My Sunday morning reading materials:

• The market is up 170% since 2009, but are you? (MarketWatch)
• Your Wilting Retirement: Company 401(k) Plans Get Stingy (Businessweek)
• Things You Can Do That Wall Street Can’t (Motley Fool)
• Is Gold Becoming Another Regular Old Commodity? (Pragmatic Capitalism)
• Highest Minimum-Wage State Washington Beats U.S. Job Growth (Bloomberg)
• How macro answered its critics (Noahpinion)
• Google Has Destroyed Microsoft’s Business Model (Motley Fool)
• MIT’s Liquid Metal Stores Solar Power Until After Sundown (Bloomberg)
• The Future of Venture Capital, Tech Valuations and the Fate of Tech Incumbents – Conversation with Bill Janeway (Forbes)
• Another goddamned appreciation of the late, lamented Bill Hicks (The Guardian)

Whats for brunch?

 

Can the Bond Rally Continue?

Source: Fidelity

 

Category: Financial Press

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

16 Responses to “10 Sunday Reads”

  1. chartist says:

    My company has been experiencing nearly 20% annual turnover, and that’s at the headquarters! If they are at all interested in cutting that back, they need to go back to a pension system. The 401K was an experiment that failed both because people will not take responsibility for themselves and corporations found ways to whittle away at the margins.

    • VennData says:

      But shopping for the best healthcare, that’s different. I may not be able to handle the emotuonal swings of an asset allocation, but I like being given the reponsibility for handling my own health care, not only that I am and expert at Home Schooling my children, doing my own tax planning (filling out those concise forms) and making rational decisions about foreign policy. I watch Fox.

      • rd says:

        Venn

        Healthcare is a sector that we are absolutely the best equipped to manage ourselves, particularly when one considers that the moments when you need to really focus on managing the costs and making decisions, one is often unconscious or on drugs. Hmmm.. that sounds like the decision-making process used by many young adults.

      • Petey Wheatstraw says:

        Heard a theory recently (can’t remember where — might have been here), that in addition to the surveillance/security state, another means of controlling our teaming masses is to preoccupy them with paperwork and clerical tasks.

        That the IRS isn’t liable for their own understanding or interpretation of the tax code says a lot. Joe Blow doesn’t stand a chance. Our “representatives” couldn’t have made something so complex unintentionally. It takes effort, imagination, and commitment to fuck something up that badly.

    • Jojo says:

      Instead of 401K’s, perhaps it could make sense to allow workers to contribute to their retirement via the Social Security system?

      You would still pay the standard monthly amounts for SS and would always be guaranteed your minimum SS monthly amount once you hit the appropriate age.

      However, those who made extra contributions would get additional $$ based on the formula(s) for how returns were computed over the years.

  2. hue says:

    ‘Son You Got A Pantyhose on Your Head’: 25 Things You Didn’t Know About Raisin Arizona (moviefone)

    Buddy, Can You Spare a Studio?(NYTimes)

    How Zappos’ CEO Turned Las Vegas Into a Startup Fantasyland (Wired)

  3. Stock Soup says:

    “The market is up 170% since 2009, but are you?”

    No. But then again I follow very smart strategists and only lost 7% in 2008 when everyone else got crushed. So when 2009 started I was mostly cash. It took until 2011 to be fully invested.

    Lesson learned: In avoiding 2008 sell off, I also missed the 2009 re-bound. I would probably be in the same place today if I stayed invested all through 2008-13.

  4. rd says:

    Barry – I think you were immortalized on the comic page this week:

    http://www.gocomics.com/nonsequitur/2014/03/07

  5. rd says:

    Businesses have managed payrolls over the past couple of decades mainly by controlling headcount, hourly pay, and defined benefits.They have been running out of those costs that they can cut.

    Much of the hourly pay cuts had to be recycled by the companies back into health insurance benefits. Beneifts, including 401ks, are the next sweet spot for corporate cost-cutting to continue.

    The irony with cutting 401k contributions is that inadequate retirement funding due to inadequate savings has been identified as a major future risk, so preferential cutting of defined benefit and contributions flies directly in the face of a major societal need. The allocation of an extra 5% or more of GDP to health care in the US compared to the rest of the world does have major ripple effects and this is one of them. I think it will take another decade or two for the US to improve its health care efficiency to match the rest of the world and maybe then the retreiment funding issue can be better handled.

