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The changing face of offshore programming 12/31/03   Permlink   Broken Link World "Yes, it's still the cheaper option -- but the price differential is shrinking fast, and the hidden costs can be fierce." Atkins world 12/31/03   Permlink   Broken Link Health "When did carbs replace fat as nutritional enemy No. 1? What does it mean for the pork-rind industry? Is Wonder Bread toast? And what the heck is ketato? How low-carb mania is roiling the food business." A Christmas letdown 12/31/03   Permlink   Broken Link Economy "Retailers overall may have fared better than expected this holiday season, but it still looks like Santa Claus couldn't make all the merchants merry this year." Keep more in 2004 12/31/03   Permlink   Broken Link Thrift "Here are 8 resolutions: pick one or two and stick with them to bolster your finances next year." Don't fall for these stupid credit-card tricks 12/31/03   Permlink   Broken Link Debt "Lenders are counting on you to fatten up their profits -- with higher rates, new fees and more fees -- all hidden in the fine print. Here's how to fight back." Trade wars 12/30/03   Permlink   Broken Link World "So is the Bush administration really willing to risk an all-out trade war simply to score domestic political points? Many U.S. free traders certainly think so. "It's a political year, so it's silly season," says David Kotok, chairman and chief investment officer of Cumberland Advisors, Inc., a New Jersey-based money manager. "Whether it is steel or brassieres, it doesn't make a difference: China is a scapegoat." According to Kotok, politicians are smart enough to know it's "easy to blame the state of the U.S. economy on people who can't vote." And like it or not, China's cheap workers, booming manufacturing sector and fixed currency policy have made the Asian country easily identified as a competitor that is undermining the U.S. job creation machine." How to find value, globally 12/29/03   Permlink   Broken Link Value Investing "Peter Cundill, founder of Cundill Investment Research, was named Canada's fund manager of the year at the Canadian Investment Awards gala held in early December. Born in Montreal and now based in London, Cundill spends much of the year scouring the globe in search of value opportunities for Mackenzie Financial's Cundill fund family." Milking lessons 12/29/03   Permlink   Broken Link Stocks "On the face of it, a financial-holding company seems to have been used to grab cash from the operating company, before losing that money through the silly use of derivatives and other speculative financial dealings. As the losses mounted, instead of coming clean, it seems that the stakes were raised in a desperate and ultimately futile effort to keep the scam going. If such a picture is broadly accurate, then Parmalat will look much like other corporate scandals. Until then, the worry is that fresh horrors may yet emerge." Make more mistakes 12/27/03   Permlink   Broken Link Management "Would you like me to give you a formula for success? It's quite simple, really. Double your rate of failure. You are thinking of failure as the enemy of success. But it isn't as all. You can be discouraged by failure or you can learn from it. So go ahead and make mistakes. Make all you can. Because, remember that's where you will find success." Nightmare after Christmas 12/26/03   Permlink   Broken Link Markets "Christmas Day may be about ripping open gifts, but the day after Christmas is about returning the reindeer sweater, the second digital camera, or the DVDs and CDs that you won't watch or listen to -- ever." Losing by instinct 12/24/03   Permlink   Broken Link Markets "The late Benjamin Graham -- erudite classicist, mentor to Warren Buffett, highly successful investor and probably the greatest financial mind of the 20th century -- said it best: "The investor's chief problem -- and even his worst enemy -- is likely to be himself."" Playing in a closed game 12/24/03   Permlink   Broken Link Funds "Unscrupulous mutual funds, as investors have learned to their chagrin, have found plenty of ways to cheat. There are, however, sound alternatives with many of the benefits of mutual funds but without the drawbacks. I discussed one such investment -- exchange-traded funds (ETFs) -- a few weeks ago. Now, consider closed-end funds" Self-Destruction, mother of invention 12/24/03   Permlink   Broken Link Stocks "But what does the joy of destruction mean for investors? A lot. Peters cites a study by Richard Foster and Sarah Kaplan of McKinsey & Co., who examined the first list of the biggest U.S. companies published by a magazine, the Forbes 100 of 1917, and compared it with a similar list 70 years later. Of the 100, only 39 managed to survive, and only 18 of those were among the top 100 in 1987." Manulife, John Hancock in fund probe 12/24/03   Permlink   Broken Link Funds "Manulife Financial Corp. and John Hancock Financial Services have been served with subpoenas for information about trading practices as part of ongoing probes into the mutual-fund industry." Home buying with no money down 12/24/03   Permlink   Broken Link Real Estate "In fact, according to a survey of buyers conducted in early 2003 by the National Association of Realtors, less than half of all buyers put down 20 percent. Among first-time buyers, 33 percent kicked in less than 10 percent of the purchase price, while 28 percent financed the entire price of the home." Herb Kelleher on the record 12/24/03   Permlink   Broken Link Management "What sort of smarts, determination, and ingenuity are required of a world-class entrepreneur -- one who starts an airline against all odds and goes on to build the only consistently profitable carrier in the U.S.? That's what BusinessWeek Managing Editor Mark Morrison hoped to discover recently when he interviewed Southwest Airlines (LUV) founder and Chairman Herb Kelleher in front of an audience of business leaders and MBA students at the University of Texas' McCombs School of Business." Corporate scandals 12/23/03   Permlink   Broken Link Stocks "The near failure of Parmalat is raising questions about how well Europe is reforming its corporate governance." Does your boss want you dead? 12/22/03   Permlink   Broken Link Management "Right now, your company could have a life insurance policy on you that you know nothing about. When you die -- perhaps years after you leave your employer -- the tax-free proceeds from this policy wouldn't go to your family. The money would go to the company. What's more, the company might use this policy to pay for retirement benefits and other perks not for you or your fellow workers, but for your company's top executives." Parmalat admits $5bn black hole 12/22/03   Permlink   Broken Link Stocks "Many of Italy's biggest banks are exposed to Parmalat, leading to fears of a system-wide meltdown if the company were to collapse." Out of sight, out of mind 12/21/03   Permlink   Broken Link Funds "We argue that the purchase decisions of mutual fund investors are influenced by salient, attention-grabbing information. Investors are more sensitive to salient in-your-face fees, like loads and commissions, than operating expenses; they are likely to buy funds that attract their attention through exceptional performance, marketing, or advertising. Our empirical analysis of mutual fund flows over the last 30 years yields strong support for our contention. We find consistently negative relations between fund flows and load fees. We also document a negative relation between fund flows and commissions charged by brokerage firms. In contrast, we find no relation (or a perverse positive relation) between operating expenses and fund flows. Additional analyses indicate that mutual fund marketing and advertising, the costs of which are often embedded in a fund's operating expenses, account for this surprising result." A value investor's secret 12/21/03   Permlink   Broken Link Value Investing "Value investors come in all shapes and sizes. Some invest in real estate, others in bonds (generally distressed ones), still others in stocks. Some specialize in certain industries or countries, while others are generalists. But most value investors have two things in common: (1) They seek to buy at a significant discount to intrinsic value (the proverbial dollar bill for 50 cents); and (2) They generally sell once intrinsic value has been reached." Tax Act amendments could eliminate interest deduction 12/21/03   Permlink   Broken Link Taxes "Golombek is concerned that if the new legislation is passed, it will be virtually impossible for investors who borrow money to purchase dividend-paying investments to pass the cumulative profit test. For example, Golombek gives the example of an investor who buys a stock yielding a 2% dividend today with borrowed money at a 4% interest rate. Assuming the price of the stock increases each year by 7%, he says, it would take approximately 20 years of holding the investment to make a cumulative profit since this profit does include the ultimate capital gain upon disposition. Most investors make regular changes to their portfolio and do not want to hold on to particular investments for so many years. Therefore, he says, any losses investors attempt to write off as a result of interest deductibility could be disallowed by the CCRA." Is the party over for income trusts? 12/21/03   Permlink   Broken Link Trusts "A little over a week ago, mutual fund manager Ben Cheng addressed an audience of 40 or 50 investors who gave him a startling insight into how retail investors view income trusts. "I asked how many of them had an income trust in their portfolio, and all their hands go up," Mr. Cheng recalls. "And then I said, how many people in this room have more than 50 per cent of their investable assets in income trusts? More than half of the hands go up. "That scares the hell out of me," says Mr. Cheng, who manages an income trust fund -- CI Signature High Income. "At the end of the day, it looks like retail investors have jumped again with both feet into an asset class thinking that it's invulnerable and it goes up forever. I don't think that's the case."" Snowbirds should understand tax rules 12/21/03   Permlink   Broken Link Taxes "You should be aware that you may have filing requirements in the United States even if you have no tax to pay south of the border. Certainly if you're a U.S. citizen you're required to file a tax return in the United States each year. But even those who are residents of Canada and non-citizens of the United States (known as non-resident aliens) may have filing requirements in the United States depending on the number of days spent there each year." Scrooge defended 12/21/03   Permlink   Broken Link Christmas "It's Christmas again, time to celebrate the transformation of Ebenezer Scrooge. You know the ritual: boo the curmudgeon initially encountered in Charles Dickens's A Christmas Carol, then cheer the sweetie pie he becomes in the end. It's too bad no one notices that the curmudgeon had a point" Beware the tricky fees on gift cards 12/19/03   Permlink   Broken Link Thrift "Between hefty shipping, maintenance and service fees, all the cheer can be sucked out of gift cards -- and most of the value. Here are 10 questions to ask if you give one or get one." Is Christmas inefficient? 12/19/03   Permlink   Broken Link Christmas "Yale University's Joel Waldfogel, writing in the American Economic Review, condemns what he calls "The Deadweight Loss of Christmas." Once you cut through the calculus and graphs, his conclusion is clear: though Christmas generates a $50 billion gift-giving industry, a tenth to a third of that is sheer loss. Why? Because the recipient doesn't always get what he wants. Given the chance, the recipient would have purchased something else." Humbled 12/18/03   Permlink   Broken Link Management "Now chief executives are regarded by the public with the sort of disdain and distrust usually reserved for politicians, lawyers and journalists." 2 mutual funds you can trust 12/18/03   Permlink   Broken Link Funds "Tweedy, Browne's offerings are the first to make the "Clean Funds" cut. Now, I need your help to find more." Vanishing jobs 12/18/03   Permlink   Broken Link Economy "Structural change in the economy means many jobs are never going to come back." Sadly, lawsuits are best remedy for investors 12/17/03   Permlink   Broken Link Brokers "In Canada today, protections for individuals preyed on by the investing industry are as feeble and inadequate as I've seen in five years of writing this column." Exec Pay 12/17/03   Permlink   Broken Link Management "The IRS is going after the last bastion of accounting creativity -- executive pay" The King Lear syndrome 12/15/03   Permlink   Broken Link Management "For the board, drawing up a succession plan is a good way to spot future problems. Mr Couchman describes one company that found to its dismay that it had only ten possible successors for 30 top jobs. But there are advantages for the boss, too. After all, one way to secure a sort of immortality is to pick one's own successor." Warren, show me the money 12/15/03   Permlink   Broken Link Buffett "Microsoft's fairly recent decision to pay a dividend demonstrates the dawning reality that this company has changed. But, they're not the only one. Market-dominator Berkshire Hathaway generates massive amounts of cash, and the Oracle should also share the wealth." Avoid the home equity hangover 12/15/03   Permlink   Broken Link Debt "Debt in lines of credit has jumped 31 percent this year. Don't let equity become a license to spend." Fund middlemen need to shape up 12/15/03   Permlink   Broken Link Brokers "Why shady sales practices result in higher costs and biased advice." Giving is still sound tax policy 12/14/03   Permlink   Broken Link Taxes "The recent death of gift-in-kind tax shelters doesn't mean the end of charitable giving in Canada. It's just no longer possible for donors to make a profit on the deal." The case for silver 12/14/03   Permlink   Broken Link Grant "Gold may well be a better monetary asset, but the white metal has many more practical uses, from the arts to medicine. And its consumption exceeds its output." Scrooge of the investing world 12/13/03   Permlink   Broken Link Thrift "A a time of year when most people are beingurged to spend, Norman Rothery is going about his business of urging people to be thrifty in how they invest their savings. Examining the menu over a Diet Pepsi at Pangaea, in the heart of the fashionable Bloor Street shopping district in downtown Toronto, the founder of StingyInvestor.com and FrugalFunds.com and publisher of two quarterly newsletters is an unlikely Scrooge -- more of a happy warrior of the value investing world." The virtue of ETFs 12/12/03   Permlink   Broken Link Indexing "But I think it's much easier and ultimately a better strategy simply to stick to ETFs that track the broad market -- for example, the iShares Dow Jones Total Stock Market Index (or Vanguard's Total Stock Market VIPER) for the stock market and the iShares Lehman Aggregate Bond fund for bonds." Merck isn't converting the skeptics 12/12/03   Permlink   Broken Link Stocks "Though the drug giant keeps trying, analysts and investors still don't think its go-it-alone strategy will work in the long run." The new indexing 12/11/03   Permlink   Broken Link Indexing "In the presence of more than one risk factor, the goal of indexing switches from diversification across the available stocks to diversification across the available risk-return dimensions. This might seem like "sector betting" to traditional indexers like Vanguard founder John Bogle, who still believe that market risk primarily determines performance and that small stocks and value stocks aren't separate sources of risk and return. The academic community is arriving at a different consensus, one that recognizes multiple independent risks. Investors might even have natural combinations of the different risk exposures that best suit their individual time horizons and preferences. As long as the portfolios they use to gain these exposures are index funds, and as long as the exposures are consistent and not timed to predict markets, this sort of portfolio structuring is not a "sector bet"it's the new face of indexing." Is there still value in the book-to-market ratio? 12/11/03   Permlink   Broken Link Value Investing "There is one advantage of BtM relative to its peers that should be mentioned. Since book value is a "stock" variable, while earnings, cash flow and sales are "flow" variables, there is a tendency for BtM rankings to be somewhat more stable over time than the rankings based on the other three variables. This reduces portfolio turnover for strategies that are based on BtM rankings. So, in addition to providing at least as much return dispersion as its competitors, BtM may also reduce the number of transactions that are triggered by stocks moving in and out of the portfolio's buy range. This can be especially important for taxable investors." The second largest tax investors pay 12/11/03   Permlink   Broken Link Funds "Well, let's face it -- nothing is worse than inflation. The Voluntary Graduated Financial Services Tax, however, can be a lot worse than the highest income tax rate. By my calculation, accepting an annual expense ratio of 1.39 percent on an equity mutual fund is the equivalent of accepting a 40 percent tax rate from the financial services industry. The amount you accumulate in 40 years will be only 60 percent of what you could accumulate if there were no financial service expense." SEC action on high-yield funds near 12/11/03   Permlink   Broken Link Funds "U.S. regulators are expected to bring an enforcement action as soon as today in their probe of mispricing of shares in high-yield bond mutual funds, people familiar with the matter said Thursday." Patenting air or protecting property? 12/11/03   Permlink   Broken Link Law "Universities, corporations and tens of thousands of Web site providers across the country probably never imagined they would be rooting for the pornography industry." Mutual funds or hole in the ground? 12/11/03   Permlink   Broken Link Funds "How times change. Today, mutual funds are the biggest financial scandal since Martha Stewart phoned her broker. What Martha did was entertaining, but not serious. This is serious. The only reason this scandal hasn't generated more popular outrage is that nobody can understand it." Watchdog says car dealer scams are rampant 12/10/03   Permlink   Broken Link Thrift "A report released Monday by Public Citizen, the consumer watchdog group founded by Ralph Nader, accuses the nation's car dealers of wholesale fraud and asks all state attorneys general to investigate." SEC to act against MFS 12/08/03   Permlink   Broken Link Funds "Sun Life Financial Inc. said Monday its U.S. mutual funds unit may face enforcement action by the Securities and Exchange Commission." Thoughtless reforms 12/08/03   Permlink   Broken Link Accounting "Somehow, proponents of the reforms believe that many recent financial failures could have been prevented by having various cross-checks on the accumulation system for accounting figures. Unfortunately, there are extensive holes in these suggested control-system reforms. Amazingly, the reformers have not grasped the enormity of investor distrust, and are trying to introduce simplistic, and sometimes worthless, proposals. The suggested control-system reforms appear to be based on the idea that every financial statement item will be double-checked. Such an idea runs counter to reality for many reasons." A faded green 12/07/03   Permlink   Broken Link World "How much further might the dollar fall? Predicting the future price of a currency is a mug's game. But there are good reasons to believe that over the medium term the dollar could drop a lot lower, especially against the euro. Whether that will have the desired effects, in reducing America's imbalances, or in causing the expected chaos in Europe's economies, is a different question." Rip-off room revisited 12/07/03   Permlink   Broken Link Thrift "Extended warranties, rust-proofing, Scotchgard: Is this stuff ever worth it?" Scrapped 12/07/03   Permlink   Broken Link World "George Bush has announced the dismantling of America's tariffs on imported steel, while promising to shield domestic companies from dumping. The tariffs have done their job, he says. Have they?" 12 tax tips to munch on 12/07/03   Permlink   Broken Link Taxes "Why do we call money dough? Everyone knows that dough tends to stick to your fingers, while money tends to slip through them. Good tax tips, on the other hand, can be a lot like doughnuts. If you try one, it could make life a lot sweeter. TIM CESTNICK serves up a dozen tasty year-end tax-planning ideas that could keep investors' wallets a little fatter and a little happier in 2004." The child molester next door 12/07/03   Permlink   Broken Link Real Estate "From the start we had vowed not to skip the inspection, despite prodding from our realtor. Yet by the time this house came on the market, we had already lost out to rival bidders on two other homes. In the first case we were outbid because another couple's escalation clause a stipulation in an offer that a buyer is willing to pay a certain amount above the highest bid up to a specified maximum beat ours by a few hundred dollars. We lost the second house because another buyer waived the home inspection outright. After that experience, we were tempted to throw caution to the wind. Thankfully we didn't." Big trouble for Big Pharma 12/05/03   Permlink   Broken Link Stocks "The industry's bloated overheads appear to be driving its decisions on the sort of drugs it seeks to develop. Like a supermodel who will not get out of bed for less than $10,000 a day, Big Pharma has decided that it is simply not worth investing in anything but a blockbuster. This means that lesser, albeit interesting, compounds fall by the wayside. An oft-quoted figure from the Tufts Centre for the Study of Drug Development puts the average cost of bringing a new drug to market at $897m. But as F.M. Scherer, an economist, points out, this is an average cost for big firms producing drugs for chronic diseases. Other firms can bring drugs for other complaintsinfectious diseases or rare conditions, sayto the market for around $100m-200m." Inside Operation Boris 12/05/03   Permlink   Broken Link Crime "It looked like a routine traffic accident on a wet Long Island highway. But it led investigators to a gigantic fraud they're calling the Big Organized Russian Insurance Scam." In defense of bank failures 12/05/03   Permlink   Broken Link Government "The American people have not seen widespread bank runs since 1933. In that object at least, the Federal Deposit Insurance Corporation has succeeded. But at what cost? To insure deposits is to invite bad bankingand worse; it is to foster reckless speculation and unsound investments, help make inflation permanent instead of intermittent, obstruct the curative powers of economic contractions, and divorce freedom from responsibility." Risks in 'buy low, donate high' 12/05/03   Permlink   Broken Link Taxes "Taxpayers prepared to gamble should brace for an audit. The history of tax shelters in Canada is always the same: loopholes are discovered by lawyers and accountants, and the early exploiters are their wealthy clients. By the time small investors get wind of the massive tax savings and government coffers are threatened, the department of Finance closes the loophole." A new charge called 'Oops' 12/04/03   Permlink   Broken Link Thrift "Every few years, economists identify another mutant variation of inflation to keep them awake at night. In the 1980's, it was stagflation. Three years ago, it was deflation. And now, meet the economic specter of the new millennium: stealth inflation." Ripples from a Japanese bank collapse 12/04/03   Permlink   Broken Link World "The Japanese government's November 30 decision to nationalize the insolvent Ashikaga banking group has surprised investors who had expected a Resona-style bailout - in which shareholders weren't forced to take a haircut for the mess. The move means that Ashikaga shareholders' capital will be wiped out, leaving them with nothing, and the government will take 100 percent of the equity in the regional lender." How fund scandals will serve fund owners 12/03/03   Permlink   Broken Link Bogle "It is the myriad conflicts between the interests of fund managers and the interests of fund owners that exist in this industry that bear so much of the responsibility for this staggering gap between the stock market's return and the returns earned by fund investors, and even the returns earned by the funds themselves. While the unacceptable, and partly illegal, market timing scandal has gained a great deal of well-deserved attention, it pales in significance when compared with the powerful impact of high costs on reducing fund returns, on the force of fund size in diminishing fund returns, and on the marketing focus that tempted too many investors to purchase funds that they now wish they had never bought." Stalking a wily prey at Disney 12/03/03   Permlink   Broken Link Management "By shooting for CEO Michael Eisner, Disney ex-board members Stan Gold and Roy Disney are taking on a crafty player who has lots of allies." Tax cuts may prove a mirage for AMT payers 12/03/03   Permlink   Broken Link Taxes "The tax cuts of 2003 may be a boon to the economy and provide welcome padding to some taxpayers' wallets, but for others those cuts will prove to be a mirage. That's because lower tax rates will push more people into paying the Alternative Minimum Tax, rendering some of those much-heralded breaks moot." The value view 12/02/03   Permlink   Broken Link Value Investing "Value managers come in many shapes and sizes. Some are more price focussed and are often drawn to cheap but troubled companies. While a notably larger camp, the GARP managers, conduct an ongoing search for the less typical combination of quality and price. This week is a summary of the opinions and views of what I feel are some of Canada's most skilled money managers." 