Around this time every year, workplaces across Canada organize a number of events to raise millions for the United Way. One such event is a charity auction to which clients, suppliers and even employees themselves donate goods or services which are then auctioned off to the highest bidder and all proceeds go to charity. Mark [...]
Thinking, Fast and Slow: Michael Lewis has high praise for Prof. Daniel Kahneman’s new book saying that it seeks to explain the research of the past few decades into what appears to be “permanent kinks in human reason”. A Financial Advisor Makes a few Blunders: In a New York Times article, a financial advisor explains [...]
What went wrong at MF Global?: I had never heard of MF Global, the derivatives broker that filed for bankruptcy over the past weekend before but here is a very good explanation of what went wrong with risk management at the firm. Replacing bonds with dividend payers: With bond yields much lower than the dividend [...]
Europe’s “comprehensive” solution: Markets cheered news out of Europe on a plan to address the debt crisis. The Economist magazine explains the proposed solution and why the solution may not be so “comprehensive” after all. Behavioural Biases: Daniel Kahneman is an expert in behavioural finance. Along with Amos Tversky, Prof. Kahneman is a past winner [...]
Modest Equity Market Returns: In this recent paper, Elroy Dimson, Paul Marsh and Mike Staunton authors of Triumph of the Optimists update their research into stock returns relative to bonds in 19 different countries. They estimate that the expected returns from stocks will be a rather modest 3% to 3-1/2% relative to bills. Modest Asset [...]
Tomorrow’s Gas Price Today: Long-time Member of Parliament Dan McTeague runs a website that forecasts the next day’s gas prices for major cities across Canada. It can help you decide if you want to tank up today or wait until the next day. The website correctly forecast last week’s spike of approximately 6 cents a [...]
Before we kick off, I want to take a moment and wish all our readers a very happy Thanksgiving! Now, onto this week’s interesting stories… Institute for Financial Learning Ponzi Scheme: Last weekend, CTV’s W5 asked some tough questions as to why authorities allowed an alleged Ponzi scheme run by the Institute for Financial Learning [...]
Trouble with Experts: CBC TV featured a documentary on how good expert predictions, especially those stated confidently in the mainstream media are (hint: not very). Unfortunately, the show did not spend much time on research findings that experts who make probabilistic and nuanced forecasts are worth listening to but the show is still worth your [...]
The Long-Term Case for Stocks: Optimism about the stock market is in short supply these days. The Wall Street Journal ran a story on a long-range market forecast that expects US stocks to return an annualized 6.5% to 2020. The forecast sounds about right since dividend yields are just above 2 percent and economic growth [...]
With stock markets skidding down and bond yields dropping like a stone, many investors will likely find that the allocation to stocks in their portfolio is now below target and the allocation to bonds is above their target. Disciplined investors should regularly rebalance their portfolios to bring the allocations back to target but are likely [...]
