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And so the pursuit of active management magicians goes on. Mr. Wellington again delights us with his insightful take on Mr. Buffett. I think the most profound concept he offers is that any advantage Mr. Buffett has is already in the price. So investors in today's Berkshire Hathaway have no advantage at all because the share price has already been bid up to reflect the Warren magic... -Christopher Deconstructing Berkshire Hathaway Weston Wellington, Vice President, Dimensional Fund Advisors Berkshire Hathaway released its 2010 annual report last weekend, including the letter to shareholders from Chairman Warren Buffett that is always eagerly... Continue reading
Posted Mar 3, 2011 at OnCubic
For those of you (or those with friends/family) wondering what process to use when choosing a wealth management advisor, the National Association of Personal Financial Advisors has released this helpful guide. - Christopher Check out NAPFA's new Pursuit of a Financial Advisor Field Guide, which will walk you through all tof the steps to finding qualified financial advice. Continue reading
Posted Feb 21, 2011 at OnCubic
I get asked this question all the time. "My realtor says I need to do all these things before I sell", people say. Well, as it turns out there is only one thing with a positive return on investment as far as remodeling goes... Ready: changing the front door has a 2% return. If you subtract the value of your time... well you do the math. For every other home project, you are better off lowering your price by the amount of the remodel. Realtors, of course, want you to invest in the property to raise the price, and the... Continue reading
Posted Dec 28, 2010 at OnCubic
For those of you who are going to spend your time finding mis-priced securities so you can beat the market like a "mini Warren Buffett", give this Wired Magazine story a read. Computers are taking information off the news wires and impacting prices in fractions of a second. Deep Blue has long ago beaten Gary too. - Christopher Algorithms Take Control of Wall Street Last spring, Dow Jones launched a new service called Lexicon, which sends real-time financial news to professional investors. This in itself is not surprising. The company behind The Wall Street Journal and Dow Jones Newswires... Continue reading
Posted Dec 28, 2010 at OnCubic
Here the "Warren Buffett" of bonds, Bill Gross of Pimco, decides to chase equity returns. Folks, I don't know about you but I expect one the most famous active managers to do better than this. NOW that the global equity market has essentially increased 100%, he's going to go into equities, which he's not known for. This is classic "return chasing" behavior. I agree that bonds don't look like the place to be, but are we paying Gross, an asset class specialist, to allocate our portfolios for us? Those of you with heavy bond portfolios may wish to take note... Continue reading
Posted Dec 17, 2010 at OnCubic
In this video, Dartmouth's Dr. Ken French discusses what kinds of returns we can expect during times of slow GDP growth... if that's what we have in the future. I think the answer will surprise you. - Christopher Continue reading
Posted Dec 15, 2010 at OnCubic
Great piece about a former Goldman banker, currently suffering from cancer, admitting it was all a lie. - Christopher A Dying Banker’s Last Instructions New York Times There are no one-handed push-ups or headstands on the yoga mat for Gordon Murray anymore. No more playing bridge, either — he jokingly accuses his brain surgeon of robbing him of the gray matter that contained all the bidding strategy. But when Mr. Murray, a former bond salesman for Goldman Sachs who rose to the managing director level at both Lehman Brothers and Credit Suisse First Boston, decided to cease all treatment five... Continue reading
Posted Dec 6, 2010 at OnCubic
All of a sudden, it seems like everybody in the wealth management world is talking about Roth IRAs and Roth conversions. In fact, an article in Financial Planning magazine--one of the trade magazines in our world--recently proclaimed 2010 "The Year of the Roth." What's the big deal? Roth IRAs are interesting to professionals for several reasons. With traditional IRAs (and qualified plans like 401(k)s), the money goes in untaxed, and you pay ordinary income taxes whenever you take money out of the account--which might be years in the future. The Roth reverses this; your contribution is made with after-tax dollars,... Continue reading
Posted Nov 10, 2010 at OnCubic
Below is a story from the WSJ that perfectly illustrates one of the major problems with active investment management (trying to beat the market by foretelling the future). The story focuses on DE Shaw, a firm that, since its inception in 1988, focused on letting a computer decide when to buy and sell securities. I guess they had good (or lucky) results prior to 2006. All of the sudden, in 2006, the managers decided to abandon the computer-as-crystal-ball concept and invest in raw land in New Mexico?????? What does a firm who purports to have a computer that knows the... Continue reading
Posted Oct 13, 2010 at OnCubic
Emerging markets play an important role in a well diversified portfolio. Risks exist when investing anywhere and especially in emerging markets where higher perceived political risk is an important factor. Volatility can be high, but the potential for return relative to risks and the possibility of reducing correlation (and thus risk) of an overall portfolio, can be an added benefit. What is an emerging market? The term was coined by Antoine W. Van Agtmael of the International Finance Corporation of the World Bank in 1981. It is generally defined as an economy with low to middle per capita income. These... Continue reading
Posted Oct 5, 2010 at OnCubic
If you run a business and have a retirement plan, you are most likely a fiduciary with responsibilities that include: Acting solely in the interest of plan participants and their beneficiaries and with the exclusive purpose of providing benefits to them; Carrying out their duties prudently; Following the plan documents (unless inconsistent with ERISA); Diversifying plan investments; and Paying only reasonable plan expenses. As a fiduciary there is also potential liability. "Fiduciaries who do not follow the basic standards of conduct may be personally liable to restore any losses to the plan, or to restore any profits made through improper... Continue reading
Posted Sep 9, 2010 at OnCubic