12 tips for negotiating with debt collectors 12/01/03   Permlink   Broken Link Debt "It pays to know your rights and keep a record of all your communications when you butt heads with debt collectors. Here are some ways to hold your own." CIBC unit may face class action 12/01/03   Permlink   Broken Link Funds "The asset management arm of Canadian Imperial Bank of Commerce is the target of a proposed class action after it allegedly failed to disclose a change to a mutual fund that left investors exposed to the falling U.S. dollar." 3 more mutual fund scandals in the making 12/01/03   Permlink   Broken Link Funds "Reader e-mails tell me there's still more rot in the fund industry that's about to be exposed. Here's what could be next -- and what might happen to the industry as a result." I'd buy that for a dollar (and two dimes) 12/01/03   Permlink   Broken Link World "The euro is worth $1.20 for the first time in its history. That may hurt Europe. Will it help America?" Dow 10,000 is irrelevant 11/30/03   Permlink   Broken Link Markets "The index tells very little about stocks and not nearly enough about value. Dow stocks and stocks in general are priced for a perfect world -- in a world that's far from perfect." Trustmark, Walgreens join 'clean stocks' list 11/30/03   Permlink   Broken Link Stocks "The bad guys get all the headlines, but don't let them scare you into putting your money in the mattress. So far, the "Clean Stocks" project I launched last July has identified six stocks that are clean enough for investors who worry about the never-ending round of financial scandals, yet know they must stay in the markets to stand any chance of reaching their own financial goals." IRS revamps RRSP reporting 11/30/03   Permlink   Broken Link Taxes "The U.S. Internal Revenue Service has spared about 750,000 people in Canada and the United States from a tax-filing headache involving their Canadian registered retirement plans." A year-end registered plan checklist 11/30/03   Permlink   Broken Link Taxes "You don't have to make your 2003 contribution until March 1, 2004, but why wait? Avoid the rush in the new year, contribute today and get your money working." The seven deadly sins 11/29/03   Permlink   Broken Link Real Estate "In 1929 John D. Rockefeller decided it was time to sell shares when even a shoe-shine boy offered him a share tip. During the past week The Economist's economics editor has been advised by a taxi driver, a plumber and a hairdresser that "you can't go wrong" investing in housingthe more you own the better. Is this a sign that it is time to get out? At the very least, as house prices around the world climb to ever loftier heights, and more and more people jump on to the buy-to-let ladder, it is time to expose some of the fallacies regularly trotted out by so many self-appointed housing experts." Of sacrificial lambs, quacking ducks, and pigs 11/28/03   Permlink   Broken Link Markets "This is most unusual. Sure, in a bear market, one expects scandals of accounting, corporate governance, and fiduciary duty. But in the midst of a bull market, when everybody is suppose to get happy again, the scandals are coming thicker and faster." Honoring Benjamin Graham 11/27/03   Permlink   Broken Link Graham "We celebrate Benjamin Graham's 100th birthday--and the 60th anniversary of the publication of Security Analysis--by examining his investment philosophy. For this purpose, we rely heavily on The Intelligent Investor, which he considered more useful than Security Analysis to a young security analyst." Market prices right 11/27/03   Permlink   Broken Link Value Investing "So does Miller. His turnover is about 4% a year, meaning that his average holding period is 25 years. For an undervalued stock, the sweet spot is typically three to five years, and that period can include some scary corrections, Miller suggests. Meanwhile, the average mutual fund is turning over its portfolios entirely in 11 months, because, citing a lesson from behavioural economics, "people overwhelmingly overvalue current information," or what the analysts are saying now. Analysts rarely put a stock on their recommended list before it has shown signs of resurrection, by which time most investors have missed a significant portion of the rebound." Today, scandal is business as usual 11/27/03   Permlink   Broken Link Management "The scoundrels this year are taking advantage of business as usual, which is easy to do because the possible penalties seem so trivial." Research looks much as it used to 11/26/03   Permlink   Broken Link Brokers "Analysts obviously believe there's good potential for some energy and gold, which is sort of a contrarian call when you look at what these sectors have done lately. Then again, it's possible that these sectors are likely to generate lots of investment banking and underwriting business." Pensions: Still a problem 11/26/03   Permlink   Broken Link Accounting "With the stock market's big recovery this year, worries about faltering corporate pension plans have all but faded away. But the pension mess is still very much with us." To sell or not to sell 11/25/03   Permlink   Broken Link Value Investing "Ah, but all other things aren't always equal. Companies and industries change. New information surfaces. Assumptions can prove to be inaccurate. Stocks often decline for very good reasons, and you might be correct in concluding that there are better places for your capital, even though the stock has become cheaper. The key is figuring out which stocks are mistakes and which represent opportunity. That's not easy, but it is certainly much easier if you can overcome the natural human tendency to irrationality cling to losing stocks." Munger on human misjudgments 11/25/03   Permlink   Broken Link Value Investing "Behavioral finance -- which examines how people's emotions, biases, and misjudgments affect their investment decisions -- is one of the least discussed and understood areas of investing." Avoiding value traps 11/25/03   Permlink   Broken Link Value Investing "Companies and their stocks fall on hard times for any number of reasons. Sometimes hard times spell buying opportunities, other times you're better off keeping your distance. The hard part is telling the difference. Whitney Tilson shares some tricks of the trade." CCRA tax shelter donation arrangements 11/25/03   Permlink   Broken Link Taxes "As tax filing season approaches, you may see a growing number of advertisements for tax shelter donation arrangements. While donating various items to a charity (such as art, computers, and prescription drugs) is a legitimate way of making a charitable donation, you should be aware of the risks associated with certain donation arrangements." The greed disease 11/25/03   Permlink   Broken Link Brokers "The crux of his book was that work on Wall Street -- and more broadly in the financial services industry -- was different from other work because it was only about money. There was no product, no goal. There was nothing but the production of endless amounts of money. It tended to make a mess of people's lives." The invention of inflation-indexed bonds 11/25/03   Permlink   Broken Link Bonds "The world's first known inflation-indexed bonds were issued by the Commonwealth of Massachusetts in 1780 during the Revolutionary War. These bonds were invented to deal with severe wartime inflation and with angry discontent among soldiers in the U.S. Army with the decline in purchasing power of their pay. Although the bonds were successful, the concept of indexed bonds was abandoned after the immediate extreme inflationary environment passed, and largely forgotten until the twentieth century. In 1780, the bonds were viewed as at best only an irregular expedient, since there was no formulated economic theory to justify indexation." Putnam: The greed machine 11/25/03   Permlink   Broken Link Funds "If you're like most investors, you probably think that the insider trading scandal at Putnam Investments, the nation's fifth-largest fund company, is a sordid but simple tale of portfolio managers picking investors' pockets." A nimble, cheap and safe ETF portfolio 11/25/03   Permlink   Broken Link Indexing "They're easier to trade than mutual funds, less risky than stocks, and more impervious to fraud than either, making them perfect for the flexible portion of your portfolio." Ottawa eyes charitable tax shelter 11/25/03   Permlink   Broken Link Taxes "10,000 donors audited or reassessed in crackdown. As the year-end tax shelter season goes into overdrive, Ottawa's tax collectors are about to issue a stern warning to investors considering arrangements based on charitable donations or "gifting."" Beating expectations is the same old con 11/24/03   Permlink   Broken Link Markets "Tech companies and analysts still are distorting numbers to make a rough period look like a recovery. It's just more of the kind of rot that almost no one, including the SEC, seems to mind." Mutual fund abuses found in Canada 11/24/03   Permlink   Broken Link Funds "A U.S. economist who tracked mutual fund abuses in the United States says there is evidence of similar trading problems occurring in Canada." Creditors take on Kmart's "frat boys" 11/23/03   Permlink   Broken Link Management "The former top managers are being sued for "gross mismanagement" and taking lavish perks even as the retailer's bankruptcy loomed" Bearish Merrill strategist under fire 11/23/03   Permlink   Broken Link Brokers "Amid a rising tide of complaints, Merrill Lynch & Co.'s chief U.S. strategist, Richard Bernstein, is seeking to defend his bearish view of the stock market from investors who believe he is hopelessly wrong." The SEC makes dishonesty pay 11/23/03   Permlink   Broken Link Government "Providing a veneer of honesty, feeble standards let brokerages and traders get away with millions without breaking the letter of the law." The real costs of turnover 11/23/03   Permlink   Broken Link Funds "Not surprisingly, the most active group trailed the least active group by an average of 5.5% per year. And this doesn't even consider the effect of taxes, which were surely significant. For individual investors and mutual funds alike, the message is clear -- low turnover equals better performance." Break the poverty mentality for a good cause 11/23/03   Permlink   Broken Link Taxes "When it comes to charitable giving, many of us tend to fall short. Some of the numbers published by the Canada Customs and Revenue Agency may surprise you. Of those who reported between $50,000 and $70,000 of income on their tax returns in 2000, 49.7 per cent claimed charitable donations, and they gave an average of 0.67 per cent of income to charity. Between $70,000 and $100,000, 59.5 per cent claimed donations, and gave an average of 0.76 per cent of income. Finally, 69.3 per cent of those earning more than $100,000 claimed donations in 2000, and gave an average of 1.4 per cent of income to charity." In the long run we are all broke 11/22/03   Permlink   Broken Link Bonds "Investors have good reason to worry about states defaulting on their loans: Argentina and Russia provide chastening recent reminders. But both were dysfunctional economies with troubled political pasts. Surely, there is no need to worry about the indebtedness of the governments of stable, advanced countries?" Fed up with protectionism 11/22/03   Permlink   Broken Link World "The current-account deficit is benign, says Alan Greenspan, but protectionism is dangerous. America's garment makers do not agree. Its European creditors may be having second thoughts too" Tell it like it is 11/22/03   Permlink   Broken Link Accounting "The time has come to change the way we design corporate pension plans, and here are seven concrete suggestions to help employers reduce their risk If you don't have a pension plan, don't start one" The value of a fee-based advisory relationship 11/21/03   Permlink   Broken Link Brokers "Instinctively, well-heeled people are far more favourably inclined to work on a fee basis because they understand the business model and how it both aligns interests and embeds transparency. Quite apart from the ethical perspective, there are sound tax reasons for working on a fee basis, too." The dragon binges 11/21/03   Permlink   Broken Link World "Companies around the world, it seems, have caught China fever. When the fever breaks, there could be hell to pay." The horse is dead 11/21/03   Permlink   Broken Link Accounting "I have spent most of my professional life trying to make defined benefit pension plans work -- for members as well as for shareholders. But as time passes and the pension system matures, the risks become harder to manage and the complexities harder to endure. And I wonder: Is there not a better way?" Wall St. Journal 'Buffetted' 11/21/03   Permlink   Broken Link Buffett "The article focused on the difference between the mere $2,264 in taxes Buffett pays on a $4 million house he bought in Laguna Beach, California, in the early 1970s, and the $14,401 taxes he pays on his home in Omaha, Nebraska, which Buffett believes is worth $500,000." Take your medicine 11/20/03   Permlink   Broken Link Stocks "Somebody pass the antidepressants. We have an aging population clamouring for life-saving drugs, we are up to our deteriorating eyeballs in medical breakthroughs, and yet, in these days of generic knock-offs and cut-rate Internet pharmacies, there isn't a major manufacturer in the pharmaceutical business that hasn't had the solid biological waste kicked out of its market cap at some point in the past two years." The hard sell for reverse mortgages 11/20/03   Permlink   Broken Link Debt "Mandatory mortgage insurance ensures that you (or your heirs) don't end up owing more than the house is worth. But it's entirely possible to drain all or most of your home's equity." Bubble junior 11/19/03   Permlink   Broken Link Dreman "There is a bizarre psychological effect overtaking the market these days, where crummy stocks are treated well and good stocks badly. Sound familiar?" When to buy, when to sell 11/19/03   Permlink   Broken Link Grant "If you bought low, now that the stock market has risen again, do you sell high? Or wait for it to go still higher? One problem: The market might not get much higher." Joined at the hip 11/19/03   Permlink   Broken Link Indexing "A few years ago Barclays Global Investors did the unthinkable when it released a wide array of U.S. stock ETFs that actually undercut the expense ratios of several comparable Vanguard index funds. Ever since, Vanguard, BGI, State Street Global Advisors, and other ETF providers have waged a public relations battle for the 'hearts and minds' of investors and advisors who use funds tied to popular benchmarks." A shot in the arm for drug makers 11/18/03   Permlink   Broken Link Stocks "The latest version of the Medicare prescription benefit bill is just what the pharmaceutical sector ordered. Here's why drug makers may finally be on the road to recovery." The oh-oh 00s 11/18/03   Permlink   Broken Link Markets "Bull and bear, terror and war--we're living through some spooky times" The scandal may get much worse 11/18/03   Permlink   Broken Link Funds "Illegal behavior at funds is so longstanding and pervasive, rising to the highest levels in many cases, that some fund firms could very well 'crumble' as investigations proceed, says one plugged-in independent investigator." Fund scandals for dummies 11/18/03   Permlink   Broken Link Funds "There's some reason for confidence. Late trading is less likely in Canada because of FundServ, an intermediary that has been executing fund purchases or sales since 1993. If you buy fund units after markets close at 4 p.m., they are priced at the 4 p.m. close the following day, says FundServ CEO Alan Hutton. That stops investors from profiting from "stale" prices: buying after the market has closed, as has occurred in the U.S." How we take from rich and give to poor 11/17/03   Permlink   Broken Link Government "It's time for that annual bit of nasty business -- the who-pays-who-gets update on the financial workings of Confederation. Once a year, after Statistics Canada produces its provincial economic accounts, we tally the manner in which Ottawa takes from the rich provinces and gives to the poor. The data tell residents of each province and territory whether they are a net contributor to the national public purse or a net beneficiary." The skinny on weight watchers 11/17/03   Permlink   Broken Link Stocks "Popular low-carb diets have dented its stock, but stout fundamentals and a solid long-term outlook may make this a buying opportunity" All roads now lead to inflation 11/17/03   Permlink   Broken Link Markets "The Fed's espresso-strength intervention is going to reignite prices and may endanger the recovery. What's unknown: how big the next bust will be and who will get hurt." Bigger fund ripoffs exist than illegal trading 11/16/03   Permlink   Broken Link Funds "It's fascinating to watch the regulators tie themselves in knots to investigate the fund sector. As usual, they're getting only part of the picture. Illegal late trading is a scandal, sure -- but so are many of the things fund companies do every day that are perfectly legal." A closer look at investment fees 11/16/03   Permlink   Broken Link Funds "Only time will tell whether or not index products out-perform actively managed products. They areuseful tools for certain types of investors who seek alternatives to active management. Yet, it is not unreasonable to conclude that above-average, low-fee, actively managed products stand a strong chance of providing superior returns." Sparks fly over steel 11/14/03   Permlink   Broken Link World "The looming trade war over America's steel tariffs may yet be averted thanks largely to an expected surge in global steel prices" Some mutual fund firms just don't get it 11/13/03   Permlink   Broken Link Funds "The thing about scandals is they usually blow over. So the Canadian mutual fund companies that have been hiding from the U.S. mutual fund industry scandal will probably make out fine. Odds are pretty good that the sort of trading abuses that several U.S. fund companies have allowed will turn out to be rare or non-existent in Canada. Any risk of an investor backlash will melt away. Or not." Business has become a real mob scene 11/13/03   Permlink   Broken Link Management "Next, try this out: Does your company manage earnings, and do you participate in any way? Are you thus failing to represent your company's financial condition fully and fairly defrauding investors in the context of the Sarbanes-Oxley era? And are you benefiting financially, since Wall Street rewards smoothly rising profits, and you hold stock options?" Beat it boss, I'm playing a game 11/12/03   Permlink   Broken Link Fun "Rejoice, my fellow corporate drones, you need no longer hide behind your monitor at work as you sneak in a game of solitaire!" A few small-cap values 11/12/03   Permlink   Broken Link Funds "Mr. Tattersall is the lead manager of the Saxon Small-Cap Fund. Founded in 1985, Saxon Mutual Funds is owned and managed by Howson Tattersall Investment Counsel, and is widely recognized as one of Canada's premier value-oriented investment firms. The fund invests primarily in TSX listed small-cap Canadian stocks with a market capitalization (share price * number of shares outstanding) of less than $300 million." What's Buffett up to? 11/12/03   Permlink   Broken Link Buffett "Warren Buffett's Berkshire Hathaway sells everything from Blizzards to long underwear. But Buffett has also been trying his hand at peddling something else entirely: influence." How mutual funds stole your money 11/12/03   Permlink   Broken Link Funds "While your shares were handcuffed by 4 p.m. closing prices, others could wait for hours -- sometimes the next day -- before swooping in on good or bad news to make a killing." The only company Wal-Mart fears 11/12/03   Permlink   Broken Link Stocks "The nimble first mover can outrun the powerful colossus; the innovator can stay a jump ahead of the imitator; the quality of leadership can trump the quantity of resources. "Here's the difference between Sam's and Costco," says Charlie Munger. "We have a live Sam Walton who's still there, and Wal-Mart doesn't."" Hey, shoppers: ads on aisle 7! 11/11/03   Permlink   Broken Link Stocks "Forget the Big Three. Wal-Mart's TV network is cleaning up." Up against the wall 11/11/03   Permlink   Broken Link Funds "Dick Strong runs his mutual fund firm with a raging passion. And passion can get you into a lot of trouble." I quit! 11/11/03   Permlink   Broken Link Management "Overworked employees are fed up: a survey finds 8 out of 10 Americans want a new job." The battle for Buffett's picks 11/10/03   Permlink   Broken Link Buffett "I have noticed that Warren Buffett does not buy stock of companies listed on the Nasdaq. What are the differences between the exchanges, and why might Buffett prefer companies listed on the New York Stock Exchange over Nasdaq-listed firms?" Your home: Worst-case scenario 11/10/03   Permlink   Broken Link Real Estate "Will rising interest rates unravel all of the gains of the recent housing boom?" The bull is back! 11/10/03   Permlink   Broken Link Value Investing "It's true. Just ask your local broker. Listen to the cheery business commentators on the television and radio. Better still ask your boy genius fund manager; he too believes that it's true. Listen closely ... all you will hear is bull." Big 3 seek pension relief 11/10/03   Permlink   Broken Link Government "The proposal stunned a crowd of automotive executives gathered for a recent conference in West Virginia. Conservative David Stockman, the former Reagan administration budget czar and now head of a Metro Detroit auto parts maker, suggested the federal government take over the under-funded pension plans of U.S. automakers and auto parts suppliers." Nobody sues in a bull market 11/10/03   Permlink   Broken Link Brokers "'Rogue clients' try to blame their advisor for their losses "People don't sue when they're making money." That's a direct quote from a lawyer who specializes in defending investment advisors from "rogue clients."" Inexcusable 11/10/03   Permlink   Broken Link Indexing "Founder and former CEO of The Vanguard Group John Bogle has been speaking out for the past several years against bad trading practices in his industry. Suddenly, a lot of people are listening" 9 ways to look rich but live cheap 11/10/03   Permlink   Broken Link Thrift "Rise above your measly income and worn-out shoes. You can live the Simply Fabulous lifestyle and enjoy cushy perks even without being adopted by the Rockefellers." Playing different games 11/10/03   Permlink   Broken Link World "Central bankers in Sydney and London share similar hopes and fears. On the one hand, their interest-rate decisions represent two votes of confidence in the world economy. America, an important trading partner for both countries, is growing strongly. Japan, the most important trading partner for Australia, is also showing signs of a durable recovery. With growth robust, the motivation for low interest rates is less obvious, and their disquieting consequences more apparent. When you make borrowing cheap, people do more of it. In Australia, consumer debt is growing by more than 20% per year. In Britain, total lending to individuals was 14% higher in September than it had been the year before." Graham Stocks in Short Supply 11/10/03   Permlink   Broken Link Stingy Investing Over the past three years, I've used Benjamin Graham's time-tested strategy for defensive investors to uncover undervalued stocks. So far, the results have been extraordinary with significant gains each year. Darlings of the Dow 11/05/03   Permlink   Broken Link Value Investing "The bottom line is that low price-to-sales ratios and low 12-month forward price-to-earnings ratios are the best measures of value. The five stocks scoring highest on these metrics rallied an average of 20% from October through nine months out between 1976 and 2003." Unequal justice: Can the NYSE police itself? 