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Source: Focus [via The Big Picture]
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Goldman’s Latest Market Forecast
14 Apr
«S&P 1500: That’s Goldman’s brand new end-of-year forecast for the market, representing a 13.9% increased from where things stand right now.»
RMore about the Business Insider’s Chart Of The Day here.
CEO Hunting Elephants In Zimbawe
31 Mar
Bob Parsons, founder and CEO of The Go Daddy Group, fed a village in Zimbawe earlier this month. Go Daddy’s peers are not impressed.
HT: swansontom.
The Insider: Pirate Profits
26 Mar
Description via YT:
«Somali-Canadian Mohamed Ashareh hopped a plane with his video camera in 2009, posing as a middleman for an American businessman interested in turning a profit by funding a pirate operation.»
Financial Calendar – Week 12
20 Mar
- Monday, March 21st: Existing home sales.
- Wednesday, March 23st: New home sales.
- Thursday, March 24st: Durable goods.
- Friday, March 25st: Final estimate for Q4 GDP.
Full schedule of the coming reports from Calculated Risk Blog here.
Why Natural Gas And Oil Prices Diverge
26 Feb
The natural gas market is continental, but for oil, demand is global.
Story from NY Times here.
Click x2 for a larger version
Squeezed By Food Prices
2 Feb
«The chart illustrates how the lower income groups in the U.S. really get squeezed when food and gas prices rise. In the U.S. the average annual income for the consumer units (households) measured is $62,857, where food expenditures consume a little over 10 percent of income.»
Full post from The Big Picture here.
Happy Birthday, Carlos Slim!
28 Jan
More about the world’s wealthiest persona and his business entourage on his Forbes profile here.
Even The Broken Clock Is Right Twice A Day
16 Jan
«If economists can’t predict the future, why do they always predict that the economy will grow about 4%? Because that’s what the economy’s long -term growth average is- and, therefore, that’s the prediction that gives the economists the best odds of being generally “right” (or at least not too embarrassingly wrong).»
Read more from Henry Blodget of The Business Insider – chart [via James Montier, GMO]
Index Funds Beats Active Managers
9 Jan
Random Walk by Burton Malkiel. Image via Wikipedia
Burton Malkiel, Princeton economics professor and author of the legendary book A Random Walk Down Wall Street, hasn’t changed his investment advice since the first edition in 1973:
Spread your investments among various asset classes and countries; keep fees low; and favor index funds over active managers who claim they can beat the market.
This is from a teriffic interview with Malkiel on investing - Excerpt:
«You’ve long been an advocate of index funds, but I keep hearing people say this is now a “stockpicker’s market” that favors active managers. They say the concept of buy-and-hold investing is obsolete.
I don’t think the data show that. Two-thirds to three-quarters of active managers are beaten by a low-cost index fund. And the one-third or so who may win in one year are not the ones who win in the next year. The old lessons are not dead. When you try to time the market, which many people do, you’re more likely to do it wrong than right. If you were diversified with the asset classes I recommended, you actually just about doubled your money even in this horrible lost decade.
Everybody says we know diversification doesn’t work. When all hell breaks loose—as it did in late 2007 and 2008—everything goes down together. That still doesn’t negate the idea that you’re better off being diversified. In 2008—this horrible year when everybody lost money—you made between 5 percent and 6 percent in a total bond market index.
So the key arguments of Random Walk haven’t changed. But what is new about the 10th edition of the book?
Nobody can market-time, but once a year I suggest that one rebalance. [Rebalancing is adjusting a portfolio's mix to certain preset benchmarks, often by selling assets that have gained value while buying those that have lagged.] I’ve got an increased appreciation of rebalancing and have done a lot of work on it. It won’t always give you an extra return, but in volatile markets it will keep your risk low or consistent with the [level right for you]. And in very volatile markets, it will tend to increase your returns.»
The 2011 vs 2007 recommended asset allocation is located in this post. The full Q & A can be reached over at BusinessWeek here.
Indulge In The Joy Of Stats
5 Jan
About the Joy Of Stats [via YouTube]:
Documentary which takes viewers on a rollercoaster ride through the wonderful world of statistics to explore the remarkable power thay have to change our understanding of the world, presented by superstar boffin Professor Hans Rosling, whose eye-opening, mind-expanding and funny online lectures have made him an international internet legend.
So if you have 60 minutes to spare; Enjoy!
