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This and That # 102

July 24th, 2008 · 8 Comments

  1. Mark Hulbert reports in The New York Times on a recent research that finds that money managers have a sorry record: “the number of funds that have beaten the market over their entire histories is so small that the False Discovery Rate test can’t eliminate the possibility that the few that did were merely false positives”. The paper referenced in the article can be found here.
  2. As E*Trade Canada get gobbled up by Scotia Bank, Rob Carrick pays homage to the independent broker for breaking the comfortable oligopoly that charged high trading commissions for years.
  3. The 16 Rules for Investment Success by Sir John Templeton courtesy of Franklin Templeton. While you are at it, check out the updated Canadian periodic table of investments.
  4. Statistics Canada reported that inflation hit 3.1% over the past year. It was hardly surprising that food, energy and transportation costs were up sharply moderated by lower automobile and computer prices.
  5. Jon Chevreau finds out what some advisors are telling their clients about the global stock market turmoil.
  6. Growth in Value doesn’t share the Industry minister’s optimism that the spectrum auction will result in lower cell phone bills.
  7. Canadian Financial Stuff has a crazy idea for splitting income with his spouse.
  8. Michael James gives a good piece of advice only to find that it didn’t work out as anticipated.
  9. The Dividend Guy on the nine rules of risk management.
  10. Frugal Trader is excited about the GM Volt.

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8 responses so far ↓

  • 1 Michael James // Jul 24, 2008 at 11:21 pm

    Thanks for including my article this week.

  • 2 MillionDollarJourney // Jul 25, 2008 at 5:33 am

    Thanks for the mention CC - enjoy the weekend!

  • 3 Gene // Jul 25, 2008 at 12:19 pm

    Good links. I totally agree with Rob Carrick. I deal with E*trade, and they have me swearing under my breath regularly, but it’s absolutely true that they have been great innovators at introducing customer-friendly services and prices.

    No question that commissions are lower across Canadian discount brokers because of their price cuts. It scares me that E*Trade Canada is being taken over, as it will likely stifle their creativity. It’s too bad that a less competitive brokerage can take them over, as it removes the incentive for E*Trade to compete.

    Regarding the Hulbert link, I think the last paragraph is key:

    “Professor Wermers [the study's author] says his advice has evolved significantly as a result of this study. Until now, he says, he wouldn’t have tried to discourage a sophisticated investor from trying to pick a mutual fund that would outperform the market. Now, he says, “it seems almost hopeless.” “

  • 4 Jon D. // Jul 25, 2008 at 2:58 pm

    I do not believe that anything will change at e-trade. Just like with TradeFreedom, BNS is just trying to expand their wealth business as TD is running away from the pack. In fact, BNS changed SMDI as of June 1 to refocus it’s operations for high networth clients.
    Actually, Gene, eNorthern is giving up the discount brokerage business and “handing” it over to Questrade as of Aug. 1. So the “smaller” players are reacting.

  • 5 Drew // Jul 25, 2008 at 6:39 pm

    I agree with Jon.

    Etrade has helped push lower commissions but it was small independents like TradeFreedom that actually started offering $9.95 commissions. In fact they have been offering $9.95 since 2001. Etrade put pressure on the bank based brokers and forced their hand.

    Scotia bought TradeFreedom and didn’t change the commissions - Scotia will not risk increasing commissions for active traders at Etrade - the attrition rates will be counter what they are trying to accomplish, and that is cater to the active trader segment now.

    Scotia is showing their commitment to the active trader segment by purchasing brands that cater to those segments. They didn’t buy TradeFreedom and change the technology, pricing - in fact they kept the brand. That is a huge commitment.

    They obviously cant retain the Etrade brand because it will still be in existence in the US and internationally but they will most definitely take the best of all three brands.

    SMDI is not a brand that appeals to active traders - so what better way to appeal to the segment then by purchasing the brands that do and then develop a brand that blends the best of all three companies.

    SMDI has excellent research and service, large bond inventory, financial backing, Etrade has great pricing and mutual fund prices, TradeFreedom has great technology and spot forex trading and they have a per share pricing model that is a minimum charge of $1.00.

    Once the ducks are aligned then they will be a powerhouse competitor to TD. It will be very interesting to watch in the next coming months.

  • 6 Weekly Dividend Investing Roundup - July 26, 2008 » The Dividend Guy Blog // Jul 26, 2008 at 11:18 am

    [...] sure you open up the PERIODIC TABLE OF INVESTMENTS, as presented on Canadian Capitalist’s [...]

  • 7 Big Cajun Man // Jul 27, 2008 at 10:10 pm

    Thanks for including me in this group of great articles. No I am not divorcing her!

  • 8 Sometimes One Link is All It Takes | Working Hard On The Internet // Jul 29, 2008 at 7:18 am

    [...] red circle reflects the day he mentioned my “So I should Divorce my Wife” post, in his This and That #102 . Canadian Capitalist [...]

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