11/05/03   Permlink   Broken Link Crime "A small transgression can get a broker banned for life, but a well-connected floor specialist who costs investors millions may get just a slap on the wrist." Investor Behavior = Returns 11/04/03   Permlink   Broken Link Funds "What has the largest impact on the returns individual investors get? Is it the actual investments they own, or their own behavior?" Say goodbye to refi madness 11/04/03   Permlink   Broken Link Economy "Clearly, the end of the refi boom is here. Drawing on data from the Mortgage Bankers Assn. and Freddie Mac Corp., BusinessWeek estimates that the number of applications for cash-out refis has fallen about 50% since the refi peak at the end of May. At the same time, housing prices are rising more slowly, so there's less new wealth for homeowners to extract. The Office of Federal Housing Enterprise Oversight home price index rose at an annual rate of just 3.1% in the second quarter -- down from 8.8% a year earlier and the smallest increase since 1996." Buffett, screaming value and the DCF 11/03/03   Permlink   Broken Link Buffett "The lack of precision around valuation makes a lot of people uncomfortable. To deal with this discomfort, some people wrap themselves in the security blanket of complex discounted cash flow analyses. My view of these things is best summarized by this brief exchange at the 1996 Berkshire Hathaway annual meeting: Charlie Munger (Berkshire Hathaway's vice chairman) said, "Warren talks about these discounted cash flows. I've never seen him do one." "It's true," replied Buffett. "If (the value of a company) doesn't just scream out at you, it's too close."" The contradictions Of Warren Buffett 11/03/03   Permlink   Broken Link Buffett "Warren Buffett is not Warren Buffett. In recent editions of Barron's and Fortune, the legendary US investor contradicts three viewpoints long associated with his long-term stock market approach. Here's a rundown of what Buffett has declared in the past, and what he's now saying" Cult of accountability 11/03/03   Permlink   Broken Link Management "Does employee training pay off? Accounting techniques and science-inspired metrics evaluate return on investment" Job-creation schemes don't work 11/03/03   Permlink   Broken Link Taxes "Free-market economists like myself attack government tax-and-spend policies as being damaging to prosperity, accusing the government of "sucking money" or "leeching resources" out of the economy. We claim that taxes damage not only the welfare of the person from whom they are taken, but the whole country." Hot water for Prudential Securities? 11/01/03   Permlink   Broken Link Brokers "Massachusetts' securities regulator is set to charge six brokers -- and maybe the firm itself -- with deceptive trading practices" Worrying about jobs isn't productive 11/01/03   Permlink   Broken Link World "Yes, the U.S. is losing factory jobs; so is the rest of the world. Here's why we shouldn't sweat." Perigee changes name to Legg Mason Canada Inc. 10/31/03   Permlink   Broken Link Funds "Perigee Investment Counsel Inc. is changing its name to Legg Mason Canada Inc. to reflect the money manager's purchase three years ago by Baltimore-based Legg Mason Inc." Substantial savings result when tax planning's a family affair 10/31/03   Permlink   Broken Link Taxes "If your family is like mine, they'll drive you crazy from time to time. But cut them some slack. Without their help, you could be paying a lot more tax. That's right, when a family works together to reduce each member's tax burden, the result can be significant dollars saved." Sceptre rushes to reassure jittery clients over Putnam 10/31/03   Permlink   Broken Link Funds "Sceptre Investment Counsel Ltd. is scrambling to reassure jittery clients after news that two of four portfolio managers fired by U.S.-based Putnam Investments for allegedly profiting from improper trading helped to run two pooled funds for institutional clients in Canada." 5 market shockers lurking in the shadows 10/31/03   Permlink   Broken Link Markets "Boo! Next time some ghost or goblin jumps out of the shadows at you, think about what Halloween teaches us about investing. Nothing is truly scary unless it's unexpected." Vlad the impaler 10/31/03   Permlink   Broken Link World "This is not, however, George Bush's America; it is Vladimir Putin's Russia. The businessman, Russia's richest, is Mikhail Khodorkovsky, the chief executive and biggest shareholder of Yukos, Russia's largest oil company, who was spectacularly seized on October 25th aboard his own aircraft in Siberia. President Putin insisted that the arrest was a normal function of the country's judicial system, in which he neither could nor should interfere. But everybody knows that, in Mr Putin's Russia, the taking of such a big fish has nothing to do with business misdeeds, still less with justice, and everything to do with politics and the Kremlin's control. And that is why Mr Khodorkovsky's arrest, along with the rumoured departure of the Kremlin's chief of staff, Alexander Voloshin, one of Mr Khodorkovsky's sympathisers, are so ominous." The big candyman 10/31/03   Permlink   Broken Link Stocks "'Trick or treat?', once an American question, is now a feature of Halloween celebrations everywhere. As a result, October 31st has become the global high point of the confectionery year, as millions of children dress up as ghosts, goblins or Britney Spears to be rewarded with vast amounts of teeth-rotting goodies. This year, confectioners expect to generate Halloween sales of $2 billion in America alone. Last year, the country's total confectionery sales were $24 billion - the highest anywhere." Inside out 10/30/03   Permlink   Broken Link Crime "When it comes to filing insider trading reports, the rules are somewhat sketchy" Worst drivers: Teens, doctors, lawyers 10/30/03   Permlink   Broken Link Insurance "It shouldn't surprise you that students get in more car wrecks than those in any other occupation. They're inexperienced and lack a healthy dose of fear. Lucky for them that a doctor is likely to be at the scene. Medical doctors rank second in accident rates." Clients can be greedy too 10/30/03   Permlink   Broken Link Brokers "Some clients may deliberately misrepresent their investment experience and risk tolerance to make aggressive gambles on the market. If the bet doesn't go their way, they sue the advisor. More often than not, advisors find it cheaper to settle, since errors and omission insurance will pay most of the bill." The fund industry is broken 10/29/03   Permlink   Broken Link Funds "And it can't be fixed without some major changes. But there are some key questions you can ask the fund companies you deal with to protect yourself." SEC cracks down on Putnam for self-dealing 10/29/03   Permlink   Broken Link Funds "The U.S. Securities and Exchange Commission has announced civil actions against Putnam Investment Management LLC and two former Putnam managing directors and portfolio managers, Justin Scott and Omid Kamshad, in connection with their personal trading in Putnam mutual funds." Counterfeit new $20s debut 10/29/03   Permlink   Broken Link Crime "Less than a month after the release of new $20 bills with features designed to deter forgeries, counterfeiters are already at work." Warren Buffett speaks his mind 10/29/03   Permlink   Broken Link Buffett "The man who as a boy collected and sold used golf balls, started a pinball machine business in high school, and later stepped in as the interim chairman and chief executive of Salomon Brothers for an annual salary of one dollar, rolled into town last week full of the honesty, insightfulness and good humor for which he is known and revered." What you don't know about Dell 10/29/03   Permlink   Broken Link Stocks "A look at the management secrets of the best-run company in technology." Your 'government' fund may hold hidden risk 10/28/03   Permlink   Broken Link Bonds "The Securities and Exchange Commission fired a broadside into the mutual fund mess last week, admonishing "government" bond funds to be more forthright in acknowledging the risks they take, notably by investing in mortgage-backed securities." Buffett's major currency investment 10/28/03   Permlink   Broken Link Buffett "Fortune magazine said in a press release Monday that in an article to be published in the Nov. 10 issue of the magazine, Buffett writes, 'To hold other currencies is to believe that the dollar will decline. Both as an American and an investor, I actually hope these commitments prove to be a mistake.'" The 2003 Nobel Prize in economics 10/28/03   Permlink   Broken Link Economics "Two economists who have developed statistical techniques to track economic trends and to measure investment risk Clive Granger and Robert Engle were this year awarded the Nobel Prize in economics. In this article I will be focusing on the contribution of Clive Granger to economics. According to the Nobel committee Granger's important contribution to economic science is his discovery of a phenomenon called cointegration. This discovery, so it is held, enables economists to accurately validate relationships among various economic data. So what is it all about?" Gold gives boost to small-cap sector 10/28/03   Permlink   Broken Link Funds "Of the outperformance of junior mining companies and other more speculative stocks, Ferguson says: "Investors in the small-cap area have been focusing on companies that do well in environments of strong economic growth. They seem to be, he says, downplaying the possibility of other scenarios such as slower economic growth, he says." Still waiting for lower fund fees 10/28/03   Permlink   Broken Link Funds "Investors losing patience as cuts fail to materialize. Canada's sky-high mutual fund fees are again under the microscope. As reported in yesterday's Financial Post, management expense ratios (MERs) have soared the last three years." Pass the Coke! 10/27/03   Permlink   Broken Link Buffett "Buffett said that Berkshire has paid, on average, about seven times pretax earnings for its acquisitions, an attractive price given current stock-market valuations. The Standard & Poor's 500 index trades for nearly 20 times projected 2003 operating profits and for 13 to 14 times pretax earnings. The company's notable acquisitions have included Shaw Industries, the leading U.S. carpet manufacturer; Benjamin Moore, the paint producer; Johns Manville, which makes insulation, roofing and other materials; and 80% of Mid-American Energy, an Iowa-based utility with large interests in the U.K." Wal-Mart keeps the change 10/27/03   Permlink   Broken Link Stocks "Suppliers pay for new technology, but Bentonville really benefits." Recovery fears muffle earnings 'cheers' 10/27/03   Permlink   Broken Link Value Investing "Trouble percolates beneath a budding prosperity, but you'd never know it by listening to dead-fish analysts. Their chronic cheerleading in this earnings season can't alter the truth." Shadow on the funds 10/27/03   Permlink   Broken Link Funds "Widening probes into the practices of U.S. mutual funds are uncovering a surprisingly large number of abuses, conflicts of interest and other irregularities, many of which have benefited wealthy clients at the expense of small ones." Nanopower 10/26/03   Permlink   Broken Link Academia "converting gravity into electricity has involved building huge dams to tame vast rivers at great expense and no little environmental cost. But a group of researchers at the University of Alberta, in Canada, thinks the whole process can be scaled down to something that will fit on a table." Time to chuck commissions? 10/26/03   Permlink   Broken Link Brokers " A growing trend toward fee-based financial advice has both benefits and pitfalls for investors" Mutual funds weather scandals 10/26/03   Permlink   Broken Link Funds "We at the Fool have also reported on these developing scandals. In fact, we've been warning investors for many years about various problems inherent in mutual fund investing. We've railed against such problems as their outlandish fees, overdiversification, below-average performance, and counter-productive, short-term thinking." Notes from Berkshire Hathaway & Wesco meetings 10/26/03   Permlink   Broken Link Buffett Columns and notes from 2000 to 2003 The end of the Oil Age 10/24/03   Permlink   Broken Link World "Ways to break the tyranny of oil are coming into view. Governments need to promote them." The bad apple data base 10/24/03   Permlink   Broken Link Brokers "IDA's online search helps investors, deters violators. It just got easier for investors to check out whether their financial advisors or their firms are 'bad apples.'" Triumph of the pygmy state 10/23/03   Permlink   Broken Link Law "Despite the many business scandals in America, Delaware's amazing grip on corporate law is set to endure" The U.S. and Canada: time to make up 10/23/03   Permlink   Broken Link World "Canada is an enigma -- so important to the U.S. and yet so ignored. As much annual trade flows across the Ambassador Bridge linking Windsor and Detroit as between the U.S. and either Japan or China. In fact, roughly $1 million in trade a minute passes between the two countries every year, according to trade group Canadian Manufacturers & Exporters." Industry muzzles its victims 10/23/03   Permlink   Broken Link Brokers "Gag orders keep bad advisors' names out of the press. One of the frustrations with this job is some of the most potentially instructive stories can't be made public. Since the stock bubble of 1999 burst, many tales of investor abuse involving leveraged loans have come to my attention." Your condo, your money pit? 10/22/03   Permlink   Broken Link Real Estate "Though condo values have been rising, they historically have been much more volatile than single-family home values. Worse, living in a condo can be maddeningly complex -- and costly." Choose beneficiary carefully to save tax 10/22/03   Permlink   Broken Link Taxes "Naming your estate as beneficiary of your RRSP can make sense where you have capital losses and expect to have insufficient income in your year of death to use up those losses." Income trusts are not created equal 10/22/03   Permlink   Broken Link Trusts "Ask any investment dealer -- income trusts have been the only game in town in the past couple of years. That's not surprising, given their generous distributions, the steady price appreciation in the group as a whole and some pretty impressive tax breaks to boot. But don't walk away thinking all income trusts offer juicy tax-efficient cash flow. They don't." 6 rules for buying back-from-the dead stocks 10/22/03   Permlink   Broken Link Value Investing "Like spooky goblins knocking at your door on Halloween night, many companies fresh from the nether world of bankruptcy are trading in the market again, vying for a place in your portfolio. But are they offering tricks or treats?" Dividend policy and market movements 10/22/03   Permlink   Broken Link Value Investing "Using S&P 500 monthly returns as a proxy for market conditions, we investigate whether investors prefer dividend-paying stocks to non-dividend-paying stocks in declining markets. We find that dividend-paying firms have higher returns than non-dividend-paying firms, especially in declining markets. These results are robust for adjustments for risk using CAPM adjusted deciles, CAPM excess returns, the Fama-French three-factor model, and dividing the sample into size and book-to-market quartiles. Furthermore, we find that the simple payment of dividends, and not the level of the dividend yield, drives returns' asymmetric behavior relative to market movements, consistent with the signaling hypothesis of dividends." The Superinvestors of Graham and Doddsville 10/21/03   Permlink   Broken Link Buffett "'Superinvestor' Warren E Buffett, who got an A+ from Ben Graham at Columbia in 1951, never stopped making the grade. He made his fortune using the principles of Graham & Dodd's Security Analysis. Here, in celebration of the fiftieth anniversary of that classic text, he tracks the records of investors who stick to the 'value approach' and have gotten rish going by the book." College costs take another leap 10/21/03   Permlink   Broken Link Academia "College costs once again have increased far faster than inflation, with tuition at state schools posting the biggest increase in 30 years, the College Board reported Tuesday." Sharing his wealth 10/20/03   Permlink   Broken Link Buffett "The world's second-richest man came to the University of Tennessee and gave students degrees, stock and advice Tuesday." How cheapskates get away with it 10/20/03   Permlink   Broken Link Thrift 10 classic cheapskate strategies. Mutual recriminations 10/20/03   Permlink   Broken Link Funds "A former fund manager has admitted to obstructing an investigation into improper mutual-fund trading, making him the first executive to face a criminal charge in the rapidly widening probe into the industry's practices" Indexing: new, improved newness 10/19/03   Permlink   Broken Link Indexing "Once a steady-as-you-go approach to an untamable market, indexing now has Wall Street busy offering expensive imitations and some not-so-reasonable facsimiles" Templeton feeling bearish 10/19/03   Permlink   Broken Link Markets "The legendary investor predicts the U.S. dollar will lose 40 percent of its value." 5 ways to stop the urge to shop 10/18/03   Permlink   Broken Link Thrift "If you can still pay your bills, you might not think you have a problem. I didn't think I had a problem, either -- until I asked myself why buying shoes felt so good." Easy Chair formula is hard to beat 10/17/03   Permlink   Broken Link Indexing "The iG5 is a welcome addition to the ETF world - ticker symbol on the Toronto Stock Exchange is XGV. It holds a single government of Canada five-year bond. As new money comes into the fund and existing five-year holdings mature the identical bond is purchased again and again. A big advantage of iG5s for a passive portfolio is the low management expense ratio (MER). The MER on iG5s is just .25 per cent. Compare that to the average bond fund MER of 1.6 per cent and imagine how quickly that additional one and a half per cent will eat away at a fund's performance." Still counting the cost 10/17/03   Permlink   Broken Link Accounting "The lack of competition poses vexing problems. Chief among these, perhaps, is that the Big Four may all be too big to be allowed to fail. The point is not merely theoretical. In Britain, where auditors' liability is uncapped, a colossal lawsuit hangs over Ernst & Young, in relation to Equitable Life, a mutual insurer. In America Adelphia, a bust cable company whose former bosses are due to stand trial in January, is suing Deloitte & Touche." Fee rise says watch out for hidden RRSP costs 10/16/03   Permlink   Broken Link Brokers "You're not just buying an investment when you put Royal Bank of Canada GICs and mutual funds into your registered retirement savings plan. You're also buying a relationship that you can't get out of without paying $50." Making CEOs pay for bogus books 10/16/03   Permlink   Broken Link Management "Boards must find the backbone to end the cronyism that lets corporate chieftains retain compensation based on fictional earnings" The forgotten payroll tax 10/16/03   Permlink   Broken Link Taxes "According to Boston University economist Laurence J. Kotlitoff, 18-year old workers who earn average incomes over their lifetimes will "contribute" $723,591 in taxes (in present value dollars). They will receive about $140,000 in benefits! What private sector retirement program has an egregious record such as that? And even when it does, one can always withdraw from it or transfer to another program. Try withdrawing from Social Security and see what happens!" The return of dividends 10/15/03   Permlink   Broken Link Value Investing "All sorts of companies are getting into the payout act. One reason: The new tax law makes it a cheaper way for execs to collect" Hard money 10/15/03   Permlink   Broken Link Government "Money used to be backed by gold. Now it is backed by the promises of central bankers. Are these worth less than they were?" So who's stealing China's manufacturing jobs? 10/15/03   Permlink   Broken Link Economy "Carson's investigation found that only five of the 20 countries increased manufacturing jobs between 1995 and 2002. Three of the five -- Canada, Mexico and Spain -- ``seem to have benefited from regional trade pacts or currency agreements,'' he says." A pork dinner for multinationals 10/14/03   Permlink   Broken Link Government "The U.S. international tax code is a mess -- and the big rewrite Congress is wrapping up will only make the corporate giveaways worse." The poverty of poverty statistics 10/14/03   Permlink   Broken Link Economics "Finally, the official poverty statistics take no account of the goods people own or the assets they have accumulated. Which means that a person who has accumulated a million dollars worth of goods and assets but whose income, for whatever reason, falls below the income threshold for the year will be classified as poor. An extreme case? Not so extreme. Researchers have discovered that almost one million people classified as poor own homes worth more than $150,000, while upwards of 200,000 people classified as poor own homes worth more than $300,000." Herding psychology and financial markets 10/13/03   Permlink   Broken Link Academia "Despite giving all the participants the same perfect knowledge of coming dividend prospects and then an actual declared dividend at the end of the simulated trading day, which could vary more or less randomly but which would average a certain amount, the subjects in these experiments repeatedly created a boom-and-bust market profile." This corporate reform falls far short 10/12/03   Permlink   Broken Link Government "An SEC proposal to allow shareholders to nominate board members is so restrictive that it does nothing to advance corporate democracy" The professional financial advisor 10/12/03   Permlink   Broken Link Brokers "Perhaps the biggest sacred cow in the industry right now is the notion of independence. Since virtually all advisors receive their compensation through some form of embedded compensation, it could be argued that virtually no one in the industry (please don't call it a profession yet) is truly independent. Arguments about proprietary vs. non-proprietary funds are just plain silly. The more meaningful distinction is between embedded compensation and unbundled compensation. It is only through the latter that consumers can feel confident that the recommendations being made are truly in their own best interests. This means that commissions and trailing commissions have to go- and the sooner the better." SEC unveils plans to combat late trading of funds 10/12/03   Permlink   Broken Link Funds "The regulator is considering new rules and rule amendments designed to prevent late trading abuses. It is examining the feasibility of requiring that the fund (rather than an intermediary such as a broker-dealer or other unregulated third party) must receive the order prior to the time the fund prices its shares for an investor to receive that day's price." Time to unhitch that trailer 10/12/03   Permlink   Broken Link Brokers "Leemhuis's inspiration was to replace the floating expense of $1,000 per annum with the fixed $360/year subscription fee. In the above example, the $1,000 trailer fee is rebated to the client. On a net basis, the client is ahead $640. Since the average portfolio at ASL is $250,000, the savings are often more than that." Unmarried America 10/12/03   Permlink   Broken Link Economics "Say good-bye to the traditional family. Here's how the new demographics will change business and society." Nobelists with 20/20 hindsight 10/10/03   Permlink   Broken Link Academia "Winners Clive Granger and Robert Engle gave economists new glasses for evaluating the past data from which predictions are drawn" Where's the stick? 10/09/03   Permlink   Broken Link Management "The highest-profile cases of excessive pay, unfortunately, are not isolated exceptions. Bosses' pay has moved inexorably upwards, especially in America. In 1980, the average pay for the CEOs of America's biggest companies was about 40 times that of the average production worker. In 1990, it was about 85 times. Now this ratio is thought to be about 400. Profits of big firms fell last year and shares are still well down on their record high, but the average remuneration of the heads of America's companies rose by over 6%." They should call it revenue season 10/09/03   Permlink   Broken Link Markets "After watching earnings climb over the last two quarters thanks to cost-cutting, Wall Street wants to see top-line growth to indicate that business has turned around." Newsletter publishers get their day 10/09/03   Permlink   Broken Link Newsletters "Lowry's victory in $20 million copyright lawsuit likely to help protect all newsletter publishers." David Dreman, Maharajah of the multiples 10/07/03   Permlink   Broken Link Dreman "From 1970 through 1996 the market returned 14.9 percent. But high relative dividend stocks provided a return of 17.0 percent; low relative price to book value stocks returned 17.8 percent; low relative price/earnings stocks returned 17.7 percent; and low relative price to cash flow stocks returned 18.4 percent. (In each case the stocks were ranked relative to their specific industry.)" Payday Loans = Costly Cash 10/06/03   Permlink   Broken Link Debt "The ads are on the radio, television, the Internet, even in the mail. They refer to payday loans - which come at a very high price." MIT's OpenCourseWare 10/06/03   Permlink   Broken Link Academia "With the publication of 500 courses, MIT OCW offers educational materials from 33 academic disciplines and all five of MIT's schools" Is your fund firm earning its keep? 10/05/03   Permlink   Broken Link Funds "Wanted: Frugal, industrious mutual funds for long-term relationship. No fee-hogs need apply." Engine trouble 10/04/03   Permlink   Broken Link World "As Californians go to the polls, we investigate the condition of America's most dynamic and most troubled state" Funds grapple with growing scandal 10/04/03   Permlink   Broken Link Funds "The list of big-name companies engulfed in a scandal involving mutual fund trading abuses lengthened Friday, leaving a burning question for the $7 trillion fund industry: How much worse will it get?" Canadians in the dark? 10/03/03   Permlink   Broken Link Brokers "Financial consumers have a very weak understanding of the function of planners, their qualifications and how they are regulated, a survey for the Financial Planners Standards Council reveals." Smart money 10/03/03   Permlink   Broken Link Graham "In a series of results that suggest Benjamin Graham was right all along, researchers have found that over the long term cheap stocks do better than expensive stocks. Companies with low stock prices relative to their earnings outperform stocks with high price-to-earnings (P/E) ratios; companies with low stock prices relative to the accounting value of their assets outperform stocks with high 'price-to-book' ratios; and stocks with high dividend yields outperform stocks with low dividend yields." Spending our way to disaster 10/03/03   Permlink   Broken Link Economy "The consumer debt bubble in the United States could make the stock bubble seem like nothing." Investors should see where cash goes 10/02/03   Permlink   Broken Link Funds "One mutual fund industry executive's take on the idea of showing investors exactly how much they're paying in fund fees: Good idea in theory, but not for us." Wall Street's dirty secret? 