I edited Larry Kudlow's blog a bit to de-politicize it for my purposes. I thought what Mr. Kudlow had to say about the economy was spot on so I'd like to share it with you. - Christopher The Business of America Is Business- Larry Kudlow Corporate profits are at all-time highs and bond rates in the Treasury market are virtually at record lows. That’s a good combination for stocks, and it helped trigger a 255 point rally in Wednesday’s trading. What’s more, a surprisingly positive read on the ISM August manufacturing report delivered a strong blow to the double-dip recession... Continue reading
Posted Sep 3, 2010 at OnCubic
I love this old Merrill Lynch ad offering Wall St. money to Americans. You can just feel the used-car-salesmanish tone of the pitchman. - Christopher Continue reading
Posted Aug 18, 2010 at OnCubic
A ruling by a judge, who in one case said Edison International did ‘substantial’ harm to employees by not negotiating lower fees from the firm running the 401(k) plan, may bolster other lawsuits. By Walter Hamilton, Los Angeles Times – July 29, 2010 For decades, high fees have quietly but steadily eaten away at the value of 401(k) retirement plans. Now employees are making headway in legal battles to force employers to lower costs. Employees of Edison International won a big victory this month when a federal judge ruled that the company’s 401(k) fees were excessive and said employees were... Continue reading
Posted Aug 4, 2010 at OnCubic
Report Entry: Tuesday July 6th, 2010 A definition of perspective is as follows: “The appearance of things relative to one another as determined by their distance from the viewer.” Volatility in the market has more than doubled since mid-April as measured by the VIX index (measures the volatility of the S&P 500). I’m sure that was something most investors knew without looking at VIX. According to the Bureau of Economic Analysis, real gross domestic product the output of goods and services increased at an annual rate of 2.7 percent in the first quarter of 2010. In the fourth quarter of... Continue reading
Posted Jul 29, 2010 at OnCubic
This morning I woke up thinking about some emails I needed to get out, then scanned the Wall Street Journal. Oil spills, market volatility, political scandals, iPads, and military maneuverings hovered on the computer screen daring me to crawl into my hole. I remembered how all this news can be daunting especially for clients who have put their trust in all of us here at Trovena, to help them with their lives. My next thought was that I was sure everyone could use a break from all this and should have a nice three day weekend to enjoy. What to... Continue reading
Posted Jul 29, 2010 at OnCubic
I read something the other day that reminded me about life's reality; Life is more 'Learn by Doing', than 'Learn by Thinking'. Dr. Carl Sheeler, a San Diego Business Valuation Expert with Allison Appraisals, and Russ Davis, San Diego Daily Transcripts Top Attorney Corporate Law (and runner up Employment Law) for 2009 with San Diego Business Law, are two examples of professionals that have embraced this golden rule. Just last year, the three of us decided to start an organization to help others help themselves by creating a business organization; Strategic Trusted Advisors Roundtable (STAR). I believe this group is... Continue reading
Posted Jul 29, 2010 at OnCubic
This will be interesting to watch. - Christopher Deaths Highlight Estate Tax Question (Dow Jones) Estate-tax questions are mounting along with the ranks of very wealthy people who have died in 2010 during the one-year gap in the federal tax. The recent death of Texas billionaire Dan Duncan puts a point on some of the issues, including the central one: whether Congress is growing more or less likely to impose a retroactive tax as huge estates come into play in the meantime. Duncan, who died last month at age 77, is perhaps the first billionaire to die this year. Reported... Continue reading
Posted Apr 24, 2010 at OnCubic
DFA's Weston Wellington helps put long-term compound returns in perspective. - Christopher March 31, 2010 The Millionaire Next Door The Chicago Sun-Times recently reported that Grace Groner, a long-time resident of Lake Forest, Illinois, passed away in January at age 100, leaving a $7 million bequest to her alma mater, Lake Forest College. Although Groner lived in one of the country's wealthiest communities, she hardly fit the profile of a trust-fund socialite. An orphan at age twelve, she was cared for by neighbors and attended college, earning an English degree in 1931. She went to work as a secretary for... Continue reading
Posted Apr 1, 2010 at OnCubic
Sooooooo true. Nice story by the former LA Times personal finance writer writing for MSN Money. - OnCubic Married to a Financial Basket Case? Few couples see eye to eye on every money issue, but if your spouse's spending is really out of control, simply setting up separate accounts isn't going to fix things. By Liz Pulliam Weston Jennifer tried to work things out with her spouse, a compulsive spender. They experimented with joint accounts , separate accounts and an allowance system in which each got a weekly infusion of "no questions asked" spending money.Posted using ShareThis Continue reading
Posted Mar 31, 2010 at OnCubic
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Mar 16, 2010
Watch as news is fed, in real time, into prices... Kudos to Oncubic advisor Mark Long again for finding this. Continue reading
Posted Mar 10, 2010 at OnCubic
Thanks to Mark Long for this one. What a Gem! Continue reading
Posted Mar 10, 2010 at OnCubic
I don't know if you have been shopping for residential real estate lately, but if you have, and you aren't using the Zillow or Trulia mobile apps, you are missing out. (You may also be missing out on some great deals!) Imagine pulling up in front of any home and instantly accessing photos, price history, comparable recent sales, and contact information. You can do that now on your phone as you cruise your favorite neighborhood. No more calls to realtors or printing sheets of information prior to your drive. It's all right at your fingertips. You can call the realtor... Continue reading
Posted Mar 10, 2010 at OnCubic
This is a nice article by Mr. Zweig who says that bubbles don't do much for investors but have latent benefits for the economy. The one thing I take from this is that the thing to do with any bubble asset (Be it tech stocks, real estate, or bonds perhaps) is to sell it using a systematic, disciplined re-balancing investment process. Simple as that. - Christopher Ten years ago, investors knew that technology would change the world, and they were right. But you can be 100% right about the future and end up with zero to show for it if... Continue reading
Posted Mar 10, 2010 at OnCubic