Time for some train reading:

• The Many Errors of the ‘Active vs. Passive’ Debate (STA Wealth)
• Give investors access to all the information they need (FT)
• Hedge Funds Won’t Make You Rich (Bloomberg View)
• The Buck Stops With Obama on Tepid Financial Reform (ProPublica) see also Too Cautious to Succeed: How Tim Geithner Failed at What Mattered Most (The Atlantic)
• Value Versus The Market Since 2008: The Magic Formula Effect (Greenbackd)
WTF?!  Fox Gives Show To SEC-Fined Analyst Who Was Paid To Push Now Worthless Stocks (Media Matters)
• Conservatives defending Geithner on Social Security are getting it wrong (LA Times)
• Minyanville’s Harrison: Online Media Model is ‘Broken’ (MoneyBeat)
• Darwin in Mind: New Opportunities for Evolutionary Psychology (PLOS Biology)
• 16 Hilarious Reactions to Pat Sajak’s Nutty Climate Change Tweet (Mashable)

What are you reading?

 
Housing Investors Are Retrenching by Becoming Landlords

Source: WSJ

 

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.

4 Responses to “10 Wednesday PM Reads”

  1. willid3 says:

    and now for some thing different?

    http://catipal.tumblr.com/

  2. DeltaV says:

    Re: Housing Investors Are Retrenching by Becoming Landlords

    Please take a look at the actual financial performance of the “REO to Rental” companies. I have checked three of these mentioned that are public, and all are characterized by (a) 6% of less of their initial investment revenue per year, and (b) 150%+ costs / revenue. In other words, big money losers. Established property management companies have been very critical, expressing that they do not exhibit sound economic judgement.

    However, they are helping to keep property values up! :)

  3. rd says:

    Re: Active vs Passive

    The S&P 500 is a good bogey, but it is clearly not risk-free and people who are relying on it for income might suffer when it periodically goes through 50%-60% swoons for a couple of years. It is somewhat diversified but still only accounts for about 30% of the world’s equity market value, so there is a lot going on that it does not cover in a major way. It is only a small fraction of the total value of stock, bond, and real estate markets. As far as I can tell, one of the main reasons the S&P 500 index exists is to make the average investor feel guilty during the late stages of a bull market, thus precipitating them into action at exactly the wrong moment.

    Since there are large swaths of the markets uncovered by the S&P 500, the debate should really be about how to get inexpensive index funds that can cover large swathes of the market while getting some smaller index or active funds to cover smaller, relatively uncorrelated areas that can really diversify holdings.For diversification, I have a couple of small, active team-managed funds with proven track records to help with the latter. Their zigs when the market zags can help a lot in reducing volatility while sometimes improving overall returns over a decade or more. These disciplined funds tend to avoid the bubbly stocks thereby reducing losses in the downturns. The team managed approach means there is less impact when a “star” managaer leaves. They can lag the S&P 500 for years but suddenly, especially during periods like 2000-2 can suddenly shine massively.

  4. Conan says:

    here is an easy 3 fund model to give wide coverage at low cost. put 1/3 in each

    Total Bond Market Index = VBMFX

    Total Stock Market Index = VTSMX

    Total International Stock Index = VGTSX

    easy to dollar cost average also.