10/02/03   Permlink   Broken Link Markets "If we shape our expectations based on past returns, we are counting on rising P/E ratios and falling yields, almost exclusively, for our presumed "risk premium" for equities in the decades ahead." How soon we forget 10/02/03   Permlink   Broken Link Markets "According to Bridgewater Associates in the United States, the combined market cap of the top 20 Internet stocks was already more than US$122 billion in mid-July. Combined earnings over the previous 12 months, on the other hand, came to about US$25 million, which means the group's aggregate price-earnings multiple is somewhere around 4,880." Mutual fund tax efficiency 10/01/03   Permlink   Broken Link Funds "Is there a list that shows the tax efficiency of individual mutual funds? If so, how do I get it?" Make your advisor squirm 10/01/03   Permlink   Broken Link Brokers "For investors and the salespeople who [self-] serve them, the book is the biggest expos of Canada's mutual fund industry since Daniel Stoffman's The Money Machine. It's the book Glorianne Stromberg might have written if she'd been an advisor instead of a lawyer and regulator." Look to the big picture to avoid history's pitfalls 09/30/03   Permlink   Broken Link Markets "A recent study, based on data produced by the North American Venture Capital Association, paints a more interesting and complex picture. It shows that while private equity is capable of producing some hugely impressive returns, the returns are asymmetric. For instance, while one in five of surviving private equity funds produced a remarkable average return of 722 per cent over the period 1985 to 2002, the average annual rate of return on these funds was just 10 per cent. Two out of five funds lost investors money, and one in five lost an average of 85 per cent of the investors' starting capital." Fed-up fund investors shut their wallets 09/30/03   Permlink   Broken Link Funds "The amount of money flowing into funds dropped 70% in the weeks after major players were accused of cheating investors. It's no coincidence." Is it all going too far? 09/30/03   Permlink   Broken Link Government "The IDA action was part of a crackdown that some on the Street have begun to complain is overkill--and way off the mark. "People are losing their livelihood, their reputations can be destroyed and all sorts of severe sanctions come with these traffic-ticket-type offenses," says Ermanno Pascutto, a securities lawyer who headed the OSC from 1984 to 1989. "But for serious fraud, nothing happens." On the heels of large indictments in the US, Canadian regulators are rushing to defend the public interest. But an approach that's too heavy-handed--or goes after the wrong people--may threaten exactly that." Big business 09/29/03   Permlink   Broken Link Health "The obvious conclusion: a growing herd of fat people will provide lots of demand for firms supplying everything from bigger towels to bigger beds and, alas, bigger coffins. Demand for adult-sized electric tricycles may grow as some of the obese find it hard to walk. In health care, much will change. Some hospitals, for instance, are finding some obese people cannot be squeezed into MRI machines for scans." How to fend off kids selling stuff 09/29/03   Permlink   Broken Link Thrift "No more magazine subscriptions! No more wrapping paper or candles! Stand up to these pint-sized salespeople and their adult accomplices." How to survive 7 big budget busters 09/29/03   Permlink   Broken Link Thrift " Most budget advice focuses on carving savings out of your discretionary spending -- how much you blow on lattes or health clubs or eating out. But interviews with credit counselors and bankruptcy attorneys show it's more often the expenses you consider fixed or beyond your control that can cause you serious financial trouble." Buffett's company to sell $1.5B in debt 09/29/03   Permlink   Broken Link Buffett "Berkshire Hathaway unit plans to sell 5-year and 10-year notes in an unsecured debt offering." Is Wal-Mart too powerful? 09/28/03   Permlink   Broken Link Stocks "Low prices are great. But Wal-Mart's dominance creates problems -- for suppliers, workers, communities, and even American culture." Barrage of takeovers marks start of new era 09/27/03   Permlink   Broken Link Brokers "When the banks bought brokerage houses, the bargains came to those who bought first; the last ones in paid the highest prices. However, this next round of convergence in the financial services industry will probably be driven by the desperation of the sellers. Patience, in this game, may well be rewarded." The dollar meltdown 09/27/03   Permlink   Broken Link Grant "The Fed is working hard to cheapen the dollar, specifically against the yuan. Here's how to make the Chinese currency work for you." New ETFs give access to emerging markets 09/27/03   Permlink   Broken Link Indexing "ETFs have always done an excellent job of providing avenues for investing in North America, but the selection of global funds used to be disappointing. The iShares and BLDRS emerging market funds, both less than a year old, are symbolic of how times have changed for ETF investors." The envelopes, please... 09/26/03   Permlink   Broken Link Indexing "The logic that underpins the advice put forward by many so-called "professional" financial advisors can be quite amusing. Perhaps the most amusing of all the truisms of financial advice proffered by virtually all advisors is that investors should choose actively managed mutual funds over passively managed index funds or exchange traded funds." The misery of manufacturing 09/26/03   Permlink   Broken Link Economy "One minor obstacle, then as now, is the awkwardness of facts. Manufacturing has only recently, and with unusual lethargy, emerged from a global recession. (From a peak in June 2000 to a trough in December 2001, manufacturing output shrank by 7.6% in America.) But, on a longer view, rich-world manufacturing is in terrific shape (see chart). Amicus may have a point that Britain under-performs its peers in manufacturing. But that is only because Britain's competitorsparticularly Americahave done so well. Since 1970, America's manufacturing output has more than doubled. Even after the recession, American manufacturing output is almost 50% higher than in 1992." No reason for Nasdaq exuberance 09/26/03   Permlink   Broken Link Markets "So, while the fundamental outlook isn't getting any worse, it's not getting much better. But you wouldn't know that to look at the valuations of most tech stocks. Using Wall Street consensus estimates for 2003, the average price/earnings ratio of the tech stocks in the Nasdaq 100 is 45. (Interestingly, only about half the Nasdaq 100 is tech and telecom.) That's not a stratospheric level, but it's hardly one that screams "bargain" to me. Moreover, it's been proven over and over again in academic studies that Wall Street estimates are consistently too optimistic, which means that P/E of 45 could be closer to 50 or 60 if the "E" comes down." G7 household finances 09/25/03   Permlink   Broken Link Economy "Two questions are posed in this brief paper. The first one speaks to short-term sensitivities by asking whether household finances and consumer spending in some countries are more affected, positively or negatively, by expectations for rising bond yields, possible future monetary tightening, strengthening stock markets and a slowing pace of property market gains than others. The second question speaks to longer-term sensitivities by asking what longterm risks aging populations pose to aggregate household finances and financial markets going forward." It's time for mutual funds to stop burying fees in muddy MERs 09/25/03   Permlink   Broken Link Funds "I'd like to know how much my mutual funds are costing me in fees. Sure, I've got the management expense ratio (MER) to give me an idea of how much I'm paying, but that's not good enough. I want a dollars-and-cents breakdown." The era that wasn't 09/25/03   Permlink   Broken Link Taxes "In truth, government tax collection and spending rarely missed a growth beat over the last 10 years. In real constant dollars, undistorted by inflation, all levels of government -- Ottawa, the provinces and cities and towns -- spent $15,082 per person in 2002. For every family of four, that adds up to $60,328. Total government revenues for the same family, if its members were living in, say, 1967, would have been $22,720. The growth path in government revenues, plotted in the graph, offers no evidence of tax reduction. Whatever blips occurred can be traced to general economic trends." The New Dividend 09/24/03   Permlink   Broken Link Stingy Investing "The once mighty dividend isn't what it used to be. Although dividends have regained some popularity, they remain largely supplanted by share buybacks with nearly half of all corporate distributions going to repurchase shares. Like dividends, buybacks represent a return of shareholders' equity but they have their own unique characteristics." Isabel blew fallacy ashore 09/23/03   Permlink   Broken Link Economy "Hurricane Isabel roared onto eastern North Carolina shores in mid-day, September 18, 2003, continuing on into Virginia and north from there. While Isabel was no Hurricane Hugo, the monster storm that demolished Charleston, S.C. back in 1989, it washed up the usual economic fallacies." Soak the Rich. Which Ones? 09/22/03   Permlink   Broken Link Taxes "Some of those Forbes 400 characters are unusual--they pay lots of hard cash to the tax collector." Voters can be such a nuisance 09/22/03   Permlink   Broken Link World "Sweden's rejection of the euro will sustain anti-euro opinion in Denmark and Britain (the union's other non-euro members) and makes it unlikely that any of the three will soon fall into line: the EU will therefore remain a multi-currency area for the foreseeable future. That is significant, but far more important is the fact that forthcoming referendums on the constitution now seem increasingly unlikely to go as governments would wish. It will take only one Sweden to block plans for a new constitution, and two or three might kill them." The great fund ripoff 09/22/03   Permlink   Broken Link Funds "Like Joshua shattering the walls of Jericho, in early September New York State Attorney General Eliot Spitzer shook the mutual fund industry to its very foundations." Fund scandal may run deeper 09/22/03   Permlink   Broken Link Funds "Mutual fund companies repeatedly allowed Wilshire Associates, the investment consulting firm, to engage in a rapid-fire trading strategy that netted the firm huge returns -- and came at a cost to the mutual funds' long-term investors, according to a report in the October issue of Money Magazine." Fees! Fees! Fees! 09/22/03   Permlink   Broken Link Thrift "Companies can't raise prices, so they're socking consumers with hundreds of hidden charges--and that's creating stealth inflation and fueling a popular backlash" How safe is your identity? 09/21/03   Permlink   Broken Link Crime "Identity theft is the latest trend in consumer fraud. PhoneBusters, an anti-fraud group set up by the Ontario Provincial Police, says there have been about 8,817 reporter incidents of identity theft across the country this year, up from 8,178 for all of 2002. The value of these thefts has risen to $14.1-million so far this year from $8.8-million last year." We can't speculate our way to prosperity 09/20/03   Permlink   Broken Link Markets "Soaring margin debt. $100 million paydays. Dead-fish analysts cheering no-earnings techs. All signs that the mania that made the bubble is alive and well." Is your degree worth $1 million -- or worthless? 09/20/03   Permlink   Broken Link Thrift "Look before you leap into spending a small fortune on an associate's, bachelor's or graduate degree. If money is your motivation, learn which ones really pay off." Parts and labour sold separately 09/19/03   Permlink   Broken Link Funds "With unbundled investment products, advisors could set a certain (perhaps sliding scale) fee schedule and then ask clients what "building blocks" they would like to use in constructing their portfolios. Products like exchange traded funds and true no load funds (PH&N, Mawer, Perigee, etc.) are often as good as or better than conventional products like A Class or "embedded compensation" mutual funds, yet substantially cheaper." Domestic stock funds in red again 09/19/03   Permlink   Broken Link Funds "Canadians pulled nearly $200-million from domestic stock funds in August, the Investment Fund Institute of Canada reported yesterday, extending their losing streak to 15 months and suggesting that investors are not yet convinced that a six-month rally in equity markets has staying power." A battle royal is brewing in Chicago 09/19/03   Permlink   Broken Link Markets "Upstart electronic derivatives exchange Eurex is getting set to challenge the sacred turf of the Board of Trade and the Merc" Made in Japan 09/17/03   Permlink   Broken Link World "After 13 years of darkness, the Land of the Rising Sun is desperate for a turnaround" Is Blockbuster doomed? 09/17/03   Permlink   Broken Link Stocks "Video rental chains are cash cows today. But thanks to developments in technology and marketing, they could become dinosaurs more quickly than many investors believe." Ratings agencies see danger in yuan float 09/17/03   Permlink   Broken Link World "Credit-rating companies on Monday issued strong warnings that China should not let its currency appreciate or relax controls on the movement of large sums of money in and out of the country soon, as the United States has asked, saying that the Chinese banking system was not ready for the changes." That Alabama tax vote 09/16/03   Permlink   Broken Link Taxes "Last Week, voters in Alabama resoundingly rejected Gov. Bob Riley's tax plan by a margin of more than 2 to 1. The plan would have resulted in the largest tax increase in state history." 10 ways you mindlessly waste money 09/16/03   Permlink   Broken Link Thrift "Silently, secretly, your money disappears under some hideous voodoo spell, right? No way. Take a look at some ways you're flushing your cash down the loo -- and what you can do about it." The myth of a self-sustaining recovery 09/15/03   Permlink   Broken Link Markets "When it dawns on people that demand isn.t improving, the rebound has no legs and there.s no rescue party on the way, the market is in for trouble." Tequila sunset in Cancun 09/15/03   Permlink   Broken Link World "The world trade summit in Cancun, Mexico, has collapsed without agreement. Its fate may have been sealed seven years ago in Singapore" A latte today or $1 million tomorrow 09/15/03   Permlink   Broken Link Thrift "Can you cut the caffeine and stay out of Starbucks? You could be on your way to piling up $1 million. The choices: a quick coffee fix now -- or drinking in a more secure retirement later." The real Wall Street rip-off? Fat fund fees 09/15/03   Permlink   Broken Link Funds "Here is an idea: Keep more of your own money in your pocket by paying fewer fees. Just shelling out 0.2% more in fees each year can rob you of thousands in profits over the long haul." The cost of the good life 09/15/03   Permlink   Broken Link Thrift "Spending on stuff seems a never-ending spiral in America; there's always something new to buy." The patent shadow game 09/14/03   Permlink   Broken Link Accounting "If you're the type of person who has a lot of bad ideas, your ship may have come in. These days, even the "iffiest" innovations are fetching smart sums. Here's why: some of North America's largest corporations are donating intellectual property to nonprofit organizations in exchange for receipts worth enormous savings in taxes." Illegal trading appears rampant 09/14/03   Permlink   Broken Link Funds "The alleged illegal trading that prosecutors are investigating at a few mutual fund firms might be more widespread and costly to investors than thought. Illegal trading occurs in at least one out of every six mutual fund families and costs investors about $400 million a year, according to an academic study released Thursday." Drawing down an RESP is no simple task 09/14/03   Permlink   Broken Link Taxes "If you thought it was struggle to make regular contributions to a registered education savings plan, just wait until you're ready to take the money out. You won't believe the process. If you had any ideas about calling your RESP administrator and asking for a cheque, just forget it." Morningstar rips suspect funds 09/14/03   Permlink   Broken Link Funds "Fund-rating firm Morningstar issued an unusually critical report Friday recommending that investors consider selling their stakes in the mutual funds run by Janus, Strong, Bank of America, and Banc One." Fame vs fortune: micropayments and free content 09/14/03   Permlink   Broken Link Markets "The people pushing micropayments believe that the dollar cost of goods is the thing most responsible for deflecting readers from buying content, and that a reduction in price to micropayment levels will allow creators to begin charging for their work without deflecting readers. This strategy doesn't work, because the act of buying anything, even if the price is very small, creates what Nick Szabo calls mental transaction costs, the energy required to decide whether something is worth buying or not, regardless of price." Regulators to the rescue? 09/12/03   Permlink   Broken Link Funds "New York Attorney General Eliot Spitzer stirred a firestorm recently when he claimed that several large financial firms, including Bank of America and Janus Capital, allowed a big-money trader to move quickly in and out of mutual funds in an attempt to profit from brief price discrepancies. One common trading strategy, for example, involves buying foreign stock funds just before the close of the U.S. market. By doing this, traders hope to profit from "stale prices" on the foreign funds." Are you worse off than Mom and Dad? 09/12/03   Permlink   Broken Link Economy "If you feel like it's harder to provide the kind of middle class upbringing for your kids that your parents gave you, you may be right." Wait! Think before selling 09/12/03   Permlink   Broken Link Funds "Some quality names have turned up on a list of funds that investors are fleeing in large numbers. Templeton Growth, Fidelity International Portfolio, AIC Diversified Canada_ these funds are all among those with the worst net sales at mid-year. In simple terms, investors were selling these funds at a much faster rate than they were buying in. The question here is why? Why, with the markets finally showing some life, are investors selling out of funds that are proven long-term winners?" Second solid month for fund industry 09/11/03   Permlink   Broken Link Funds ""Slowing net redemptions for some firms (Mackenzie, CI) and a return to net sales for others (Franklin Templeton) may be indicative of a slowdown in equity fund net redemptions, or rather a pickup in gross purchases," said Dan Hallett, president of Windsor-basded Dan Hallett & Associates. "This doesn't exactly scream investor optimism, but it looks like a gradual improvement."" Wall St.'s memorial day 09/11/03   Permlink   Broken Link Disaster "The markets will open and close at the usual times, but activity will be halted at 8:46 a.m., 9:03 a.m., 9:59 a.m., and 10:29 a.m. ET for a minute of silence to mark the moments airplanes crashed into each of the World Trade Center's twin towers and the times when the buildings fell. Many market participants in New York will join in the ceremony commemorating the attack at Ground Zero, blocks away from the New York Stock Exchange." A dozen stocks for the next 5 years 09/10/03   Permlink   Broken Link Value Investing "We don.t buy the post-bubble notion that long-term investing is dead. There's always a place for a good company riding a solid trend." Health costs skyrocket 09/09/03   Permlink   Broken Link Management "Faced with the largest price hike since 1990, firms pass more insurance costs on to their employees." The case of the double agent 09/09/03   Permlink   Broken Link Real Estate "How can you make sure your real estate agent isn't working for the enemy?" High court hears from Buffett 09/09/03   Permlink   Broken Link Buffett "Billionaire investor Warren Buffett was among those whose opinions were being weighed by the nine U.S. Supreme Court justices as they heard arguments Monday regarding the McCain-Feingold campaign finance reform act." Spitzer's mutual-fund fight deserves an A 09/08/03   Permlink   Broken Link Markets "The New York attorney general's investigation of mutual funds is welcome news. Most investors had assumed this industry is squeaky-clean. It's about time the truth was exposed." Don't let crooks manage your money 09/08/03   Permlink   Broken Link Funds "Get your money out now and invest where management isn't selling out its investors. Look for funds with financial independence and managers who are shareholders." Horror story 09/07/03   Permlink   Broken Link Dreman "Freddie Mac is not the villain that its enemies portray. Its accounting scandal is way overblown. Along with cousin Fannie Mae, it is a solid company with great prospects." Hot stocks 09/07/03   Permlink   Broken Link Dreman "The economy is picking up, but investors' anticipation of a rapid improvement is a little too aggressive, said David Dreman, fund manager for Scutter Dreman High Return Equity Fund. Companies are boosting their earnings, but they aren't seeing fast enough improvement, Dreman said. He cited the strong rise in the Nasdaq, which he dubbed "bubble junior."" Haggling 09/06/03   Permlink   Broken Link Stocks "During a three-year investigation by America's Department of Justice into Executive Life, a Californian insurer that collapsed in 1991 and was bought by Cr dit Lyonnais, a big French bank, it sometimes seemed that the affair was about little more than transatlantic regulatory nit-picking. This week proved how much bigger the scandal really is." Insurance trusts can accomplish plenty 09/06/03   Permlink   Broken Link Taxes "If I could add some financial advice to the list, I'd suggest buying life insurance -- and consider a trust for that life insurance to boot. You see, there are several situations where an insurance trust can make sense. Let me explain." Enemy of the states 09/05/03   Permlink   Broken Link Law "Companies are increasingly worried by the growing power, and desire, of America's state attorneys-general to regulate and punish them" Sumner's forgotten classic 09/05/03   Permlink   Broken Link Government "Many of these problems are foisted on the Forgotten Man. Look at the healthcare debate, where various proposals are put forth for the government to pay or subsidize medical costs. The politicians and policy wonks get all the attention, as do the alleged beneficiaries of their programs, but no attention is paid to the folks who have to pay for it all.Sumner's Forgotten Men. As Sumner writes, "In all the discussions attention is concentrated on A and B, the noble social reformers, and on D, the 'poor man'. I call C the Forgotten Man, because I have never seen that any notice was taken of him in any of these discussions."" Income trusts can dabble in chicanery 09/04/03   Permlink   Broken Link Trusts "A more direct approach to polishing the numbers is needed. And so investors must thank Atlas Cold Storage Income Trust for reminding us that shoddy accounting and anemic governance aren't restricted to ordinary common stock companies." Your bank can blacklist you 09/04/03   Permlink   Broken Link Government "In the name of homeland security, financial institutions can close accounts and cancel credit cards with little explanation. Complaints are slowly mounting." A mortality warning for motorists 09/04/03   Permlink   Broken Link Government "The impact of mispricing risk in public insurance systems is to shift collision costs to other drivers.primarily female, safer and older drivers.and to encourage too many risky drivers to take to the road." The excessive 80s 09/04/03   Permlink   Broken Link Markets "Recession set in. Interest rates maxed out. Fortunes were made and lost" What, WE Worry? 