10 Thursday AM Reads

Good morning! Here are some reads to start your Thursday:

  • How to Cheat on Your Taxes (Newsweek)
  • Record Europe Dividends Keep $3 Trillion From Factories (Bloomberg)
  • Dimon: Ending QE will send rates to 5 percent on the 10-year Treasury bond (Fortune)
  • Important Differences Between 2007 and 2014 (Reformed Broker)

 

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Category: Financial Press

The Broken SEC Enforcement Mechanism

Today, I am compelled to direct your attention today to a column by my Bloomberg colleague Jonathan Weil, titled “The Best SEC Speech Ever.” The speech that Weil referred to in the headline was the retirement speech of Jim Kidney, a 25-year veteran trial attorney at the Securities and Exchange Commission. Three things stood out…Read More

Category: Legal, Regulation

SEC: “A Tollbooth on the Bankster Turnpike”

Jim Kidney’s SEC Farewell Speech   Now what you have all come here for. To hear some final words from Jim Kidney. Emphasis on FINAL. I originally planned this to start at noon so I could give a four hour speech getting even. But sadly, it is not to be. I went through my grudge…Read More

Category: Legal, Regulation, Think Tank

“Outrageous & Piggish” CEO Compensation

CEO pay: ‘Unbelievably piggish and outrageous,’ no matter how you slice it

Autoplay video after the jump
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Category: Corporate Management, Crony Capitalists, Video, Wages & Income

Which Poor Neighborhoods Experienced Income Growth in Recent Decades? Dionissi Aliprantis, Kyle Fee, and Nelson Oliver Department of the Federal Reserve Bank of Cleveland 04.09.14     Why has average income grown in some poor neighborhoods over the past 30 years and not in others? We explore that question and find that low-income neighborhoods that…Read More

Category: Economy, Think Tank

10 MidWeek PM Reads

Some reads to wind down the day: • SEC Goldman Lawyer Says Agency Too Timid on Wall Street Misdeeds (Bloomberg) • Big Data: Are we making a big mistake? (FT) • Why buying a corporate jet pays for itself (Quartz) but see The Decline of the 99 Percent (MoneyBox) • U.S. Economic Spring Is No False Dawn (Barron’s) • Here…Read More

Category: Financial Press

States Most & Least Dependent on Federal Government

Source: Wallethub

Category: Digital Media, Taxes and Policy

Annualized Returns & the Average Investor

annualreturns

Source: JP Morgan Guide to Markets 2Q|2014

 

Have a look at the chart above. It is from the quarterly chart book from JPM (which I have been referencing for years).

Average annual returns for individuals over the past 20 years? 2.3%. That fails to even keep up with inflation. REITs, commodities, equities and even bonds all wildly outperform the average retail investor.

The bottom half of this graphic shows what happens when investors are left to their own devices: They engage in emotional decision-making (AKA Fear & Greed), they “performance chase,” they fail to have any form of risk management in place, pay high fees, and exhibit an almost willful lack of discipline.

 

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Category: Investing, Really, really bad calls

10 MidWeek AM Reads

Some morning reads for your enjoyment: • The Short Guide to Capital in the 21st Century (Vox) • Renewables are hot again: Goldman’s Stuart Bernstein says VCs are coming back to clean tech. (WSJ) see also Environmental Defense Fund head says CEOs underestimate the effects of climate change. (WSJ) • Investor Sentiment and the Cross-Section of Stock…Read More

Category: Financial Press

What You’re Hearing Is Noise

In a new project at Bloomberg I will interview some of Wall Street’s most influential thinkers. I’ll share more details with readers when we get closer to a launch date, but several consistent themes have become clear to me, even at this early stage. The one I want to discuss this morning is the concept…Read More

Category: Apprenticed Investor, Cognitive Foibles, Financial Press, Investing