As 2007 comes to a close, many investors prepare to enter 2008 with some trepidation regarding the outlook on the economy.Economists are widely quoted in the media predicting recession. Today's online Wall Street Journal features a video clip with the Chief Economist of Nomura Securities saying the economic activity in the first half of 2008 will...
Friday, December 28, 2007
It's time for year-end charitable contributions
It's the time of year for posting any contributions to charities and organizations working towards causes you care about. Typically, those donations must be received by the charity by December 31st in order to count towards your tax year for 2007.However, as Steven Malanga details in this article in the most recent edition of City Journal, many charitable...
Friday, December 21, 2007
Holiday Wishes
This giant sequoia (sequoiadendron giganteum) is the General Grant Tree, in Sequoia and Kings Canyon National Park. Discovered in 1862, it was named the General Grant in 1867.In 1926, President Calvin Coolidge designated it the Nation's Christmas Tree and each year since park rangers have held a ceremony at the tree on the second Sunday of December.In...
Wednesday, December 19, 2007
Anatomy of "style drift"
Previously, such as in this post, we have discussed the problem that is common to "mass-managed money" which is the fact that as they grow larger and larger, they are forced to own more and more securities -- and if they invest in equities, they are forced to own shares in larger and larger corporations.The fact is that most investors in the United...
Tuesday, December 18, 2007
A portfolio manager's perspective on Fed critiques
As we have explained several times in various posts (such as the first one on this blog), our investment philosophy is based upon the long-term health of successful businesses (choosing good companies), rather than upon the shaky foundation of attempting to time market cycles or predict fluctuations of currencies, commodities, or interest rates --...
Wednesday, December 12, 2007
What is the future of search?
Here is a link to an interesting story by Dean Takahashi of the San Jose Mercury discussing an internet start-up called Mahalo (named for the Hawaiian word meaning "Thank You").The article reports that "Mahalo is a search engine that is powered by human judgment, known in Web 2.0 circles as 'curation.' Curation uses human expertise to weed out all...
Tuesday, December 11, 2007
Deworsification
In yesterday's post, we discussed some of the drawbacks caused by portfolio size. As "mass-managed money" pools grow larger, they are forced to own more and more portfolio holdings and those holdings typically need to be in larger and larger companies as well.Some of the largest mutual funds have well over two hundred names -- one fund mentioned as...
Monday, December 10, 2007
The further you are from owning individual companies . . .
The further you are from owning individual companies, the more your investment
management tends to be rooted in the performance of
markets (or sectors of the market)
rather than rooted in the performance of businesses.
In a mutual fund, you don't actually own the stocks of businesses. The mutual fund owns -- in
a giant pool -- those...
Friday, December 07, 2007
Don't isolate your forces
Deploying your capital has some parallels to deploying forces on the battlefield.
In both cases, for instance, you don't have unlimited resources to accomplish everything you want to do. You can't put troops on every single hill -- you have to weigh the costs and the risks and decide where you are going to deploy your forces....
Tuesday, December 04, 2007
Stick that in your pipe and smoke it
Here is a link to a video presentation of a talk given by Professor Noah Robinson of the Oregon Institute of Science and Medicine at the annual Gilder Telecosm event in October, 2007.Of course, a fairly large segment of the population does not permit any discussion of this side of the global warming argument to be so much as whispered. Simply uttering...