09/03/03   Permlink   Broken Link Gross "Well, maybe I.m just pessimistic because I.m a Californian and the not so Golden State currently resembles the pulp not the juice of its once famous oranges. But California is 15% of the nation and it is the trendsetter in more ways than fashion, Hollywood, and tongue rings. We have a huge deficit based on overspending which was in turn based on the anticipation that financial markets and their capital gains would continue indefinitely. Our schools are a mess. Businesses are departing daily to points unknown. But this Outlook will not be a California diatribe. I use it only to suggest that as California goes so goes the nation and at the moment its prospects are not good, Terminator or no Terminator." The hidden costs of offshore outsourcing 09/03/03   Permlink   Broken Link Management "Moving jobs overseas can be a much more expensive proposition than you may think." Mutual funds under investigation 09/03/03   Permlink   Broken Link Funds "Specifically, Canary was accused of "late-day trading," the term for buying mutual fund shares at their closing price after the close of trading in U.S. stock markets at 4:00 p.m. ET, allowing the firm to profit from corporate news released after the closing bell. The law requires mutual-fund trades made after the close to be processed at the next day's share value, to keep late traders from having an advantage over others." Pious Buffett should heed own counsel 09/02/03   Permlink   Broken Link Buffett "Buffett, estimated to be the world's second-richest man, has gained prophet status in the world of business by calling on corporate America to become cleaner, better governed and more transparent. Because of this towering reputation, people sit up and listen when he preaches on things like financial disclosure and corporate governance. Problem is, his own actions at Berkshire Hathaway do not match his words." New vogue for market-timing? 09/02/03   Permlink   Broken Link Funds "In the chancy world of investing, here's one safe bet. No matter how disaffected people may be with buy-and-hold strategies, the traditional alternative -- market-timing -- has no prospect of coming back into style." Retail investors swim against the market tide 09/02/03   Permlink   Broken Link Funds "The contrarian theory of investing is based on the premise that certain investors (usually small retail investors) generally do the wrong thing at important turning points in markets. Case in point: the year 2003." Buffett's trailer deal could get trashed 09/02/03   Permlink   Broken Link Buffett "But if jurors find fraud and attempt to award hefty damages to shareholders or force Clayton to renegotiate the deal, analysts warn that Buffett could walk. That may cause Clayton's stock to collapse. For shareholders, "this has become high-stakes poker," warns Michael A. Perino, a securities law professor at St. John's University." Ask not what telemarketers can do to you 09/02/03   Permlink   Broken Link Fun "So what does the public care about right now? Telemarketers. The public hates them. It hates them even more than it hates France, low-flow toilets or ''customer service.''" This job market would depress optimists 09/01/03   Permlink   Broken Link Economy "Thousands of good-paying jobs are moving overseas. Nearly 5 million workers who are working part time need full-time hours to make ends meet. Another half-million have dropped out of the job market due to lack of prospects. Wages have fallen by 1 percent in the past year for both low- and high-wage earners. And despite a limited extension of federal benefits starting in May, more than two-thirds of the long-term unemployed have run out of unemployment insurance benefits." The great fund failure 08/31/03   Permlink   Broken Link Funds "Mutual funds were designed to let the small guy invest in the market cheaply and efficiently. The system doesn't work, though, when fund investors are too lazy to comparison shop for good values." Is your boss an idiot? 08/31/03   Permlink   Broken Link Management "You can't live with 'em. And you can't shoot 'em. This, of course, is the dilemma when you work for an idiotic boss." Whistleblower says he just wanted Coke to listen 08/30/03   Permlink   Broken Link Stocks "Eleven years after getting his dream job, Whitley is just drinking water. His wife sold the Coke plates, glasses and memorabilia at a garage sale. He is out of his $140,000-a-year job after accusing officials of the world's largest soft drink maker of shady accounting and fraudulent marketing practices." Tax-saving tips make cost of education easier to bear 08/30/03   Permlink   Broken Link Taxes "Chances are pretty good that your kids will also need an education if they hope to succeed in the future. And if your kids are going to get an education, you might as well take advantage of as many tax breaks as possible along the way. Here are a few to consider." Unfunded pensions a problem 08/29/03   Permlink   Broken Link Accounting "What's the single biggest cost in the making of a Chevrolet? Is it steel, technology, electronics, design or what? I bet that most of us don't know that the biggest cost component is medical care for retired workers." The world's most honest money manager tells all 08/29/03   Permlink   Broken Link Funds "Of course, mutual fund managers aren't a dishonest lot in general -- most seem like fairly straightforward, conscientious people. But you won't find many skippers who readily concede that the industry is riddled with problems that make index funds look most appealing." The fine art of splitting a check 08/29/03   Permlink   Broken Link Thrift "It's the moment of ugly truth: Your dear friends are appetizer-hogs, dessert-grubbers and drink-downers. And they ordered pheasant under glass. So . . . shall we just divide it 6 ways?" Apple picking 08/29/03   Permlink   Broken Link Stocks "Wall Street analysts have missed the boat on Apple's big stock move. So why listen to them now?" To have and to hold 08/28/03   Permlink   Broken Link Markets "Some recent work should at least help. It explores the .endowment effect., one of the chief tenets of prospect theory. Put simply, this means that people place an extra value on things they already own. Think of a favourite sweater, or your house: would you swap either for something of equal market value? Over the past decade, prospect theorists have found support for the endowment effect in scores of experiments." Auditing an Oracle 08/28/03   Permlink   Broken Link Buffett "Shareholders nearly deify Warren Buffett for the way he manages his diverse holding company, Berkshire Hathaway of Omaha. There's little doubt that he's squeaky clean in how he operates. But that doesn't necessarily mean that other companies can or should follow the way the avuncular champion of business ethics conducts his own affairs. His approach: handshake deals on billion-dollar acquisitions and near-complete avoidance of technology in combating fraud." Refinancing choke jolts homeowners 08/27/03   Permlink   Broken Link Real Estate "Many homeowners who tried to refinance their mortgages at lower interest rates this summer are seeing the volume of applications choking the process, a report said Tuesday." A showdown at the checkout for Costco 08/27/03   Permlink   Broken Link Stocks "It's under fresh assault from a revived Sam's Club, which is tapping parent Wal-Mart's buying power to slash prices. Can Costco stay ahead?" 4 scary ways creditors gouge you 08/26/03   Permlink   Broken Link Debt "If you snooze, you can lose -- by getting hit with fees, fees and more fees. With delinquencies up, credit-card issuers are trying to take more money out of your wallet. Here's how to protect yourself." Five undiscovered picks from small-cap managers 08/26/03   Permlink   Broken Link Stocks "By and large, small-cap stocks aren't household names. There are exceptions, of course. Home decorators, party planners, and cooks (not to mention followers of the criminal justice system) are no doubt familiar with small-cap Martha Stewart Living Omnimedia. But few small caps get anywhere near as much analyst coverage or ink in The Wall Street Journal as giant companies like General Electric and Microsoft. With fewer analysts and investors closely following smaller companies, the odds are better that you'll find stocks whose virtues aren't appreciated by Wall Street in small-cap land than in large-cap territory." For the love of the fund salesman 08/26/03   Permlink   Broken Link Funds "Loaded word is independent. In the business of providing financial advice, the word is as important as "fresh" is to a butcher. There is a pretty limited market for old meat, and there is no demand for biased financial advice." You might be a shopaholic 08/25/03   Permlink   Broken Link Thrift "Turns out 1 in 20 of us -- women and men alike -- can't control the urge to spend. Learn what drives this destructive behavior." Like 1987, only worse 08/25/03   Permlink   Broken Link Markets "As a crisis of confidence looms for bonds and the dollar and the markets play out their recovery fantasy, the chance of a crash grows every day -- as does the depth of its consequences." Living in a state of disrepair: California 08/25/03   Permlink   Broken Link Fun "To make matters worse, Gray lost the state budget surplus. California had this gigantic surplus, billions and billions of dollars, and now it's gone. They've looked everywhere, but nobody can find it. It is the Weapon of Mass Destruction of budget surpluses. So now Gray is spectacularly unpopular. Everybody despises him. When he tries to get into the governor's house, his own dog attacks him. When he calls for his security personnel, they side with the dog." A CEO whose life is an open book 08/24/03   Permlink   Broken Link Management "One exception to adhering to the CEO code of omerta (the Sicilian "vow of silence") has been Bill George, former head of Medtronic, the pacemaker and medical-devices behemoth. George has now authored a book geared toward future corporate leaders, written with the hope of staving off future shame in publicly traded companies. I've found few books penned by former CEOs worth reading, at least cover-to-cover. But anyone interested in management and leadership will get a great deal from investing some time in Authentic Leadership: Rediscovering the Secrets to Creating Lasting Value." WTO entry helps China pull it off 08/24/03   Permlink   Broken Link World "Beijing can certainly teach the world how to swim with the sharks in Cancun without being eaten alive. Instead of buying more from American and European farms after joining the WTO, China has actually become an even larger net exporter of agricultural products in its very first year as WTO member." Equity strategy can save on taxes 08/23/03   Permlink   Broken Link Taxes "Picture this. You're the proud owner of a stock that has appreciated in value and you've got too much tied up in this one security. That's right, you've got too many eggs in one basket. The problem? If you sell all or a portion of your holdings in the stock in order to diversify, you're going to trigger a tax liability large enough to wipe out the national debt, give or take. Not to worry. An equity monetization strategy can help." All about California 08/23/03   Permlink   Broken Link Buffett "With Arnold Schwarzenegger, Gary Coleman, a porn star and a partridge in a pear tree scrambling to become governor of California, a troubling question emerges." Different this time, maybe 08/23/03   Permlink   Broken Link World "Japan's economy has had everything in the past 15 years except a sustainable boom. Now, at least, Japanese stocks are enjoying a rally. The Nikkei 225 closed the week just below 10,300. The last time it spent a week above 10,000 was July of 2002. Of course, "Nikkei 10,000" is not much of a rallying cry for a stockmarket that once topped 38,000, but the index is still up about a third since April." Banks battle payday lenders to soak the poor 08/22/03   Permlink   Broken Link Debt "Advance America loans small sums to down-and-outers at rates as high as 391%. Outrageous? Your bank's overdraft plan is even worse." Asia starts to gasp for energy 08/21/03   Permlink   Broken Link World "Across all of Asia, from India to China and south to Australia, a severe energy crunch is developing as construction of energy plants and transmission facilities lags behind growing industrial capacity and burgeoning private consumption, according to energy and market analysts." Wall Street plays dirty despite cleanup effort 08/21/03   Permlink   Broken Link Markets "A review of recent takeovers shows price spikes and surging volume ahead of news that only an insider would know." Cash is king in an unplugged society 08/19/03   Permlink   Broken Link Banks "Dreams of a cashless society died last Thursday afternoon at the same moment the power went out in Ontario and points south. In a world unplugged, cash is king." Sex and violence don't sell? 08/19/03   Permlink   Broken Link Media "Sex and violence don't necessarily sell, according to a University of Michigan professor who says studies show that viewers remember the commercials on more racy programs far less often then they do on more neutral fare." The failure of the social market 08/19/03   Permlink   Broken Link Government "In a January, 2003 commentary appearing in the Financial Times of London, professor Norman Barry opined, "the social market advocates were too relaxed; they believed the new order would produce enlightened people who would not need market incentives to behave responsibly. How wrong they were. Germans are normal, rational people. They will not work unless they have to. Now it often pays not to get a job and it is rational to stay in education until you are 30." Unless chained to reality by the forces of the market, the people and politicians have been free to bloat and expand the welfare state of Germany." How to cope with a cash crisis 08/18/03   Permlink   Broken Link Thrift "I find that money disasters tend to hit all at the same time, and it's always the worst possible moment. Here's how to assess your situation and get back on your feet." Lion cubs on a wire 08/18/03   Permlink   Broken Link World "Economic growth in Africa was dismal last year. At 3.2%, down from 4.3% in 2001, it barely kept pace with a swelling population. The culprits, according to a new report* by the United Nations, were a weaker global economy, drought and AIDS in southern and eastern Africa, fresh armed conflicts in the Central African Republic, Ctte d'Ivoire and Madagascar, and yet more madness in Zimbabwe." The poor are the solution, not the problem 08/18/03   Permlink   Broken Link World "Take the case of Egypt. My research team and I were invited to Egypt by the government to make an inventory of the poor's assets versus all the other sectors of the economy. We found that since the end of the Second World War the poor accumulated some $245 billion worth of assets, including real estate and small enterprises. How big is $245 billion? Fifty-five times bigger than all foreign investment in Egypt over the last two hundred years, including the Suez Canal and the Aswan Dam. Fifty times greater than all foreign aid received by Egypt. Thirty times greater than the Cairo Stock Exchange. So the poor are the solution. The problem is that they do not have a legal system that allows them to bring together capital, create new enterprises, leverage their assets, and cooperate on a global scale. The poor certainly were the solution in the United States, which was built by poor, entrepreneurial pioneers. And the formula has not changed in the last two hundred years." Bonds' thrills and spills 08/17/03   Permlink   Broken Link Bonds "It's summer, the stock markets are thriving and the most recent statements for your investment account show you're finally making money again. With all that good karma in the air, do you really need to worry about that shocking rout in the bond market in the past month?" The Atkins economy 08/17/03   Permlink   Broken Link Health "Competition among diets is fierce. It certainly helps if diets are enjoyable and easy to follow. The once portly Banting, who lived at 27 St James's Street, London (next door to what is now The Economist building) understood that even better than alcohol-sceptic Dr Atkins. In Banting's pamphlet, "Letter on Corpulence", he suggests for supper three or four ounces of meat or fish, and a glass or two of claret. And, if so inclined, a tumbler of gin, whisky or brandy as a nightcap. Some bright publisher should reprint his advice as the "Banting Plan"-which would surely trounce Atkins in the best-seller lists." Why your ID is such easy picking 08/16/03   Permlink   Broken Link Crime "With Social Security numbers so commonly used on insurance and health-care cards, a stolen wallet can easily lead to a much bigger headache." Be careful what you wish for 08/16/03   Permlink   Broken Link Management "There's no question that the publicity from option abuses, coupled with the market downturn, has tainted stock options. Many employees question the value of stock options in a down market, preferring now the "bird-in-the-hand" of a paycheck." Catch me if you can 08/16/03   Permlink   Broken Link Crime "The hunt for an eBay scammer. Jay Nelson ripped off buyers on eBay and Yahoo until the Feds put him behind bars. We catch up with him in prison, where he'll be until 2007." Did price controls work? 08/15/03   Permlink   Broken Link Government "More than two decades ago, many of these same critics were claiming that oil was too important a commodity to be left to the market. The 1981 removal of price and allocation controls thoroughly discredited that belief. Likewise, given the awful government failures we have witnessed in creating energy policies, we can state unequivocally that electricity is so important that it must be left to the free market to produce and distribute it." Will conservation save us? 08/15/03   Permlink   Broken Link Government "With the disappearance of the "energy crisis" in the early 1980s-an event that coincided with the ending of price and allocation controls on the oil industry-many of us had hoped that the voices of "conservation" and "alternative energy" would have been stilled. Unfortunately, we have had no such luck, and in the wake of yet more government-caused energy problems, the political classes and their media allies are once again beating the drums of government-enforced "conservation." Their words are as fraudulent today as they were two decades ago." The day the lights went out 08/15/03   Permlink   Broken Link Disaster "President George Bush has ordered an inquiry into a massive power failure affecting up to 60m North Americans. Whatever the immediate cause, an overloaded transmission system and poor regulation may be the real culprits." What caused the blackouts? 08/15/03   Permlink   Broken Link Disaster "Years of under-investment by power companies have left behind a US electricity grid that is woefully inadequate to meet increased demand." What college doesn't teach you 08/15/03   Permlink   Broken Link Thrift "The irony is that there's a whole world of math that would have been useful to learn. I'm talking here about the math of personal finance -- borrowing, budgeting, banking and such." Power returns to most areas hit by blackout 08/15/03   Permlink   Broken Link Disaster "U.S.-Canadian task force charged with investigating outage" What's working, what's not in Ontario 08/15/03   Permlink   Broken Link Disaster S.I. is back but we'll probably go down again due to rolling blackouts. Help your neighbors if you can. The world's greatest trader 08/13/03   Permlink   Broken Link Buffett "Berkshire Hathaway just released a bombshell. The company sold virtually its entire government bond portfolio -- $9 billion worth -- in the first half of 2003, just before the bond market crashed. This isn't the first time the poster child for buy-and-hold has scalped a billion or two from dumb old Mr. Market." Schwarzenegger campaign taps Buffett as adviser 08/13/03   Permlink   Broken Link Buffett "Arnold Schwarzenegger's campaign said Wednesday that Warren Buffett, the legendary investor and chairman of Berkshire Hathaway will serve as the senior financial and economic adviser to the film star on his bid for the governorship of California." Don't buy these 10 stocks! 08/13/03   Permlink   Broken Link Stocks "With the S&P 500 up about 12% and the Nasdaq up more than 23% this year, many investors have decided it's safe to jump back into the pool. Human nature being what it is, the majority of investors naturally will sell stocks when the market is going down, and do the opposite when the market is going up. Although this is a recipe for poor long-term returns, it's also a fact of life." Making the leap 08/13/03   Permlink   Broken Link Brokers "Although no longer a new concept, the merits of going fee-based are still being hotly debated within the financial advisory business. One thing is clear though: the transition can be a challenge and not every advisor is going to have what it takes to make the leap." Will debt weigh down the recovery? 