Category Archive

Today I reached page 51 in the highly regarded personal finance book The Wealthy Barber, abruptly closed the book, and hung my head in sadness. Until this point I really liked the writer’s style and it seemed to be an interesting take on explaining investing to beginners. All was well until this passage on picking mutual funds: “Make sure that if a fund has solid rates of return, the manager who created them is still there. You’re not buying past performance numbers; you’re buying a manager’s expertise. If fund ABC averaged fifteen percent a year under the guidance of Jack Smith, but Jack Smith left, stay away from ABC. You can’t be sure what you’re getting.” First, picking actively managed funds is a …

Nerd alert: read on only if fully caffeinated — What if I told you that people who comb their hair are much more confident about the appearance of their hair, compared to bald people? You’d probably say that’s a pretty stupid comparison. I hope you’d tell me that to feel confident about one’s hair, one must have hair in the first place. (No offense to bald people – I am slowly but surely joining your club) It turns out that many people in the financial world treat stock buybacks with similar logic. A very popular analysis is that companies with buyback programs have their shares perform better than companies who don’t repurchase their shares. In response to this logic, my answer is, if you’ll allow: no …

  The FOMC can ____________________________________, and ____________________________________, but they can’t ____________________________________. Try all three combinations! It works.      

One of the worst things the financial industry does is lead the average “retail” investor to believe they can become the next Warren Buffett if they just get the right trading platform, read the best research reports or pay attention to the right trends. If you spend any time watching financial television, you’ve come across some of the worst offenders: commercials. Without further ado, here are my picks for the worst three of the year. #3 – MFS Investment Management – “Active Management” This one is a buzzword bingo game of epic proportions. “Protect capital long-term.” “Global insights.” “Calculated risks.” “Outperform.” They literally say “active management” SIX times in 30 seconds. We have futuristic touch screens embedded in desks, a massive …