Let me make my final blog post for 2011 an upbeat assessment of where we might be headed. My optimism stems from a fascinating chart I came across in a financial industry publication (Nick Murray’s Interactive, Jan. 2010). Based on statistics compiled by Intrinsic Research, the chart looks at the stocks that make up the [...]
How does $1.2 billion get misplaced at a brokerage firm? And more importantly, can it happen to your brokerage account? The $1.2 billion figure is the amount that somehow went missing from MF Global, the once little-known firm helmed by former senator, former NJ governor, former Goldman Sachs chief, Jon Corzine. He says he is [...]
In this article in Financial Advisor, we learned that a few major mutual fund companies are asking the SEC to back off on its proposal to restrict the use of derivatives in traditional mutual funds. “Any set of mechanical rules cannot take account of the diversity of derivatives and the multiplicity of ways they may [...]
Much as I hate to embrace clichés, when it comes to stock market volatility it does appear that we better get used to “a new normal.” As a recent New York Times article showed, it’s not your imagination—the stock market is more jumpy than ever. Moves of three or four percent, up or down, used [...]
Some of our peers in the financial industry have found a way to advertise that they “beat the market” without actually doing so. On 6/4/11, Wall Street Journal columnist Jason Zweig wrote an eye-opening piece about this topic. Basically, he explained how some investment advisors make their track record look good by comparing their results [...]
In general, financial journalists at the major newspapers do a decent job. In general. But every once in a while they come to a misguided conclusion. Ron Lieber, in his New York Times column of 5/13/11, made a case that index funds should be on the menu of all 401(k) plans. Most plans do not [...]
Can the economic collapse of 2008-09 be blamed on small print? I think the evidence supports that idea. In October 2008, as the Great Recession was in full bloom, CBS’s 60 Minutes went searching for the causes of the calamity. They reported, among other things, that deep within the swirling mortgage mess were credit default [...]
(This was originally posted 3/18/11; a software glitch requires that this be re-posted.) The heart-wrenching and volatile situation in Japan has rattled the world’s stock markets. Daily headlines right now seem to exert greater influence on stock prices than the underlying fundamentals. Wild swings have become the norm, at least in the short term. In [...]
“You should have seen it coming!” Of all the things clients have said to me over the years, that one phrase stings most. In particular, I remember when it was said by one woman, a long term client. I was attending a financial conference; my staff had called my cell phone with the message that [...]
Some SEC regulations are there to protect us from doing dumb things. That’s a good thing, since the world is full of people who would take advantage of unsophisticated investors. Among the safeguards is a set a rules which allow only “accredited investors” to move into what are rightly perceived as complex investments, including so-called [...]