08/13/03   Permlink   Broken Link Markets "Far from being models of health, most corporate balance sheets are groaning under debt loads. And that could crimp any rebound." The ripoffs behind rebates 08/13/03   Permlink   Broken Link Thrift "As many as half of all product rebates go unclaimed, experts say. One reason: Some companies make the rules so tricky that consumers won't bother." Dundee agrees to sanctions in RRSP scam 08/12/03   Permlink   Broken Link Brokers "Under the scheme, clients liquidate the money in their locked-in RRSP accounts to purchase stocks, usually in a start-up company chosen by the promoter, who loans 60% to 70% of the value of the investment and keeps the balance as an "administration fee." "The reality is that the stocks the promoter recommends are virtually worthless," the OSC says in a scam warning posted on its Web site. "You often get no funds from the promised loan, and you may be forced to pay tax on the de-registered money even though you did not receive it."" The new diamond age 08/12/03   Permlink   Broken Link Science "Starting in the 1950s, engineers managed to produce tiny crystals for industrial purposes - to coat saws, drill bits, and grinding wheels. But this summer, the first wave of gem-quality manufactured diamonds began to hit the market. They are grown in a warehouse in Florida by a roomful of Russian-designed machines spitting out 3-carat roughs 24 hours a day, seven days a week. A second company, in Boston, has perfected a completely different process for making near-flawless diamonds and plans to begin marketing them by year's end. This sudden arrival of mass-produced gems threatens to alter the public's perception of diamonds - and to transform the $7 billion industry. More intriguing, it opens the door to the development of diamond-based semiconductors." Why doesn't CIBC ban coffee too? 08/12/03   Permlink   Broken Link Brokers "CIBC World Markets is banning e-mail between its analysts and investment bankers, and other brokerage firms are said to be considering similar moves to shore up the "Chinese wall" between the two departments. But why stop there? Why not give analysts their own washrooms, so they don't run into bankers accidentally? Better yet, segregate the two in separate buildings, monitor their telephone calls, and comb the in-house baseball league for any illicit relationships." More economic sophisms 08/12/03   Permlink   Broken Link Fun "Special-interest-group pleading often tries to hide behind supposedly economic arguments. It is important to debunk such arguments as they arise, so that the interest-group politics can be seen for what it is." Sharp jolt for index of fund managers' renown 08/11/03   Permlink   Broken Link Indexing "The academic evidence, however, suggests that this is an overrated skill. The latest study by the Vanguard group shows that the bulk of returns comes, not from stock picking, but from humble asset allocation. Deciding on a 70/30 equity/bond split is the key to portfolio performance, not the ability to find the next Microsoft." Net worth steady despite stock fall 08/11/03   Permlink   Broken Link Markets "A peculiar thing happened during the latest slowdown in the economy: The net worth of Canadians -- on average -- remained unchanged through a big decline in the stock market and two years of weak growth. And for some, notably homeowners, financial conditions actually improved, though they may not notice the difference in their bank accounts." Chasing the dream 08/11/03   Permlink   Broken Link Management "A second and more important reason why more money does not automatically make everybody happier is that people tend to compare their lot with that of others. In one striking example, students at Harvard University were asked whether they would prefer (a) $50,000 a year while others got half that or (b) $100,000 a year while others got twice as much. A majority chose (a). They were happy with less, as long as they were better off than others." The promise of a blue revolution 08/10/03   Permlink   Broken Link World "Fish farming has a bad reputation. Its supporters argue that it promises to meet the growing shortfall as the world's wild fisheries become more and more exhausted. But its critics have the louder voice. They argue that farmed fish is fatty, dyed, polluting and stuffed with antibiotics. Moreover, they say that it is unsustainable. When a carnivorous fish-such as the salmon-is reared on a farm, it too must be fed with fish. And these fish must be caught in the wild, thus putting even more pressure on marine life, not less." Nothing like public humiliation 08/10/03   Permlink   Broken Link Fun "This month's 8-K was a show stopper. Edward Wolfe, a Bear Stearns analyst who has a sell rating on Expeditors stock ("underperform," whatever), managed to get himself into a bit of a snit over Expeditors' failure to respond to his emails and requests for a visit. The entire response absolutely has to be read to believed. And keep in mind, this is in a federal filing, not some company press release." Proper landscaping design could save you tax 08/10/03   Permlink   Broken Link Taxes "There are certain restrictions that could jeopardize your ability to claim the principal residence exemption in some situations. One of those restrictions is the half-hectare rule. You see, our tax law restricts the amount of land that qualifies as part of your principal residence to half a hectare (about 1.25 acres). The good news? There's an exception to this rule where you can demonstrate that the land in excess of half a hectare is necessary for the use and enjoyment of the property as a residence." Is there a best time to buy? 08/10/03   Permlink   Broken Link Real Estate "But home buyers have always suspected--although real estate agents may deny--that there are certain times of the year when the housing market heats up and cools down." Gillette nicked by Schick 08/09/03   Permlink   Broken Link Stocks "Tensions escalate in the shaving wars as the world awaits the arrival of the four-blade razor." Who is your broker working for? 08/09/03   Permlink   Broken Link Brokers "When your stockbroker recommends a mutual fund for you to buy, does he or she have a vested interest in that advice? One of the dirty little secrets of the business is that brokers do indeed. Some mutual funds pay them higher commissions than others do for selling their products." Your home: Worst-case scenario 08/09/03   Permlink   Broken Link Real Estate "John R. Talbott, a visiting scholar at UCLA's Anderson School of Business and author of "The Coming Crash in the Housing Markets," has a thesis that will leave you quaking from behind your picket fence." MER heretic fires opening salvo 08/09/03   Permlink   Broken Link Funds "DeGoey sounds like an indexing heretic practising in the high-fee Vatican of Winnipeg, but the analogy is not that offbase. His subsequent essay, "MERs as Indulgences," evokes Martin Luther to call for a mutual fund reformation in Canada." How index funds got ambushed by bear 08/09/03   Permlink   Broken Link Indexing "What was smart about buying index funds in 1998 is still smart five years later. Perhaps in the next five years this good thinking will actually make investors some money." Tough sell for Noranda 08/09/03   Permlink   Broken Link Stocks "Noranda's decision to slash its quarterly dividend rate to 12 cents a share from 20 cents was a surprise as most analysts were caught looking for a cyclical recovery." Amazon's search for a river of growth 08/09/03   Permlink   Broken Link Stocks "Despite some standout quarters, the giant online retailer needs to keep expanding to justify its lofty p-e, and that won't be easy." Pensions 'black hole' doubles 08/09/03   Permlink   Broken Link Markets "Some of the companies are starting to look like giant investment trusts which just happens to make a few engines on the side - or own aircraft or whatever the business is." 3 insurers quietly end a brokerage policy 08/09/03   Permlink   Broken Link Brokers "So, for the insurance companies, it has been a long free ride. Yet suddenly they have concluded that the ride is too risky, in part because the worst-case outcome, though unlikely, would be catastrophic." Finding winners Warren's way 08/09/03   Permlink   Broken Link Buffett "Using Buffett's proven growth-oriented strategy as the starting point, S&P turns up 30 promising names." The S&P is lousy at make-or-break bingo 07/25/03   Permlink   Broken Link Indexing "Despite its sizable rally in 2003, over the past three years the S&P 500 has lost more than one-third of its value. That's a drop twice as deep as the Dow Jones Industrial Average and 25% worse than the Wilshire 5000 Index. One key reason could be its managers' singular misadventures with what some traders call "binary" events." Be a smart lender 07/25/03   Permlink   Broken Link Debt "Lending money can be risky at the best of times, but lending it to family members gets downright personal. Yet with the economy and job situation so rocky, family handouts are sometimes the only option. Lending wisely can lessen the angst if you're hoping to see that money -- and a continuation of the relationships -- again." Issues with pensions 07/25/03   Permlink   Broken Link Accounting "The pension issue for defined benefit pension plans is a problem in only some industries (such as manufacturing) but generally is being overemphasized as an issue in credit ratings" The stagnant 70s 07/25/03   Permlink   Broken Link Markets "Stagflation. Separation. Americanization. It was a tough time for Canada." The swinging 60s 07/25/03   Permlink   Broken Link Markets "Scandal. Hippies. Flower power. Strangely, it was all good for business." Smart companies weigh their options 07/25/03   Permlink   Broken Link Management "Microsoft without stock options? It's like America without baseball, apple pie without apples. It's unimaginable, yet in this case it's real. Microsoft's announcement that it would no longer give employees the stock options that made hundreds of them millionaires, and a few of them billionaires, is one of those mind-bending events that reveal truth where there had been oceans of hype and nonsense." Brands in an age of anti-Americanism 07/25/03   Permlink   Broken Link Stocks "BusinessWeek/Interbrand's annual ranking of the world's most valuable brands shows that American labels are still potent." Stocks are cheap! 07/24/03   Permlink   Broken Link Markets "Professional investors think stocks are a great buy now. How worrisome." How deep is the ethics crisis? 07/24/03   Permlink   Broken Link Management "What if Tom Ridge issued alerts for corporate ethics lapses rather than terrorist threats? It'd probably be at the highest level--imminent danger of more Enrons, Tycos and Worldcoms to come." Retirement Guide 07/24/03   Permlink   Broken Link Retirement "New tax laws and a possible economic brightening make smart planning more crucial than ever." MERs as Indulgences 07/23/03   Permlink   Broken Link Indexing "My advice to consumers is simple. If your advisor recommends a fund to you that either does not have a ten-year track record or has a track record that lags its benchmark, just say no. Ask to buy the benchmark instead." Deadline for U.S. beneficiaries of RRSPs 07/23/03   Permlink   Broken Link Taxes ""However, as the Internal Revenue Service has not yet made a ruling on this issue and the deadline for filing the requisite materials is August 15, the association reminds members and their clients to contact their tax advisors regarding the requirement that forms reporting these transactions be filed, and the procedure for filing such forms," it counsels." July 28 is fee freedom day 07/23/03   Permlink   Broken Link Funds "Barclays Global Investors Canada Ltd. announced Wednesday that July 28 is Fee Freedom Day for Canadian mutual fund investors." Postcards from the edge 07/23/03   Permlink   Broken Link Government "What message is California sending to companies? Get lost!" Seven ways to solve the executive pay mess 07/23/03   Permlink   Broken Link Management "Suffice it to say excessive executive compensation has never been more of a hot button--and it's no wonder. According to Bruce Hutton, a professor at the University of Colorado who recently did a private research project on compensation, the ratio of chief executive pay to that of the average employee tops out at 500-to-1. That's not a typo." Shareholder no. 1 07/22/03   Permlink   Broken Link Management "He's quiet and unassuming, and as head of the Ontario Teachers' mega-fund he's among the most powerful men in business today. But Claude Lamoureux is also at the centre of the brewing storm over corporate reform." Denmark: A Case Study in Social Democracy 07/22/03   Permlink   Broken Link Government "In conclusion, we can say that neither on crime, education nor health do we see the favorable results we would have expected. Quite to the contrary. The prospects for being able to rely on government or family for social security are also rapidly diminishing. These are not very bright prospects indeed for a country where each working citizen are forced to sacrifice such a large share of his personal earnings to the common good." Lehman cash woes 07/22/03   Permlink   Broken Link Management "Lehman Brothers' carefree use of restricted stock has come back to haunt the Wall Street giant, costing the company virtually all of its 2002 cash flow, a shocking report by a leading Wall Street analyst claims." Berkshire gives up on giving 07/21/03   Permlink   Broken Link Buffett "Warren Buffett has drawn criticism in the past for supporting pro-choice causes, but it never affected Berkshire Hathaway's charitable giving-that is, until Cindy Coughlon, a 34-year-old stay-at-home mom in Peoria, Ariz., came along. Now, as a result of her campaign against pro-choice donations, the most powerful man in business (see Cover Story) has terminated Berkshire's entire contribution program, which distributed nearly $200 million over the past two decades to institutions ranging from schools to groups on either side of the abortion debate." Europe's population implosion 07/21/03   Permlink   Broken Link World "Europe's population is shrinking and greying-with grim consequences." Transferring a family cottage to the kids can save tax 07/20/03   Permlink   Broken Link Taxes "Let's talk about your cottage. There are a number of ways to minimize the income tax hit on a cottage, but I'd like to focus on one specific strategy: Providing your kids with ownership." Watch out, investors, Tarzan's back! 07/20/03   Permlink   Broken Link Stocks "Chest-pounding CEOs are once again hungry for takeover targets. That's never good news." Inflation and the American Revolution 07/18/03   Permlink   Broken Link Government "How odd that the tax bills of many American families would fall during a period of exorbitant increases in federal spending due mainly to war. But once we discover the record levels of government debt accumulation, perhaps it is not so odd. It's the shell game of government finance at work." Bequeathing your assets to your broker 07/18/03   Permlink   Broken Link Brokers "A hoary peice of stockbroker lore has a young broker asking a senior partner at the firm about his proudest accomplishment. The reply: 'Over the years I've gradually transferred the assets of my clients to my own name.'" Of manias, panics and crashes 07/18/03   Permlink   Broken Link Markets "Mr Kindleberger believed that "markets work well on the whole", but occasionally "will be overwhelmed and need help" from a lender of last resort. He understood both the danger of inaction by such a lender and the "moral hazard" that its mere existence can create, by encouraging investors to be reckless in the belief that they will be bailed out if all goes wrong. Thus, he argued, a "lender of last resort should exist, but its presence should be doubted." It should always come to the rescue, but "always leave it uncertain whether the rescue will arrive in time or at all, so as to instil caution." Pulling this off is, he noted, a "neat trick"." Darkness falls on Tokyo 07/18/03   Permlink   Broken Link World "The ministry, which oversees the electricity industry, is gearing up for a power shortage that could leave Tokyo facing unprecedented blackouts this summer, when demand for electricity reaches its peak. The reason: Tokyo Electric Power (Tepco), the world's largest private electricity company, had to close its 17 nuclear reactors after it was caught last September falsifying safety records to hide cracks at some of its power plants. Three have now restarted, but it is unclear when the local authorities will allow others to do so." MERs falling? 07/18/03   Permlink   Broken Link Funds "Following on the heels of Morningstar Canada, Investor Economics conducted its own MER analysis, paring down the fund universe "to compare apples to apples," and excluding segregated funds, wraps, hedge funds and labour-sponsored funds. It found that the average asset-weighted MER has dropped since the beginning of 2001, to 2.02% from 2.09%. "Overall the rise in MERs was fairly modest during the 1995-2003 research period, averaging 17 basis points." Will Icahn be forced to eat his shorts? 07/17/03   Permlink   Broken Link Stocks "Icahn's beef? Trinity, the largest U.S. railcar manufacturer with about 50% of the market, has too much debt and too many internal problems to cope with consolidation and shrinking profit margins. More nimble manufacturers--like Icahn's ARI, of course--can close plants and move production to inexpensive locales like Arkansas, he says." Slim and trim beats the bear 07/17/03   Permlink   Broken Link Funds "It sure helps a mutual fund to be slim and trim when fighting the bear. That's slim as in having a low management expense ratio, or MER. A strong majority of the top-performing funds in the bear market of the past three years share this attribute." Want to refinance your mortgage? Do it now 07/17/03   Permlink   Broken Link Debt "If you're thinking about refinancing your mortgage, do it now. Even if borrowing costs edge lower in the months ahead, you won't regret locking in at today's rates." The great stock market swindle 07/17/03   Permlink   Broken Link Markets "History teaches that virtually every major multi-year advance during the last two centuries ended with a lengthy period of under-performance." Get rich slowly 07/17/03   Permlink   Broken Link Graham "The Intelligent Investor (1949), by financial giant Benjamin Graham, is more relevant than ever, in a new edition updated with analysis by Jason Zweig" Government protects potential killers 07/16/03   Permlink   Broken Link Government "But anyone who looked at the law closely knew what was going on. The definition of disability was so vague that it clearly represented yet another massive encroachment of the government and its courts into the workplace. It made the disabled more expensive and more risky to hire. It made them more difficult to fire, and hence less likely to be hired. If anything, workplace discrimination against them has increased rather than decreased. Employers would rather find sneaky ways to keep them at bay than to risk unending lawsuits." That heartbeat you hear is Xerox 07/16/03   Permlink   Broken Link Stocks "The copier king seems firmly on the road to recovery. Now it needs to keep impressing investors with solid growth, and that's no small challenge." Should the IRS hire private tax collectors? 07/15/03   Permlink   Broken Link Taxes "The Internal Revenue Service wants to hire private collectors to hunt down tax cheats. Skeptics worry about invasion of privacy, high cost and overly aggressive tactics." More pension troubles seen 07/15/03   Permlink   Broken Link Accounting "While pension results continue to decline, the UBS study highlights that not all companies will share this pain in equal measure. A handful of companies, it notes, account for the lion's share of the funding shortfall. Just eight companies in its sample account for 70 per cent of the total pension shortfall -- $11.6-billion out of the $16.6-billion. The pension deficit at these eight companies also is greater than 10 per cent of their market capitalization as of July 7 of this year." Should pensions invest in equities? 07/15/03   Permlink   Broken Link Markets "The pension industry's fascination with the idea that the stock market is a sure thing over the long term remains intact, even as financial economics suggests the contrary. The stock market, say financial economists such as Nobelist Robert C. Merton, is not less risky over the long run. It is, in fact, riskier. However, backed by the belief that the markets will generate higher returns over the long-term, pension managers continue to pour billions into the markets every year." 'Active' managers are closet indexers 07/15/03   Permlink   Broken Link Indexing "Several Canadian funds charge high fees to track indexes." Enron will be outed 07/15/03   Permlink   Broken Link Stocks "When Enron filed for bankruptcy in December 2001, it claimed assets worth $62 billion. That estimate in retrospect turns out to have been off by about $50 billion as the company will, in a filing expected today, say that it has something like $12 billion with which to pay creditors." Attack of the zombie stocks 07/15/03   Permlink   Broken Link Markets "Some of the best performers in the recent bull market are stocks no one wanted just 3 months ago." Wall Street great says the market is broken 07/14/03   Permlink   Broken Link Value Investing "Investing pioneer John Templeton believes there is still huge downside risk to the stock market -- and he's almost as bearish on house prices." Fear of floating 07/13/03   Permlink   Broken Link World "Indeed, from this point of view, the Asian economies are supporting America's profligate habits. By buying American government securities they help finance America's large external deficit, hold down interest rates, and so sustain the boom in consumer spending and mortgage borrowing. This may benefit America in the short term, but it allows even bigger imbalances, in the shape of consumer debt and foreign liabilities, to continue to build. The eventual consequences for America-and the world economy-could be more painful." Scary truths about the graveyard shift 07/12/03   Permlink   Broken Link Management "Night workers make more mistakes and are more prone to accidents and illness than nine-to-fivers. Smart companies are waking up." 10 Questions: Is Your Fund Family the Enemy? 07/12/03   Permlink   Broken Link Indexing "William Bernstein has a message for fund investors: The interests of mutual fund companies are highly divergent from yours." Faster is not always better 07/11/03   Permlink   Broken Link Government "This Concorde was not just the proud enterprise of government, but even the product of a consortium of governments! Accounting being the imponderable, not to say fraud-ridden, sort of activity it is, we will of course never know just how much this grand project took both from the taxpayers supporting it and from the private aircraft manufacturers and airlines competing against it." Why junk is bunk 07/11/03   Permlink   Broken Link Bonds "Like dot-com stocks in 1999, high-yield bonds are priced for perfection. There is no room for disappointment. But anyone who has looked at bankruptcy filings knows there is no such thing as perfection among heavily leveraged borrowers." How hidden risks fostered a crash 07/11/03   Permlink   Broken Link Markets "As Bader-Gold put it: "Financial economics does not recognize equity risk premiums not yet earned for risk not yet weathered." But that is exactly what pension plans, both corporate and public sector operations such as the Ontario Teachers' Pension Plan, have been doing. The result has been a devastating crash in pension values, with fund after fund reporting losses and warning that either contributions will have to increase or benefits will have to be cut. They counted on long-run equity returns that are not guaranteed." How actuaries missed stock risks 07/10/03   Permlink   Broken Link Markets "Their models for long-run pension performance assume, wrongly, that over the long run investments in the stock market will rise fast enough to overcome essentially underfunded pension structures. For years, pension funds operated under the assumption that equities are on a long-term growth track that can be counted on to cover pension liabilities. The market meltdown of the last two years blew the model away, leaving pension plans and corporations facing massive losses that wiped out billions in pension assets across the world." Buffett bids: $80,000 and rising 07/10/03   Permlink   Broken Link Buffett "How much would you pay to slurp Coca-Cola with Warren Buffett, the world's second-richest man and arguably its most famous investor?" Today's high yield, tomorrow's headache 07/10/03   Permlink   Broken Link Bonds "Some investments with high yields promise current income but endanger your principal. It's best to watch total income instead. Here's how." Stock options: the fuzzy new math 07/10/03   Permlink   Broken Link Accounting "It should come as no surprise that companies are aggressively managing option values as the prospect of expensing becomes real. But that's no reason to abandon expensing. Regulators need to devise a way to value options that doesn't give companies an opportunity to engage in self-serving guesswork. Without that, the calculation will distort the real cost of stock options -- exactly the problem expensing was meant to solve." Women vs. Wal-Mart 07/10/03   Permlink   Broken Link Law "How can the retailer reconcile its storied culture-built on inspirational leadership, autonomy, and trust-with the anger of some of its female workers?" Canada's fund fees called 'criminal' 07/10/03   Permlink   Broken Link Indexing "Truth number one is that active investing is a loser's game. "It must be so," Swedroe says. Simple math shows that in aggregate, active managers must lose. In aggregate active and passive managers must generate the same gross returns but once various expenses and tax effects are included, active managers do worse. MERs are the biggest expense but active managers also must bear four other costs, including trading commissions, the bid/ask spread and the drag on performance created by holding cash." How to avoid another risk trap 07/10/03   Permlink   Broken Link Markets "Over the long run, the risks in the stock market are not lower. The longer the time horizon, in fact, the higher the risk. This startling conclusion is not new. Some economists, including Nobelist Robert Merton and Paul A. Samuelson, raised the issue years ago. More recently, financial economist Zvi Bodie, of Boston University, among others, has written numerous papers warning long-term dependence on the stock market is a high-risk strategy that could go wrong." You're footing the bill for fund trailer fees 07/10/03   Permlink   Broken Link Brokers "Hope you're getting great service from the financial adviser or dealer that sold you your mutual funds. After all, you're paying for it." Cost matters 07/10/03   Permlink   Broken Link Funds "Financial products are perverse creatures. Virtually every other product in the world features higher costs for higher quality. BMWs cost more than Chevrolets for a reason- they're better cars. Investments are generally just the opposite: the more they cost, the worse they are. This is where the economics professor in me feels the need to disclaim the previous statement with the Latin axiom ceteris paribus- all else being equal. Of course, all else is not equal, and some managers do very well in spite of high fees, while others do rather poorly in spite of low fees, but as a general rule, the axiom holds." High MERs can be justified 07/10/03   Permlink   Broken Link Funds "If you're not demanding a whole suite of services and you have a decent amount of a portfolio you should be able to negotiate a fee quite a bit lower, whereas, if you're really asking for comprehensive planning and regular follow-up meetings, the price is going to be higher, and frankly, whether somebody is paying a lot, or not on their portfolio truly can only be assessed on a case-by-case basis, based on those factors." Mutual fund scandal? Enough of the blame-game 07/10/03   Permlink   Broken Link Funds "Mutual fund managers are, in aggregate, a reasonably large slice of the overall stock market. Depending on whose measure you use and which market you are talking about, mutual funds amount to 50% or more of the money in the market. That being the case, by definition the industry must offer the market's performance, less the industry's average management fees -- and that is exactly what we see. While you or I might think that 3.5% average management fees are inordinately high, consumers are freely choosing funds with such high fees; no one is hiding such fees from them." But it's still best to switch to low fee funds! Patent bending 07/08/03   Permlink   Broken Link Law "As Benjamin Day, Henry Ford, and Sam Walton might attest, American corporations have thrived on innovative ideas and new business methods, without owning them, for two centuries. In the past decade, the balance has been upset. The scope of patents has been expanded, copyrights have been extended, trademarks have been subjected to bizarre interpretations." China's currency consequences 07/07/03   Permlink   Broken Link World "All the talk--most notably from Treasury Secretary John Snow--of the need for China to allow its currency to rise against the U.S. dollar could have unintended consequences. It could crimp earnings of U.S. companies making products in China or buying cheap components there. In a worst-case scenario, it could trigger a reverse Asia crisis, with currency speculators betting that China's renminbi and other Asian currencies would rise, not betting they would crash." U.S. targets big names in fighting abuse of tax shelters 07/07/03   Permlink   Broken Link Taxes "The U.S. government is pressing a broad assault on the flourishing tax-shelter business with an array of high-profile summonses and civil suits aimed at stopping cheats who are getting away without paying many billions of dollars in taxes." There are escapes from deferred sales charges 07/06/03   Permlink   Broken Link Funds "You may blissfully own a DSC fund and never once think of having to get out. But what if your investing needs change, or what if the fund's brilliant manager finds a better gig somewhere else, or what if the fund's performance turns consistently rancid?" Succeeding as investors in spite of ourselves 07/05/03   Permlink   Broken Link Indexing "Human beings are wonderfully suited for many things. We've developed language, conquered gravity and made the most of our opposable thumbs and infinite imaginations. What we're not terribly good at, though, is overcoming our own worst impulses - particularly as investors." The extraordinary lightness of banking 07/05/03   Permlink   Broken Link Banks "Times are tough, right? Try telling America's big banks, which are raking in record profits. Luck has played a big part." Malls: Death of an American icon 07/04/03   Permlink   Broken Link Real Estate "If you spent your formative years at the local shopping mall sipping Orange Julius and hanging out near the ubiquitous water fountain, you might be sad to learn that the mall as you know it is headed toward extinction." The blame game 07/04/03   Permlink   Broken Link Funds "A little-noticed guilty party in the stockmarket's boom and bust" Can Dunkin' KO Krispy? 