The share market rose 2 points today because of…
23 Apr 2015 Leave a comment
in economics of information, entrepreneurship, financial economics Tags: active investing, efficient markets hypothesis, entrepreneurial alertness, passive investing
Who said the New Zealand share index lacked diversification
17 Apr 2015 Leave a comment
in financial economics, politics - New Zealand Tags: active investing, investment diversification, passive investing
One trait that makes the US stock market better than its peers read.bi/1EJ4ZrC http://t.co/6kz7zlghQa—
BI Chart of the Day (@chartoftheday) February 23, 2015
Do vice funds out-perform the share market?
13 Apr 2015 Leave a comment
in entrepreneurship, financial economics, market efficiency, TV shows Tags: active investing, efficient markets hypothesis, entrepreneurial alertness, ethical investing, passive investing, Sopranos, vice funds
The Vice Fund has outperformed the S&P 500 since 2004. They invest in sinful stocks as its managers describe it:
Designed with the goal of delivering better risk-adjusted returns than the S&P 500 Index. It invests primarily in stocks in the tobacco, alcohol, gaming and defence industries. Vice Funds believe these industries tend to thrive regardless of the economy as a whole.
The Vice Fund was founded in 2002 to specialise in socially irresponsible stocks such as gambling, alcohol , tobacco and defence contracting. The Vice Fund is not recession proof, but did do better in the 2009 market crash.
The Vice fund also has high management fees of 2%. Americans can buy Vanguard’s or Fidelity’s index funds and pay only 0.1% in expenses. The Vice Fund may have buckled under the heat because it has rebranded:
The Vice Fund is now called the Barrier Fund. The investment strategy and the portfolio manager have not changed… The Barrier Fund invests in companies, both domestic and foreign, within industries that have significant barriers to entry.
All is not lost, the Ave Maria Catholic Values Fund beat the market almost as handily as Vice.
To confuse further, the Catholic Values Fund revealed that it shared investments in defence contractors with the Vice Fund. The Vice Fund invested in staid Berkshire Hathaway and Microsoft.
HT: Investing in Vice.
Is stock picking better than monkeys throwing darts at a dart board?
25 Mar 2015 Leave a comment
in financial economics Tags: active investing, efficient markets hypothesis, passive investing
HT:
Active managers have been on the defensive of late.
22 Mar 2015 Leave a comment
in financial economics Tags: active investing, efficient markets hypothesis, index linked investing, passive investing
In 2014, just 21 percent of the funds that pick U.S. stocks beat their benchmarks, according to Morningstar. Investors have noticed and voted with their feet, swapping their actively managed funds for low-cost index and exchange-traded funds…
Some $13.1 trillion was invested in U.S. mutual funds at the end of 2014. Of the $8.3 trillion in stock funds, 38 percent was passively managed. Yet that’s double the percentage at the end of 2004.
via Fund Manager Ab Nicholas Has Been Beating S&P 500 for 40 Years – Bloomberg Business.
Eugene Fama on it’s difficult, if not impossible, to distinguish luck from skill
24 Feb 2015 Leave a comment
John Bogle on the folly of share market speculation
24 Feb 2015 Leave a comment
in entrepreneurship, financial economics Tags: active investing, efficient markets hypothesis, entrepreneurial alertness, indexed linked investing, passive investing
"Paul Samuelson" on the New Zealand superannuation fund beating the market
24 Feb 2015 Leave a comment
What were they thinking? NZ government super fund loses the lot on loan to already failing bank in one of the PIGS.
20 Feb 2015 Leave a comment
in economics of bureaucracy, entrepreneurship, financial economics, politics - New Zealand Tags: active investing, corruption, euro crisis, Index of Economic Freedom, junk bonds, passive investing, Portugal, risk diversification, state owned enterprises
A Portuguese bank on the verge of collapse – what were they thinking?
That would have been the response of many newspaper readers this morning upon learning the New Zealand Superannuation Fund has lost nearly $200 million in taxpayers’ cash on a "risk-free" loan it provided to Lisbon-based Banco Espirito Santo (BES) on July 3.
The loan – part of a US$784 million credit package US investment bank Goldman Sachs put together through its Oak Finance vehicle – was made exactly one month before Portugal’s central bank broke up BES and split the country’s biggest lender into two, with one part holding the good assets and the toxic assets placed in the other.
Unfortunately, the Oak Finance loan is now stranded in the so-called "bad bank" following a retrospective law change by the Bank of Portugal.
Christopher Adams: What were they thinking? – Business – NZ Herald News.
This is what the 2015 index of Economic Freedom has to say about Portugal on the rule of law:
In 2013, the OECD expressed concern over Portugal’s reluctance to crack down on foreign bribery, particularly in regard to its former colonies Brazil, Angola, and Mozambique.
Since 2001, Portugal had officially acknowledged only 15 bribery allegations, and there had been no prosecutions. The judiciary is constitutionally independent, but staff shortages and inefficiency contribute to a considerable backlog of pending trials.
Actively managed share funds are on the way out
20 Feb 2015 Leave a comment
in entrepreneurship, financial economics, industrial organisation, survivor principle Tags: active investing, efficient markets hypothesis, passive investing, William F. Shape
After costs, the return on the average actively managed dollar will be less than the return on the average passively managed dollar for any time period.
—William F. Sharpe, 1990 Nobel Laureate
4 out of 5 actively managed fund portfolios underperformed all index fund portfolios in all scenarios tested.
via The tide is turning as investors switch from high-cost, actively managed funds to index funds for lower costs, higher returns » AEI | Carpe Diem Blog » AEIdeas and Mutual Fund Expenses | Lion’s Share.
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Would Keynes Have Been Fired as a Money Manager Today?
30 Jan 2015 Leave a comment
in entrepreneurship, financial economics Tags: active investing, efficient markets hypothesis, index linked investing, John Maynard Keynes
An excellent link by a great blog I have just come across.
Interesting post by Ben Carlson.
Keynes managed an average return of 13.2% in the period 1928-45. The markets gave a return of -0.5% in the same period. This was an exceptional performance albeit came with much higher volatility. So would he have been fired for this performance?
View original post 360 more words
Who Routinely Trounces the U.S. Stock Market? Try 2 Out of 2,862 Funds – NYTimes.com
30 Jul 2014 Leave a comment
in entrepreneurship, financial economics, survivor principle Tags: active investing, efficient markets hypothesis, indexed linked investing, passive investing, stock picking
For the three years ended March 2014, 14.10% of large-cap funds, 16.32% of mid-cap funds and 25.00% of small-cap funds maintained a top-half ranking over three consecutive 12-month periods. Random expectations would suggest a rate of 25%.
After five years, two funds are still beating the market in each of the last five years.The rest of fallen by the wayside.
via Who Routinely Trounces the Stock Market? Try 2 Out of 2,862 Funds – NYTimes.com
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