee Mitt Romney, based on Republican governors pushing measures that reined in public-employee union power in their states.
While the piece claimed to not tell their members how to vote, it left no doubt about whom the union supported — the very same guy whose administration has thrown its collective weight against the very kind of mass construction project that gives their membership work.
And that tells the whole story...
----
Link: http://news.investors.com/ibd-editorials-on-the-right/082914-715382-labor-day-is-not-about-private-sector-union-workers-anymore.htm
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