07/03/03   Permlink   Broken Link Stocks "In the war of the doughnuts, the reigning champ has been getting bopped by the upstart. Now, Dunkin' Donuts is plotting a new offensive." The $0.99 Empire 07/03/03   Permlink   Broken Link Stocks "Houseplants, hair gel, and the best deal on wine you'll ever find. How one entrepreneur is rewriting the rules of retail." No golden days 07/03/03   Permlink   Broken Link Government "Most American states have now closed the books on fiscal 2003, after a year of slashing spending and raising taxes. But their financial woes will not go away in 2004, especially in budget-less California, which is $38 billion in the red." Another take on wrap accounts 07/03/03   Permlink   Broken Link Brokers "Dan Hallett, president of Windsor-based Dan Hallett & Associates Inc., says assessing the worthiness of wrap programs depends on how much is invested, advisor flexibility on fees, and the program sponsor's co-operation in allowing such flexibility." Shareholder democracy is no demon 07/02/03   Permlink   Broken Link Management "Corporate America's objections to an SEC proposal to let investors more easily nominate board candidates are way overwrought." Margin of safety in the asset-class era 07/02/03   Permlink   Broken Link Graham "No concept is more associated with Graham than the "margin of safety": that extra cushion of value which minimizes the probability of underperforming the default option of the prudent, risk-averse investor-the high-grade corporate bond." The policy portfolio's role in an era Of subdued returns 07/02/03   Permlink   Broken Link Indexing "If I have learned anything in my 52 years in this marvelous field, it is that, for a given individual or institution, the emotions of investing have destroyed far more potential investment returns than the economics of investing have ever dreamed of destroying." Fed's truly scary idea: tax you into spending 07/01/03   Permlink   Broken Link Government "It's positively diabolical. Some Dallas Fed economists suggest perking up the economy by taking a piece of every dollar you have the gall to save." Hunting Goodwill 06/30/03   Permlink   Broken Link Stingy Investing "Watered stock is an old fashioned term that describes shares of companies with drastically overvalued assets. Reportedly, the term originates with the practice of ranchers feeding their cattle large amounts of water before going to market where the water-induced weight would fetch a higher price. Naturally, the buyer is not happy with this process. The crafty promoter can't take a stock to the pond for a fill up, but there are a variety of ways to mark up assets. A potential source of asset inflation is goodwill, which can be uncovered by investors who are willing to do a little work." Shareholders are no fools - anymore 06/29/03   Permlink   Broken Link Stocks "Investors have long been seen as too dumb to have a say in how a firm is governed. That's changing." 10 biggest summer spending blunders 06/29/03   Permlink   Broken Link Thrift "Amid the lazy days and sunny hours ahead lurks an insidious evil -- the urge to overspend on just about everything. Fun-seekers, beware: It can creep up on you like a tight swimsuit." Quite the Contrarians 06/27/03   Permlink   Broken Link Dreman "You can see why it's cool to be contrarian: Fund manager David Dreman tracked market opinions of experts going back to 1929, and found that the consensus was wrong 77% of the time." Fannie's future is still bright 06/26/03   Permlink   Broken Link Stocks "A storm of controversy at sibling rival Freddie Mac has dragged down shares of Fannie Mae. Now investors have a chance to profit." Turn $1 a day into $67,815 06/26/03   Permlink   Broken Link Thrift "Want a foolproof way to turn $1 a day into $67,815? It doesn't take a lot of money or time or personal sacrifice. There's no magic, no multilevel marketing and no salesman will call at your door." The psychology of human misjudgment 06/25/03   Permlink   Broken Link Munger "And I came here because behavioral economics. How could economics not be behavioral? If it isn't behavioral, what the hell is it? And I think it's fairly clear that all reality has to respect all other reality. If you come to inconsistencies, they have to be resolved, and so if there's anything valid in psychology, economics has to recognize it, and vice versa. So I think the people that are working on this fringe between economics and psychology are absolutely right to be there, and I think there's been plenty wrong over the years." Management fees an eye-opener 06/25/03   Permlink   Broken Link Trusts "With compensation out of line, trusts will find it hard to gain credibility." Bring back the guild system? 06/25/03   Permlink   Broken Link Government "All of these examples of genuine exploitation amount to one of many reasons that free-market economists hold the beliefs that they do. The greater the scope of state activity, the greater the potential for each pressure group to use the state apparatus for its own enrichment, at the expense of the rest of society. Since the benefits that accrue to such pressure groups from their political agitation are sizable and concentrated, while their costs are dispersed and hidden, the tendency over time is for more and more of this kind of activity to go on at the expense of the ordinary person." 3 Best Buy rivals look like better buys 06/25/03   Permlink   Broken Link Stocks "The electronics giant dwarfs its competitors. But its stock sells at a premium, while competitors Tweeter, Ultimate Electronics and particularly Circuit City look like deals in comparison." Here's 77,000 reasons to pay GST 06/24/03   Permlink   Broken Link Taxes "One of Mr. Ingram's clients was hit two months ago with a notice from Canada Customs and Revenue Agency, saying he owes $77,000 in unpaid GST going back 12 years to 1991 including interest and hefty penalties." New quizzes enhance investor know-how 06/24/03   Permlink   Broken Link Education "InvestorED.ca's Interactive Centre now offers a series of new quizzes designed to help investors protect themselves from fraud." Longtime bear not changing his negative attitude 06/24/03   Permlink   Broken Link Markets "Bubbles disappear completely. Showing graphs of different bubbles versus their trend lines, Grantham points out that every bubble is symmetrical. If prices rise 100 percent, 200 percent or 300 percent over their trend, bursting the bubble ends with a retreat that goes back to the trend line. Then it continues and goes below the trend line." Reaching for yield 06/24/03   Permlink   Broken Link Grant "People believe that bonds are inherently conservative. Not so. They are conservative at a price, and these aren't the right prices." Canadians use home equity to take out $22-billion 06/23/03   Permlink   Broken Link Debt "Canadians are using the rising value of their homes and the plunging cost of loans to take on debt at an unprecedented rate, according to a new report by economists at CIBC World Markets." Peer pressure keeps the pros gambling 06/23/03   Permlink   Broken Link Markets "Worried about missing the rally? Worry instead about the money managers who risk your savings to keep up with the pack." A matter of trust 06/23/03   Permlink   Broken Link Trusts "The Globe and Mail's extensive investigation of income funds reveals a shaky world of investments, where companies tap their bank credit lines to maintain distributions, external managers continue to reap great rewards from lucrative contracts, business structures can be best described as inscrutable and the tight focus of single-industry trusts is proving to be their downfall." Nobody wants you when you're down and out 06/23/03   Permlink   Broken Link Markets "As big a drop as that was, a Standard & Poor's study of the S&P 500 found that stocks lose an average of 11.7% in the days leading up to removal from the index (see chart). Canadian stocks weren't included in that study. But as S&P cut more than 70 companies from the Toronto index over the past year for failing to meet minimum listing requirements, it wasn't unusual to see prices drop between 15% and 20% in the two weeks around the time of deletion. A short time later, many recouped some of their losses." Earnings shortage 06/22/03   Permlink   Broken Link Dreman "Euphoric profit forecasts have driven the market up far too high--especially for Nasdaq 100 stocks. A closer look at them is sobering. Go for value." Good Morning, Indonesia 06/22/03   Permlink   Broken Link World "Indonesia has issues: separatism, terrorism, governance, corruption. No wonder foreign investment has been fleeing the country in recent years." Consider an Alberta trust even if you don't live there 06/22/03   Permlink   Broken Link Taxes "The key to taking advantage of Alberta tax rates, short of moving to Alberta, is to establish a trust that is resident in Alberta. You can then transfer certain income-producing assets to this trust. Since the trust will be resident in Alberta, income earned in the trust will be taxed at Alberta tax rates." Beware the hidden costs of refinancing 06/20/03   Permlink   Broken Link Debt "Many of today's homeowners are chasing low interest rates in fiscally foolish ways. What you don't know about the refinancing game can cost you dearly." Tech trouble ahead 06/19/03   Permlink   Broken Link Stocks "Technology stocks have been cruising ahead of the market lately. But watch out. We found four to dump--before the happy trails end." Investors ignore risks 06/19/03   Permlink   Broken Link Trusts "Securities regulators are looking to tighten rules for income trusts amid concerns the public might not fully appreciate the risks associated with the popular investment vehicles." Blue food blues 06/19/03   Permlink   Broken Link Fun "'Simply put, they're not what a potato is supposed to be.' This is how H.J. Heinz pitched Funky Fries -- the weird chocolate-flavored and blue-colored fries -- to the world last year." 'Non-competition' payments may be tax-free 06/19/03   Permlink   Broken Link Taxes "The moral of the story? You may want to build a non-competition payment into a deal if you're thinking of selling shares soon. The Manrell decision may be appealed to the Supreme Court of Canada, so this tax-free treatment may not last forever. By the way, the same tax-free treatment will not extend to employees who receive a non-competition payment on leaving an employer. Those payments will be considered employment income." Germany's euro test 06/19/03   Permlink   Broken Link World "Whatever the economic arguments for Britain's joining the euro, the case for Germany's quitting looks stronger. The idea that Germany will do it is, of course, the stuff of fairy tales. However, the country's present predicament also has a fairy-tale feel, with the ECB in the role of the wicked witch who lured Hansel and Gretel into her gingerbread home with the aim of eating them. In the story by the Brothers Grimm, Gretel pushes the witch into the oven. In the real world, Germany is being roasted, and risks living unhappily ever after." University of Phoenix Online: Swift Rise 06/18/03   Permlink   Broken Link Academia "The Net-based college is parlaying its head start in the nascent field into rapid growth and premium prices. Can it keep soaring?" A value beyond money 06/17/03   Permlink   Broken Link Academia "A posse of professors has been debating business plans. What a pity social worth and personal satisfaction received so little attention." What would Graham buy now? 06/16/03   Permlink   Broken Link Graham "Benjamin Graham would understand how investors feel today. He was the victim of an earlier bubble. After producing stellar investment returns in the 1920s, Graham's portfolio lost 70 percent of its value in the three-year market slump that followed the crash of 1929." Front-end funds gain support 06/16/03   Permlink   Broken Link Funds "A handful of advisor firms offer lower-fee front-end loads, rather than the prevailing optional-load model" Short memories, deep pockets 06/15/03   Permlink   Broken Link Bonds "If the American economy falls back into recession, corporate spreads and defaults will obviously rise. The really troubling question for investors is whether they will do so if the economy picks up and interest rates rise to more normal levels. Either way, corporate bonds at current spreads look expensive. And so does Russia." S&P study shows cheaper funds outperform 06/14/03   Permlink   Broken Link Funds "S&P reported that, on average, funds with lower expense ratios have outperformed their more expensive peers in eight out of the nine domestic fund style categories over a one, three, five, and ten-year annualized basis." When "sell" means "buy" 06/12/03   Permlink   Broken Link Brokers "According to a recent study, in 2000 and 2001, "buy" recommendations from Wall Street analysts underperformed the market by an annualized average of more than 7%. That, in itself, isn't news to burned investors. But more interestingly, their "sell" recommendations outperformed the market by an annualized average of 13.4%. In plain terms, the stocks that analysts told people to avoid actually outperformed the ones they were bullish about by an average of 20.5% per year." Why Freddie's mess matters 06/12/03   Permlink   Broken Link Derivatives "The turmoil and shake-up at mortgage giant is raising fears of deeper problems. Here's a guide to the central issues and concerns." Mutual fund study 'misleading' 06/12/03   Permlink   Broken Link Funds "A recent study that suggests management fees on Canadian mutual funds have risen sharply over the past eight years is "highly misleading," the Investment Funds Institute of Canada said yesterday." Fund industry isn't reasonable when it comes to fees 06/12/03   Permlink   Broken Link Funds "One thing you have to admire about the mutual fund industry is the way it flouts the natural laws of economics and business." What Canadians pay for fund management 06/12/03   Permlink   Broken Link Funds "See what the data show in the Morningstar Survey of Canadian Fund Industry Management Expenses." Fees top $10-billion last year 06/12/03   Permlink   Broken Link Funds "Fund investors paid more than $10-billion in management fees last year, more than 3.5 times the amount paid in 1995, according to a report from Morningstar Research Inc." The accidental CEO 06/12/03   Permlink   Broken Link Stocks "She was never groomed to be the boss. But Anne Mulcahy is bringing Xerox back from the dead." Borrowers face an adjustable-rate time bomb 06/12/03   Permlink   Broken Link Debt "That low interest rate may feel good now, but a variable-rate loan may come back to haunt you, especially if you stretched to afford it. Locking into a fixed rate could help you in the long run." Stronach has most votes, least shares 06/11/03   Permlink   Broken Link Stocks "Power of multiple votes: Financial Post study ranks voting control against equity stakes" Coxe skewers Wall Street swindlers 06/11/03   Permlink   Broken Link Brokers "Shills and mountebanks, beware -- after 31 years in the investment business, veteran investment strategist and columnist Don Coxe has published his first book." Advisors may be threat to pensions 06/11/03   Permlink   Broken Link Retirement "A bigger threat to your government pension may be opportunistic financial advisors who are taking advantage of pension paranoia to urge members to cash out of their plans to take a flyer on some dubious alternatives." Old raiders never die--they just get even 06/11/03   Permlink   Broken Link Stocks "Oscar Wyatt lost a ton of money on El Paso. Now he's trying to throw the bums out. And he just may succeed." Sour dough 06/11/03   Permlink   Broken Link Stocks "Great Canadian Bagel was once the hottest chain in the country. But its business plan went stale fast--and many franchisees were left holding the bag." Down and out in white-collar America 06/10/03   Permlink   Broken Link World "Professionals have never had a tougher time finding a job. It's not just the economy; the rules of the game are changing." Asset base decline erases good old days in fundland 06/10/03   Permlink   Broken Link Funds "This is how far the mighty in the mutual fund industry have fallen: Right now, the largest fund in the country is a plain old money market fund." My big, fat, cheap wedding 06/09/03   Permlink   Broken Link Planning "Don't let that simple, charming backyard event transform itself into a snarling, cash-sucking monster. Here are my secrets: how I've cut $15,000 in expenses for the big day." Taxpayer, beware! 06/09/03   Permlink   Broken Link Taxes "Washington will soon be taking back a good chunk of that new tax cut. How? By using the sneakiest trap it's got: the Alternative Minimum Tax." The money printers 06/09/03   Permlink   Broken Link Grant "Fearing Japan-style deflation Greenspan's Fed is buying Treasurys with dollars it mints for that purpose. Bondholders and other creditors should beware." Know when to yield 06/08/03   Permlink   Broken Link Bonds "Go ahead and buy your own corporate bonds, but make sure you're not overpaying your broker" A new breed of planner evolving 06/08/03   Permlink   Broken Link Brokers "Although planners have seen the assets on their books dwindle in the past few years, the number of clients they serve in order to maintain that shrinking revenue has remained the same. Despite the drop in assets, the average client base is more or less unchanged from last year at slightly more than 300. This also contrasts sharply with 2000, when the average planner had only 223 clients, reflecting the influx of newcomers to the business." You still need bonds, but they've had a good run 06/08/03   Permlink   Broken Link Bonds "This "bond bubble" thing is very confusing. You know you're supposed to have fixed income in your portfolio, and yet you keep reading about how bonds are dangerously overvalued." A dangerous offer 06/06/03   Permlink   Broken Link Derivatives "What is Wall Street thinking? After being pummeled for selling bum stocks to investors, the big firms are now trying to peddle arcane and little-regulated credit-derivatives products to Main Street (yup, the same type of stuff that Warren Buffett recently called financial "weapons of mass destruction")." How to buy into Buffett on the cheap 06/05/03   Permlink   Broken Link Buffett "Warren Buffett's Berkshire Hathaway shares may be a lot cheaper than they look. Meantime, here are two intriguing alternatives for investing just like the legend." The best investors you've never heard of 06/05/03   Permlink   Broken Link Indexing "Here's how Barclays Global beats the market--and why you can't." 10 stocks the insiders are still buying 06/04/03   Permlink   Broken Link Stocks "The people who know their companies best are mostly selling into the rally, but those who follow insider trades say some are still snapping up shares." Insider selling hits 2-year high 06/04/03   Permlink   Broken Link Markets "Stock sales by corporate officers hit a 24-month high in May, according to Thomson Financial, during a month when the U.S. stock market rose to its best level in nearly a year." The Martha mess becomes a monster 06/04/03   Permlink   Broken Link Stocks "With Stewart's indictment, the big question hanging over her company and investors is: Will they have to get along without her?" Getting stretched 06/03/03   Permlink   Broken Link Markets "If you look at earnings under generally accepted accounting principles, the S&P 500 is trading a price-to-earnings (P/E) ratio of 31.4, up from 27.5 at the end of March. Before 1998, it had never been above 30. If you are a kind and forgiving person, you can use pro forma earnings -- the numbers that companies post before charges for stuff like plant closings, layoffs, and the like. On that basis, the S&P's P/E is 19.7, a level rarely seen before the gaga years of the late 1990s." Can stocks defy gravity? 06/03/03   Permlink   Broken Link Markets "That's what Wall Street wants you to believe. Don't buy it. The best minds say the market will rise, but it won't soar." Study decries labour funds 06/03/03   Permlink   Broken Link Funds "The research paper -- Incentive Fees, Valuation and Performance of Labour Sponsored Investment Funds -- skewers the notion inferior performance of LSIFs is compensated by tax credits of 30% in many provinces (and 35% in some cases). Not only have LSIFs underperformed other investment funds, but they've also been beaten by the market indexes." Shun deferred sales charge funds 06/01/03   Permlink   Broken Link Funds "How to describe deferred sales charge mutual funds... Dumb? Stupid? Crazy? DSC funds are all of these and more." Most brokerage stock picks underperform S&P500 06/01/03   Permlink   Broken Link Brokers "The study, which analyzed data from quarterly surveys prepared by Zacks Investment Research and published in The Wall Street Journal, found that the average compounded quarterly return for recommended stocks was 2.17%, with the S&P 500 performing marginally better at 2.26%. The study also found that the variability of recommended stock returns is greater than the S&P 500." US states face long-term budget shortfalls 05/29/03   Permlink   Broken Link Bonds "Concern over the worsening cash crunch and growing unease over the long-term outlook has driven the spread between yields on state and local municipal bonds and US Treasuries to seven-year highs and helped to put downward pressure on most state credit ratings. But another finding of the analysis is that credit ratings bear little or no statistical relationship with long-term imbalances." Is the tax cut for real? 05/29/03   Permlink   Broken Link Government "Polls suggest that only 45 percent of the public backs the tax bill signed by President Bush, which means that a majority are against it, indifferent, or confused. Now, we can dismiss the idea that people don't want tax cuts. After all, if people wanted to pay taxes, we could just make them voluntary and be done with it. They are called taxes because people are being forced to pay for something they would otherwise not pay for. Asking people if they want a tax cut should be like asking if they want less mugging." Manana economics 05/29/03   Permlink   Broken Link Economics "'The principal forecast has been the maqana forecast,' said former Federal Reserve economist Lacy Hunt, now chief economist with Hoisington Investment Management in Austin, Tex. Maqana is the Spanish word for 'tomorrow,' which is when forecasters have consistently said the U.S. economy would get back to full strength." The perils of a weak dollar 05/28/03   Permlink   Broken Link World "Yes, there could be a big upside. But it risks economic warfare and `beggar thy neighbor' policies. That's political trade, not free trade." Shareholders unite to expense options 05/27/03   Permlink   Broken Link Management "Investors are mounting spirited campaigns to make tech companies cost out their options. Congress and regulators should pay attention." Another honest broker quits 05/27/03   Permlink   Broken Link Brokers ""Joe" says his bank should get out of the brokerage business. Stan is not alone. The following is another resignation letter from an advisor formerly employed by a big bank brokerage." Corporate Babble 05/26/03   Permlink   Broken Link Fun "The first was a recall notice released by Ford, which informed the world of potential steering problems with some of its pick-up trucks and Expeditions. How's this for a diagnosis? "In the small number of these vehicles in which the intermediate steering shaft yoke was not properly installed, the result ultimately may be a disconnection of the intermediate steering shaft from the steering gear." The Babbler assumes that means the steering wheel has all the responsiveness of the free-spinning ones mounted on those little kiddie cars outside of grocery stores. But don't worry; it's only a "high-mileage durability issue."" Are you a refi junkie? 