The Wallstreet Journal dispenses some advice which we like a lot:
“Investing is complex rocket science that requires professional help-at least that’s what the professionals usually say. But a strong case can be made for investors following a design principle known as KISS, which in this case stands for: Keep it simple, saver…”
Highly recommended reading - especially for the investor who is seeking peace of mind…
I just finished the bestseller “Too big too fail”, delivering a behind-the scenes and moment-by-moment account of the months between the fire sale of Bear Sterns in spring 2008 and the announcement of the biggest bailout in history in October 2008. Drawing on hundreds of hours of interviews with the key players the Author Andrew Sorkin of the New York Times was able to write a kind of real-life thriller on the struggle of overpaid bankers and overwhelmed politicans to save the financial systems, there companies, jobs and even more so their egos. A gripping book one reads with disbelief on the lack of self-awareness and competence of main players, but also a lot of amusements on how the “big” world of finance and business comes down to surreal realities in the face of disaster.
One of these hard to belive events is a check over USD 9 billion! that literally saved Morgan Stanley and the jobs of its 45.000 employees in the very last minute. Hand delivered by a Japanese delegation and picked up by a banker wearing flip-flops….
Just in case you want to spend some time during your holidays pouring over good & bad investment advice, thinking about financial Armageddon or heavenly bull markets, the (limited) wisdom of market pundits, or even read about bankers on the run, well, then have a look at the following links:
Institutional Investor is gloomy about stocks - sounds for my taste just a little bit like these “STOCKS ARE DEAD” predictions in the late 1970s….
Doug Kass’s 20 surprises for 2010 - fun to read and Doug in many cases was spot on end of 2008 with his predictions for 2009
Obituary - Legendary Value investor Chris Browne dies
Surprise - Best performing fund of the decade is from…SWEDEN
LA Times - shares with us the top-5 investing lessons of 2009, very rational
“Banker On The Run” - Why the new bonus tax makes British bankers leave London in droves. An example how punishing taxes can backfire? (from the German paper Sueddeutsche)
For the weekend I have collected a few interesting links for you who make a strong bearish case looking ahead to 2010: The Edwards strike back, The next economic bubble?, Dr. Doom vs. The Investment Biker (quite a funny piece).
In short, the story goes like this: The recession will come back vigorously next year, the market will go to new lows, US Dollar will reverse again and appreciate, carry trades playing on low and cheap Dollar will unravel. Big bloodbath all over. 1929 or 1934 redux. DEPRESSION!
But read for yourself….Next week we will present the BULL case. Yet it is up to you to draw the right conclusions, dear reader.
There has been loads of speculation why Warren Buffett has acquired the rail operator Burlington Northern (including to make a play on coal or to make it easier for his successor to run Berkshire Hathaway).
Yet in my opinion, the best analysis is that Burlington Northern is just undervalued - and at the end of the day will be worth a lot more than its stock market price reflects. Just like the old saying goes: Price is what you pay, value is what you get.
Today this interesting news release from BCG (the Boston Consulting Group, a leading strategy consulting firm) came across my desk: BCG has just released a brand new study on Global Wealth 2009.
The most interesting point is that Europe has now overtaken the US as a wealth managment centre. Measured by Assets under Management (AuM) Europe is leading with USD 32.7 trillion whereas the US has only USD 29.3 in AuM.
Another interesting finding of the study is that pressure is mounting on offshore assets. A finding that mirrors the forecasts of MyPrivateBanking research. Switzerland is still the leading offshore centre with USD 1.8 trillion in AuM (28% market share).
The BCG study is another call to arms for the wealth management industry (particularly wealth managers in offshore jurisdictions) to transform its business model in order to meet the requirements of a rapidly changing business and regulatory environment.
Attention all index investors! Today I came across a page with a very valuable list of online ETF tools. On first glance, it seems that most of the tools are focused on the US market. I will check them over the weekend and condense a list of my favourites with some European additions.
With the imprisonment of Bernie Madoff and the recovery of the stock markets it seems like that the public eye on Madoffs Ponzi scheme is going down as well. Nevertheless, for (hopefully) a long time his name will stand for a so far unprecedented fraud and therefore investors should take their lessons and understand what really happened.
For those who are interested to dig deeper I recommend the reading of the “Madoff Chronicles”, a series of rather long features (you better print them) on his rise and fall, published in Vanity Fair. It is well researched and offers profound insights on his “system” and family-business, the role of funds and banks feeding him with billions and the greed and naivety of investors. Since the articles are not written for the “Economist” they include a fair share of amusing side notes, making it fun to read (at least as long as you have not been a client).
If you like these articles you might be interested as well to learn more on the role of the biggest feeder fund in the Madoff fraud, the Fairfield Greenwich Group, which alone “entrusted” USD 7 billion of its clients money to Madoff. Finally, if you are sick of Madoff and the Upper East Side Crowd and need some sunshine check “Pirate of the Caribbean”. A feature of Allen Stanford, who managed to rise from a Texan gym owner to running the second biggest Ponzi-scheme ever. During his “big times” it looks like he certainly had a lot more fun than Madoff. Now it seems their “luck” has changed, since Stanford awaits his trial sharing his cell with ten inmates and heated by the strong Texan summer sun.
Over the last weeks there has been a raging battle whether Goldman Sachs is to blame as the main culprit for causing the financial crisis. It was Matt Taibbi, who pointed the finger towards Goldman in a long Rolling Stone magazine article. Well, Rolling Stone is not exactly renown for its insights on economic developments. Yet, Taibbi’s article created a lot of media attention, including many mainstream media as well as bloggers. The article is extremely well written, nevertheless Taibbi is dead wrong. Now, Charlie Gasparino, CNBC’s On-Air Editor, takes Taibbi’s argument apart. It is worthwhile to read how many false statements of facts Taibbi has made about Goldman and about the way financial markets work. It is a great example how uneducated our media (mainstream and online) still are in financial matters. And this might be exactly the reason why bubbles build up and go undetected for such a long time.