US Debt Über Alles
18 Dec
“In terms of domestic credit market debt, the U.S. surpassed the pre-Great Depression heights by some point in the mid-noughties and just kept growing. In 2009, it was all the way up to 353% of GDP.”
Jeff Gundlach’s full presentation here > [via the Business Insider]
«Peak Facebook»
17 Dec
Mark Zuckerberg is Man Of The Year. Image by jdlasica via Flickr
From Ritholtz’ Blog The Big Picture:
“If history holds, TIME has just marked the top in the value of Facebook — at least for the foreseeable future. The Bezos cover marked the high point in Aamzon.com’s stock for the next 10 years.
Understand the psychology of why this is: By the time any phenomena reaches the editorial room meetings of a major non business publication such as Time, it is already a widely held social factor.”
Further reading here.
Deregulating Wealth
16 Dec
Via Wikipedia
According to BusinessWeek: the next two years will be the best in living memory for many wealthy Americans to shield their income and fortunes - if the new tax cuts become law.
Tax reform coverage here.
Top Ten Buzzwords To Avoid On LinkedIn
15 Dec
#1 overused expression, by country
From the LinkedIn blog:
Top 10 overused buzzwords in LinkedIn Profiles in the USA – 2010
1. Extensive experience
2. Innovative
3. Motivated
4. Results-oriented
5. Dynamic
6. Proven track record
7. Team player
8. Fast-paced
9. Problem solver
10. Entrepreneurial
More from the Forbes.com Blog here.
The Buy & Hold Vs. Trend
8 Dec
The chart above is from The Big Picture and shows 12 years of the S&P500.
“The fee-driven industry continues to push buy & hold as the investing strategy of choice. I prefer to adjust my risk exposure relative to multiple inputs, one of the major aspects of which is Trend.”
You find Ritholtz full comment here.
Competitive Insentives Matter
8 Dec
From Wired via MJ Perry:
“As well as ticketing you when you run through a speed-radar too fast, the “Speed Camera Lottery” in Sweden also notices you when you come in at or under the speed-limit. It then automatically enters you in a lottery. And here’s the really smart part: the prizes come from the fines paid by speeders.”
Average speed before the experiment: 32 km/hour
Average speed after the experiment: 25 km/hour
EU Nations Turns To Privatisation
2 Dec
Via Wikipedia
Spain and Ireland to auction off state businesses in bid to calm markets.
Coverage from the Telegraph here.
Intelligence Hierarchy
2 Dec
Here is Ritholz of The Big Picture blog’s opinion on about these four hierarchical elements:
Data: Data is the raw building blocks; it consists of raw numbers, but lack context or meaning. 1,200, 9.6%, and $170k are all piece of data.
Information: Is the application of structure or order to data, in an attempt to communicate meaning. Knowing the S&P500 is at 1,200 (up 5% YTD), Unemployment is at 9.6% (down from 11%), and GDP is 2.5% (revised from 2%) are examples.
Knowledge: An understanding of a specific subject, through experience (or education). Typically, knowledge is used in terms of a persons skills or expertise in a given area. Knowledge typically reflects an empirical, rather than intuitive, understanding. Plato referenced it as “”justified true belief.”
Wisdom: Optimum judgment, reflecting a deep understanding of people, things, events or situations. A person who has wisdom can effectively apply perception and knowledge in order to produce desired results. Comprehending objectively reality within a broader context.
I notice that some traders have a hard time discerning between different aspects of the intelligence hierarchy. They obsess about data, but get lost in it. losing the ability to create context and meaning. They have information, but they lose site of its meaning with the broader context. Even some folks with knowledge fail to apply it appropriately.
Chart from Information is Beautiful.
WSJ Markets
- Trump Sells Himself Outside the U.S.Donald Trump hasn't licensed his name for a U.S. real-estate project since before the financial downturn. But he has done so for more than a dozen real-estate developments outside the U.S.
- Traders Try to Game Oil-Price BenchmarkSome oil traders say they try to skew Platts oil-price benchmarks by offering to do small deals at a loss, with the goal of doing bigger ones at better prices.
- For Some Investors Emerging Markets Still Provide a LureSome investors are betting recent losses for emerging-market stocks, currencies and bonds will prove to be a temporary setback.
- Stocks Keep on TruckingStocks pushed to the highest levels in nearly three weeks as investors await news on whether the Federal Reserve will pull back on its stimulus measures.
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