05/26/03   Permlink   Broken Link Debt "Refinancing is all the rage. But when does this savvy financial move become a short-sighted mistake?" Pension plans face $225-billion shortfall 05/24/03   Permlink   Broken Link Stocks "Canada's public and private pen-sion plans are facing a collective funding shortfall of $225-billion - an amount roughly equal to 20 per cent of the nation's gross domestic product - new estimates com-piled by three major benefit con-sulting firms show. Closing that funding gap will require billions of additional dollars from plan sponsors and perhaps employees, the research warns. It puts the extra funding demands at 2 per cent of GDP annually over the next 15 years, provided there are no further gains or losses." Exchange-traded funds are suddenly looking good again 05/23/03   Permlink   Broken Link Funds "Before we get into a more detailed look at how ETFs and fund returns compare, it's worth a quick look at what ETFs have going for them. First, they simply strive to match the same returns as a target stock index, whereas equity funds employ a fund manager to actively pick stocks. Some fund managers can beat their benchmark stock indexes over a long period, but many can't. A major reason for this is that fund expenses reduce the net return to investors. Whereas the average large-cap Canadian equity fund management expense ratio is 2.51 per cent, the i60 charges just 0.17 per cent." It pays to inspect annual reports 05/23/03   Permlink   Broken Link Stocks "Next, we come to the real guts of the annual report -- the consolidated balance sheet, statement of earnings and cash flows, plus the all-important notes to the financial statements. Here's a brief explanation of each" A reason to be lazy this summer 05/23/03   Permlink   Broken Link Fun "After writing a book (My Job, My Self, Routledge, 2000) that established once and for all that we are what we do, Al Gini decided that we work too much." Tweedy, Browne Annual 05/23/03   Permlink   Broken Link Value Investing "Favorable or unfavorable historical investment results in comparison to an index are not necessarily predictive of future comparative investment results. In Are Short-Term Performance and Value Investing Mutually Exclusive?, Eugene Shahan analyzed the investment performance of seven money managers, about whom Warren Buffett wrote in his article, The Superinvestors of Graham and Doddsville. Over long periods of time, the seven managers significantly outperformed the market as measured by the Dow Jones Industrial Average (the "DJIA") or the Standard & Poor's 500 Stock Index (the "S&P 500") by between 7.7% and 16.5% annually. (The goal of most institutional money managers is to outperform the market by 2% to 3%.) However, for periods ranging from 13 years to 28 years, this group of managers underperformed the market between 7.7% and 42% of the years. Six of the seven investment managers underperformed the market between 28% and 42% of the years. In today's environment, they would have lost many of their clients during their periods of underperformance. Longer term, it would have been the wrong decision to fire any of those money managers." True believers in Value Investing 05/22/03   Permlink   Broken Link Value Investing "In William Browne's office is a framed photo of a young Bill Gates, sitting on an airplane reading The Intelligent Investor. That America's richest man had been studying Browne's favorite book brings a smile to the face of the Tweedy, Browne Global Value Fund manafer. The book's author, legendary value investor Benjamin Graham, was once a Tweedy, Browne client." Patient Capital Management Q1 05/22/03   Permlink   Broken Link Value Investing "Our long-term focus leads to low transaction costs and is tax efficient. These benefits are very tangible and go directly to your portfolio's bottom line return. A very low turnover strategy such as ours is beneficial in many other ways. We do not spend much time on the phone executing transactions. This allows us to focus on analyzing companies and searching for value instead of monitoring the minute-by-minute movement of stock prices. Our investment philosophy allows us to run Patient Capital very efficiently." What is wealth inequality? 05/22/03   Permlink   Broken Link Economy "Nowhere is this convergence more apparent than at the grocery store and in restaurants. For virtually every high-end item, be it a fine cut of meat, specialty spaghetti sauce, whole-grain bread, fresh-ground coffee, or fine liquor, there is invariably a cheaper substitute with almost identical physical, temporal, and spatial characteristics. The list of high-end goods for which we can find cheaper substitutes of virtually identical quality is endless; and the common man of today enjoys fineries of which the most powerful kings of yesteryear couldn't dream." Cundill fund successful with unloved firms 05/22/03   Permlink   Broken Link Funds "James Morton, value investor and lead manager of the Mackenzie Cundill Recovery Fund, which has sailed comfortably through the bear market, says he's happy to be known as a "bottom-fishing contrarian." The term bottom fisher fits because he buys companies when their stock prices are "bombed out." Contrarian is also apt because his choices tend to be unloved market orphans." Tobacco stocks live to fight again 05/21/03   Permlink   Broken Link Stocks "Shares of "Big Mo" surged from January 2000 through mid-2002, while the rest of the market was tanking. On Wednesday they were back in the limelight, leaping almost 10 percent to $38.30 after a Florida appeals court threw out a record $145 billion punitive damages award against the industry." Money funds: moving to the red zone? 05/21/03   Permlink   Broken Link Funds "If rates go any lower, standard fees may begin to eat up gains this year. Money-market managers could waive fees -- but only for a while." How to avoid fees 05/21/03   Permlink   Broken Link Funds "I think Canada's largest fund company by assets has done something useful by raising fees at this time of dismally bad returns. Buying funds with a deferred sales charge is a bad move, and the Investor Group fee grab underscores this point nicely." Executive pay: labor strikes back 05/20/03   Permlink   Broken Link Management "Call it the revenge of the battered shareholder. Across Corporate America, proxy resolutions aimed at curbing CEO pay are winning unprecedented victories. Most are sponsored by union and public pension funds, which are capitalizing on investor ire over fat pay packages at poorly performing companies. So far, they've scored more than two dozen majority votes on issues such as golden parachutes and expensing stock options, vs. two last year. "Shareholders are saying, 'I'm mad as hell and I'm not going to take it anymore,"' says shareholder activist Nell Minow." Only the weak survive 05/20/03   Permlink   Broken Link World "Despite various protestations that the strong dollar policy is the same as it ever was, it's pretty clear that the Bush administration and the Federal Reserve are happy to see the greenback's decline." MCI shareholders jump the payout line 05/20/03   Permlink   Broken Link Law "The SEC wants to impose a half-billion dollar penalty on the telecom giant and use the money to compensate investors. Creditors will howl." After-tax returns are what matter to fund investors 05/20/03   Permlink   Broken Link Funds "The study examined more than 340 Canadian-managed equity and balanced mutual funds that had a track record over the period 1991 to 2001. The average rate of return on those funds over that time was 9.01 per cent compounded annually, before taxes. But you've got to realize that many of those funds made taxable distributions over that 10-year period. In fact, the average fund lost a full 1.35 per cent, compounded annually, to income tax on distributions alone (assuming the highest tax bracket), with the result that the true rate of return, after taxes, was just 7.66 per cent when investing outside of a registered plan." A taxing truth 05/18/03   Permlink   Broken Link Funds "Reading the latest report from Lipper on the effect of taxes on mutual fund returns is not unlike studying those tables that list the amount of heat produced by various kinds of chili peppers: We knew those suckers hurt, and now we know just how much. Over the 10 years through 2002, the typical equity fund returned an annual average of 6.8%, after accounting for sales charges and management fees. Factoring in taxes owed on that fund's yearly distributions, however, plus capital-gains taxes owed when fund shares are sold, knocks that return to just over 5% a year for investors in the highest tax bracket. (Fixed-income funds show similar results.) Bottom line: We've given the government about 25% of our gains, which weren't great to begin with." Wall Street's trust fund is tapped out 05/17/03   Permlink   Broken Link Brokers "How naive we were. In the just-announced global settlement, the enforcement bodies alleged that some big banks had been paying one another to issue positive "research" about clients. The banks didn't admit or deny the allegations, though news accounts quoted industry insiders acknowledging the practice." The sage goes to asia 05/17/03   Permlink   Broken Link Buffett "Warren Buffett just invested a bundle in a Chinese oil company. Did he pick the wrong one?" Financial advice: the sacred trust 05/17/03   Permlink   Broken Link Brokers "It should go without saying that the advice dispensed should be in the best interests of the client. After all, if a customer is paying for advice through stock commissions or mutual fund trailer fees, he should at least be receiving top notch, truly independent advice.Sadly, however, this utopian state of affairs is a pipe dream in Canada. Too often, financial advice is seen as the ticket to building the retirement of the advisors rather than the retirement of his or her clients. Worse, with many products and services available today, what pays the advisor best is often not the optimum product for the customer." If all else fails, give the fund a new name 05/17/03   Permlink   Broken Link Funds "But the public still falls for simple name changes, say the Purdue academics, who note that after a name change, many funds actually perform worse. The authors conclude 'the implication for fund managers desiring to increase flows is unambiguous: make a hot style name change and advertise it if you want the biggest possible increase in flows.'" Trusts face questions as markets sour 05/16/03   Permlink   Broken Link Trusts "Naysayers of these trusts say the product was flawed from day one, mainly because the cost of the forward contract left the trusts with only 40% to 50% of the original investment with which to generate annual returns of 8% to 10%. This meant the trusts had to return in excess of 19% annually, and without the aggressive and dangerous use of put and call options, this was an improbable if not impossible feat." Tripping over pension shortfalls 05/15/03   Permlink   Broken Link Stocks "Underfunded plans have led companies like US Airways into bankruptcy and will compromise others' credit ratings and spending plans." Madly off in all directions 05/15/03   Permlink   Broken Link Law "There is only one thing that provincial securities regulators in Canada can agree on--to disagree." Fat chance 05/15/03   Permlink   Broken Link Law "As we observe the current frenzy of lawyers preparing to sue McDonald's and Burger King-and even suing Kraft Foods, the maker of Oreos-for allegedly causing their clients to suffer from obesity, we cannot help but wonder what lunatics have taken over the U.S. legal system." Painting itself into a corner 05/14/03   Permlink   Broken Link Economy "Improved standards of living come to the public from the fruits of capital investment. Increased productivity tends to lower prices (and costs) and thereby distribute the fruits of free enterprise to all the public, raising the standard of living of all consumers. Forcible propping up of the price level prevents this spread of higher living standards." When a skeptic says, 'Buy!' 05/14/03   Permlink   Broken Link Accounting "To determine whether to pick or pan a stock, Meyer usually starts with the proxy statement. "I want to see that management owns a lot of stock and has modest salaries by industry comparisons," he says. "I also don't want to see any self-dealing or related-party transactions where the CEO owns an airplane the company leases from him." It was in Tyco's proxy that Meyer first became suspicious after reading that former CEO Dennis Kozlowski received a $65,000 fee to serve on the company's board." Sales pitch disguised as good advice 05/14/03   Permlink   Broken Link Brokers "You don't pay financial advisors for their advice, you pay for the execution of their advice. Watch for these red flags that may really be a sales pitch disguised as advice" Funds score dramatic turnaround in April 05/14/03   Permlink   Broken Link Funds "Battered mutual fund investors received good news in the wake of April markets. Nine out of every 10 funds and 26 of 32 Morningstar Canada Fund Indices gained ground for the month. This is a big change from the first quarter, when 91% of funds and 26 of the indices were in the red." Better be sure you can pay the bill 05/14/03   Permlink   Broken Link Debt "Welcome to the great Canadian debt pigout. Mortgages, lines of credit, loans, credit cards -- you name it, people are using it to take on debt.Does debt Armageddon await? Some people are definitely going to struggle if interest rates move higher, but Canadians are in surprisingly good shape over all." Bonds away 05/13/03   Permlink   Broken Link Bonds "Investors have been rushing headlong into fixed income, but there are plenty of pitfalls to watch out for" Buffett hits back at Greenspan 05/13/03   Permlink   Broken Link Buffett "Warren Buffett, the billionaire investor, has unleashed a further blistering attack on the use of derivatives by banks, arguing that the complex financial instruments could pose significant risks for the health of the global economy." $20 bill gets a facelift 05/13/03   Permlink   Broken Link Government "The $20 bill got a facelift Tuesday, complete with new colors, a new number arrangement and a new background, in the government's latest effort to thwart counterfeiters." Deflation cure sickens dollar 05/11/03   Permlink   Broken Link Grant "The Federal Reserve is acting as if the U.S. were facing Japan-style deflation. With the CPI up 3%, the real problem is in the other direction." Bogle in exile 05/09/03   Permlink   Broken Link Bogle "Jack Bogle, who turned 74 yesterday, is the Warren Buffett of the mutual fund industry, the People's Choice, the most trusted man in the fund business at a time when trust is at a low ebb. If investors still adore this man who invented the index fund and has championed low-cost investing for decades, the industry has turned its back on him." 2003 Wesco annual meeting 05/09/03   Permlink   Broken Link Munger "Why do people come? Partly, I'm sure out of respect for the long-term record of compounding money at high rates. But also there's the cast of mind that helped create the record. I'm very sympathetic to people who share our twists of mind. If you're Warren Buffett and Charlie Munger, you're lonely. The whole of academia, business and economics believe a lot of things we don't believe at all, and conversely don't believe a lot of things we do believe." Buffett: Do as I say, not as I did 05/08/03   Permlink   Broken Link Buffett "When Warren Buffett launched his latest campaign against excessive CEO pay, he first anticipated an inevitable question: how has Buffett's own record been on this issue? "Not so good," was his answer." 2003 Berkshire Hathaway annual meeting 05/07/03   Permlink   Broken Link Buffett "This is not a transcript. No recording devices were allowed at the meeting, so this is based on many hours of rapid typing, combined with my memory (egads!). I have reorganized the content of the meeting by subject area. All quotes are Buffett's unless otherwise noted. Words in [brackets] are my comments or edits." Fees turning us into the Luddites of bank machines 05/06/03   Permlink   Broken Link Banks "This nation of pacifist consumers is staging a quiet revolt against rising bank machine service fees. Not only are people complaining about having to pay these fees, they're making unprecedented cutbacks in their use of bank machines." WorldCom's bankrupt argument 05/05/03   Permlink   Broken Link Bonds "Moravus, 29, who bought 1,000 shares at face value after the WorldCom acquisition, noted that WorldCom repeatedly said that the MCI QUIPS had a prior claim on MCI assets relative to other WorldCom debt. Because much of what is valuable at WorldCom appears to be at MCI, that promise would seem to indicate that the MCI debtors would be relatively secure even in a bankruptcy reorganization. But that isn't how it worked out after WorldCom collapsed in a wave of accounting fraud." Putting the Pump in 'Pump and Dump' 05/05/03   Permlink   Broken Link Brokers "Here's a chart showing the 35 stocks that regulators allege were the subject of deceptive research, and the firms that peddled the research on those stocks to unsuspecting investors. Also included is an example of the kind of emails regulators used to build their case against each firm. These and other emails are expected to provide ammunition for disgruntled investors in arbitration claims and class-action lawsuits." Make the most of your income tax refund this year 05/05/03   Permlink   Broken Link Taxes "It's often been said that, next to being shot at and missed, there's nothing quite as satisfying as a tax refund. And we Canadians love our tax refunds. The average refund to date for the 2002 tax year is $1,102.69, according to the Canada Customs and Revenue Agency" Awaiting inflation 05/05/03   Permlink   Broken Link Bonds "These veterans know that the bond market's reputation for absolute safety is undeserved. After all, there are plenty of instances in history where bond investors were fleeced. Investors lent money to the US government to finance World War II at rates of 2.5% for terms of between ten and twenty years in length. By doing so, they committed themselves to a 2.5% return on their money on the eve of a massive period of inflation. Those investors who held these bonds for the duration suffered major losses as inflation ate away at their savings." Warren Buffett's profits soar 05/04/03   Permlink   Broken Link Buffett "Investment guru Warren Buffett has confirmed his legendary ability to back the right businesses by doubling his company's profits." Buffett says CEOs overpaid 05/04/03   Permlink   Broken Link Buffett "'It's always invigorating,' Mr. Eisner said. 'They make things sound very clear and very simple, which, of course, it is not.'" Humm, how much does Eisner make? Tear up the earnings rule book 05/04/03   Permlink   Broken Link Stocks "Forget apples to apples. Earnings reports now compare mangos to mandarins, making this quarter's numbers more confusing for investors than ever. Let's look at Nortel and Qualcomm to see why." Be aware of the role Of Wall Street's middleman 05/04/03   Permlink   Broken Link Brokers "There are no factories on Wall Street. But you will find a whole bunch of overeager middlemen." Doling out the perks with the block trades 05/03/03   Permlink   Broken Link Brokers "Chances are good that your mutual fund or pension fund manager pays at least twice the going rate to buy and sell stocks, and he has little or no incentive to negotiate a better deal." Painful side-effects 05/02/03   Permlink   Broken Link World "While the SARS outbreak seems to have peaked outside China, its economic effects continue to ripple across Asia and beyond." Cleanup costs can take the shine off oil trusts 05/01/03   Permlink   Broken Link Trusts "Income trust investors are a sensitive lot, objecting frequently and loudly to bad press about their investments. To escape their ire, let's preface this look at the oil trusts with the good." How to thrive when prices fall 05/01/03   Permlink   Broken Link Stocks "Deflation has hit certain industries hard. But some companies are turning falling prices into a chance at reinvention." Fraud quiz launched 04/30/03   Permlink   Broken Link Government "'Billions are lost to investment fraud every year,' Christine Bruenn, president of NASAA, added. 'From the Yukon Territory to Miami, con artists don't discriminate - they target men, women, the elderly and minorities. Investors need to be aware of the warning signs for fraud, where to turn for information and what protections they have.'" Over the coals 04/30/03   Permlink   Broken Link Trusts "Debt isn't an issue; Fording carries just enough to make its capital structure tax efficient. Yet it's dawned on the market that however cost-effective Elk Valley is at "moving dirt," to use a favorite industry phrase, it faces a heap of challenges, including fluctuating interest and exchange rates and--this is the big bugaboo--coal price pressures." eBay's scary stock-option specter 04/30/03   Permlink   Broken Link Stocks "First, consider the $127 million "error" in its earlier reports. Then consider what its earnings would be if it has to expense options." The $50 billion card game 04/29/03   Permlink   Broken Link Law "In a mammoth lawsuit, seven million stores accuse Visa and MasterCard of ripping them off with debit cards. Can they win?" Readers cheer honest advisor 04/29/03   Permlink   Broken Link Brokers "Last week's column on Stan, the advisor who quit a big bank in disgust, sparked dozens of queries from readers wanting to use his services or those of someone similar." Working retirement 04/29/03   Permlink   Broken Link Retirement "New research shows many of tomorrow's retirees will be returning to work." Strong selling point 04/27/03   Permlink   Broken Link Value Investing "A company's P/S ratio is simply its market value divided by total annual revenue. A company with a low P/S ratio is experiencing one of two types of selling: the good kind, when it moves more product to pump up the "S," or the other kind, when investors dump its stock, driving down the "P." Either way, if the ratio gets low enough the stock may be a bargain, or at least worth a look." Clampdown needed 04/27/03   Permlink   Broken Link Brokers "Oh poor investor, beware: If the taxman doesn't take your money and run, unscrupulous financial advisers will." The myths of tax preparation and planning 04/26/03   Permlink   Broken Link Taxes "Aggressive tax preparation is one way to save tax. But proper tax planning is a better idea. Let me dispel a few myths about tax preparation and planning." Whose money is it? 04/26/03   Permlink   Broken Link Retirement "With low interest rates and slumping equity markets taking their toll on corporate-sponsored retirement plans, pension surpluses have become a fragile thing." New poverty traps 04/25/03   Permlink   Broken Link Government "Millions of Canadians accept the homogenous advice of governments and the financial community and put billions into RRSPs. However, for many lower-income Canadians RRSPs are a terrible investment. They are victims of a fraud, however unintentional. Only when more Canadians are aware of the perverse treatment of lower-income citizens' savings will Ottawa be forced to develop measures that reward, rather than punish, their savings efforts." Advisor quits big bank in disgust 04/25/03   Permlink   Broken Link Brokers "But increasingly the firm is sending the message that making money for clients comes second to making money from clients..." Shortchanged 04/25/03   Permlink   Broken Link Stocks "The Baby Bells may have bilked consumers out of billions by inflating the cost of their networks. Regulators seem content to overlook the matter." Shoddy building in the housing boom? 04/24/03   Permlink   Broken Link Stocks "Millions of new homes have gone up over recent years -- and so have complaints and class actions charging defective workmanship." Canadian government debt stands at $2.5 trillion 04/24/03   Permlink   Broken Link Debt "Each Canadian Taxpayer is on the Hook for $172,416 According to Fraser Institute Study." RRSPs a bad option for low-income earners