  6. RW says:

    A couple short articles on currency action interesting for a couple reasons but mainly in this case to point out that an analysis can be reasonably good even if proceeds from an erroneous prior; that is, the causes of the putative “weakness” are reasonably assessed but the entire notion of a “weak” currency for ANY nation with significant exports is incoherent within a macroeconomic framework (see NB below).

    Don’t bet on dollar weakness

    Why is the dollar so weak? Reasons include some economic improvements in the Eurozone and the ECB’s persistent hawkish stance. That’s been driving up the euro. But the main reason has been the barrage of soft economic data out of the US in the past couple of months.

    Ruble hits new lows as Bank of Russia focuses on more “pressing” issues

    The ruble resumed its slide this week, hitting another post-devaluation low against the euro.

    NB: it’s usually a mistake to think of a currency as either “weak” or “strong,” think instead of it as relatively cheaper or more expensive vis-a-vis your own currency and you’ll make fewer investment mistakes WRT foreign assets. It will help if you don’t get distracted by foolishness about national debt or deficits too, in the real world these issues are not as important as the trade deficit.

    Shorter me: The economies of both the US and Russia have a tailwind as long as their currencies are relatively cheaper than their main trading partners; contrarily, the economies of their main trading parties face headwinds.

    • RW says:

      WRT global trade

      Trade, Wages, and the Conventional Wisdom (or lack thereof)

      There are many ways in which DC talks past the rest of the nation, and one of them is on the impact of global trade on the economic lives of our citizens. …

      …far too often, elite analysis of trade thinks of people exclusively as consumers getting a better deal on price when many are also workers getting a worse deal on wages. And that latter part is a lot more common than the conventional wisdom suggests.

  7. Al_Czervik says:

    The Marketwatch article presents a false choice. Either you were fully invested in March 2009 and held on or you sold out at the bottom and never got back in (or got back in too slowly).

    During 2006-2008, the market took a long time to top. For an attentive investor with concerns that the market wasn’t acting well, it would not have been difficult to scale-out at SPY prices exceeding $125. As quickly as the market turned-around at the bottom, there was plenty of time to scale back in at prices below $125. I managed to do so and am happy with the results.

    This isn’t meant as a brag, but to point out that the “do nothing” or Lazy Portfolio approach doesn’t work for all investors. IMO, trying to time the market doesn’t work. However, I have found that making *small* and *gradual* moves in non-taxable accounts is helpful in managing my emotions. If I had been fully invested in mid-2008 and ridden it all the way down, it is likely that I would have sold emotionally with a big loss and had trouble getting back in.

  8. intlacct says:

    “This isn’t meant as a brag, but to point out that the “do nothing” or Lazy Portfolio approach doesn’t work for all investors. IMO, trying to time the market doesn’t work. However, I have found that making *small* and *gradual* moves in non-taxable accounts is helpful in managing my emotions. If I had been fully invested in mid-2008 and ridden it all the way down, it is likely that I would have sold emotionally with a big loss and had trouble getting back in.”

    People generally have a great deal of trouble selling some after a run up. I have mentioned my great buy discipline but total cluelessness on sell. It has been liberating to simply sell 10%-25% of the large (say 50%) run ups here and there and redeploy. Gold, commodities and real estate have done handsomely. The rest is OK but richly valued (EM and Europe [relatively] being an exception).

  9. intlacct says:

    re: how ill-equipped people are at making long term useful choices: Sounds like most here are in general agreement. The solution would seem to involve the government telling us where to put money in general and guaranteeing some minimum. ie some significant degree of socialism. It has worked numerous times elsewhere. Yet, if this is proposed, Americans go nuts – even tho the most loved benefits are pure socialism (medicare, SS).

    As an almost outsider (lived outside US for decades) it seems the US citizenry has been ceded the larger outcomes of life (health care, retirement security) to business interests. It is a striking difference with other locales with which I am familiar.

    Someone above said keeping people occupied with forms as a way to control – great point. From a selfish perspective, those complex rules are just another reason to live. :)