This and That: Cheap Stocks, bond allocations and more…

June 7, 2013


1. Money magazine interviewed Bill Nygren of Oakmark Funds, a well-regarded value mutual fund in the United States. In it Mr. Nygren scoffed at the idea that equities are expensive saying buying stocks today should be like “shooting fish in a barrel”.

2. Conventional wisdom has it that investors should diversify their investments among stocks, bonds and cash. But with bond yields so low these days, The Wall Street Journal says that some investors are moving to an all-stock allocation and offers some considerations for investors contemplating such a move.

3. Also, if an investor decided that now is the time to increase the allocation to stocks, she has to take steps to avoid selling out of fear when things turn sour, says The New York Times Bucks blog.

4. The Wall Street Journal asked a panel of experts on the No. 1 thing that investors shouldn’t be worried about but are and got some interesting responses.

5. Don’t look now but interest rates on bonds have started to creep up in recent days. Ironically, interest rates are rising when it looks like inflation is slowing down everywhere. This blog post in The Economist magazine takes a stab at explaining why.

6. Loblaws has filed for an IPO of its properties into Choice Properties REIT. The REIT is reported to target an yield of 6 to 6.5 percent and will be valued at $3.6 to $3.9 billion.

7. The Financial Post kicked off a series of columns called TFSA Bragging Rights by profiling an investor who held penny stocks in the account. Of course, it goes without saying that penny stocks are a high risk proposition.

8. Canadian Money Forum members shared how their TFSA is doing early in the New Year.

This and That: Retirement Gamble, Modest Returns and more…

May 30, 2013


1. Frontline, a program on PBS, featured a story called The Retirement Gamble (the show itself may not be available to all readers) recently. The program takes a hard-hitting look at the state of retirement savings in America: too many people don’t save enough and those that do save are not investing it wisely or are getting fleeced by the financial industry. A cool graphic available here as a web extra, takes a stab at showing how much retirement fees are really costing you. Don’t let this happen to you.

2. A New York Times article profiled a money management firm that has an unique sales pitch by showing their expected returns after fees, taxes and inflation. Hint: Real returns are going to be rather modest.

3. This column in The Wall Street Journal says that stocks and bonds are pricing in divergent scenarios and one or both markets could turn out to be wrong.

4. Here’s a sobering article that points out that accumulating a $1 million nest egg isn’t as easy as the financial industry makes it out to be from a surprising source: CNBC.

5. Fortune magazine ran a story alleging long-term criminal fraud at Ranbaxy Labs, whose generic medicines appear to be widely prescribed in Canada as well. One wonders, what, if anything, Canadian authorities are doing to keep our medicines safe and efficacious.

6. The Economist magazine ran an update to its story on global real estate with valuation estimates based on rents and income. The Canadian housing market ranks high among the most richly valued markets.

7. The global financial crisis dealt only a glancing blow to Canada compared to many other developed markets. Outgoing Bank of Canada Governor Mark Carney explained why in a recent speech.

8. Rich people are different from you and me. They lose more money in investing quipped Dan Solin, in a talk to clients of PWL Capital this week. Michael James on Money reported on the talk and a local radio station did a short interview with Mr. Solin.

9. Tom Bradley of Steadyhand Funds has put out a report called Five Essential Elements to Being a Better Investor. It contains sensible advice for keeping your emotions in check, a key to becoming a better investor.

10. Now for something completely different: Jon Stewart ran a funny piece on the troubles surrounding Toronto Mayor Rob Ford.

This and That: Excel Errors, Housing Bubbles and more…

May 17, 2013


Economics may be a dismal science but a recent flap between two renowned Professors and a grad student simply trying to reproduce their results for a school assignment makes for a fascinating story.

Paul Krugman lashed out at the pundits who “turn their backs on the unemployed” based on the flawed findings of Reinhart and Rogoff in The New York Times.

Globe and Mail columnist Rob Carrick highlighted a rent versus buy argument that finds “owning never wins”. As is usually the case with buy v. rent debate, the case study is filled with assumptions like 4 percent maintenance expense on homes.

The United States may just be recovering from the previous housing bubble but sharp recent gains are giving rise to worries that another bubble may be forming in some markets.

While the S&P 500 and Dow Jones Industrial Average are hitting new highs, the US remains stuck in slow economic and employment growth. This New York Times column took a look at disconnect between the stock market and the economy.

Charlie Munger doesn’t get the same attention as Warren Buffett but he probably has better zingers. In an interview with CNBC, Mr. Munger bluntly characterizes high-frequency trading as “legalized front-running” and “basically evil”.

In an interview with CNN Money, legendary money manager Charley Ellis says that investors who see fees not in terms of assets but in terms of expected alpha will find fees “unbelievable”.

This Wall Street Journal video segment says that everyone should have a contingency plan and suggests some ideas. Some tips like the one to have 4 weeks of water around the house sound completely impractical.

Remember how BRICs became investment fads a few years back based on rosy economic forecasts looking ahead more than two decades? The Economist says that with the four emerging market economies slowing markedly, we may already be in a post-BRIC world.

Now for something completely different: Slate ran a story on the best pictures captured by Commander Chris Hadfield aboard the International Space Station. You can find many more pictures on Col. Hadfield’s Facebook page here.