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moneysense.ca, 13/03/09
This and That: Warren Buffett Marathon edition
- Warren Buffett held forth for three hours on a whole range of topics on CNBC’s Squawk Box this week. The first part of the interview is available here. Follow the links for the entire video. The transcript of the program can be found here.
- Jason Zweig points out in The Wall Street Journal that rebalancing has a downside in severe bear markets.
- A reader pointed out that Derek Foster’s latest media blitz is a tactic to market his new book. I haven’t read his latest book but Derek’s posts on Canadian Business forum lend credence to the theory. Be sure to check out why Brad thinks Derek’s latest “strategy” isn’t such a hot idea. And of course, Brad has been warning about Derek for a long time now.
- Tim Cestnick has some tips on who you should name as a beneficiary for your RRSP accounts. He follows up with a column on how to actually name a beneficiary.
- Rick Spence writes columns for various publications such as The National Post, MoneySense etc. He also writes a blog called Canadian Entrepreneur, one of the hidden gems of the blogging world. Check it out — I think you’ll agree.
- Mr. Cheap has some selfish reasons for being a good landlord.
- Million Dollar Journey featured a guest post on whether or not to incorporate a rental property.
- Larry MacDonald highlights a research paper that found that DIY investors should avoid trading just after market open and should beware of the pitfalls of limit orders.
- It is interesting to find out from Preet how a commission grid for a financial advisor looks like.
- Canadian Financial Stuff has a tax tip for parents with kids in University.
Have a great weekend everyone!
moneysense.ca, 13/03/09
Thanks for the link & mention!
Derek reminds me of Robert Kiyosaki (author of Rich Dad, Poor Dad). Now that the real estate market has crashed in the US, Kiyosaki now says that when he told people to buy real estate he didn’t mean that they should buy real estate! Moron.
Fred
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Thanks for the link CC, enjoy the weekend!
Thanks for that link CC.
What Foster is currently doing I consider to be very risky – even more so than how he presented his strategy to new investors in his first book. Investors need to realize that with naked puts you’re taking on 100% downside risk with 0% upside and only collecting the equivalent of a 1% premium (based on what his current option portfolio consists of).
I can’t fault him for selling out of the market to protect his capital, but what he’s currently doing, IMO, is much riskier than his earlier strategy.
Brad: I agree with your viewpoint. I also think (and I believe this has been pointed out in some of the forum discussions) he is contradicting himself with selling puts. From what I understand, you write puts to earn premium income when you have a neutral or bullish outlook. But he says he sold out of his entire portfolio because he is extremely bearish. It is pretty stupid to expect stocks to fall another 30% (very bearish) and selling puts to earn a little bit of premium income (neutral or bullish).
I don’t think he’s quite as bad as Kiyosaki, because he seems to just leave some stuff out rather than making up stories out of whole cloth and presenting them as factual. I do think he has a major credibility problem, however, because his original “strategy” that supposedly worked so well for him didn’t include the part about making a huge bet on one stock with leverage, which is what worked so well for him.
Additionally, he has a credibility problem because he refuses to admit his original strategy was flawed, even as he abandons it. It’s one thing to sell books telling people to invest 100% in divident paying stocks and hold them forever regardless of the market, it’s quite another to claim that’s still a good strategy after having done a complete 180.
Not to mention that I can’t see ever taking advice from a guy who comes up with his strategy for dealing with a falling market after the market has fallen 40%. The guy who made billions by short-selling mortgage CDOs before the crash is worth listening to. Not so much the guy saying “I just lost hundreds of thousands of dollars in the stock market, read my book to find out how!”
“I do think he has a major credibility problem, however, because his original “strategy” that supposedly worked so well for him didn’t include the part about making a huge bet on one stock with leverage, which is what worked so well for him.”
If he had done that , then his book would have been about gambling, not investing. In any case, it is avery flawed book, because he did not reveal the whole story of how he was able to retire very early, which was what the book was supposed to be about.