The Trouble with Investment Ideas

Cliff Asness and economist Tyler Cowan discuss investment ideas, but also the problem people have with making investments. Just as I write in my new book, BETTER!, behavior beats all sensibility. To get to the better behavior we have to understand and run the professional relationship. As one local Newporter once said to me: “Gee. That’s sounds like a lot of work.” Why yes…

It is. And it is well worth it. We’re talking about our money and our purpose. So why skimp of money essentials?

Watch this for more.

WeWork – In case you thought nothing’s new in real estate

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Reagan and History vs “The New Kid”

Reagan and History vs “The New Kid”
The difference in an easily understood and entertaining way.

Reagan Vs. Obama – Social Economics 101

ConserVideo posted this clip WITH PERMISSION from the fim makers to help promote the informative documentary film titled “I WANT YOUR MONEY.” Buy the full documentary at If you like this short clip, you will love the full length documentary.

Lee Kuan Yew: Possibly the Most Thoughtful Foreign Affairs Expert Ever

Lee Kuan Yew was Prime Minister of Singapore for thirty years. Sadly he passed away earlier this year. Sad because we are living in a time where losing even one qualified and articulate voice on complex global issues is tragic for us all.

Happily, Harvard’s Kennedy School and the Belfer Studies Center for International Security thought to interview him, exhaustively it seems, to produce a fine and brief work on diplomatic art and current events. It is titled, elegantly, “Lee Kuan Kew: The GrandMaster’s Insights on China, the United States and the World.”

His candor is refreshing, if a bit gritty, for a Westerner such as myself steeped in American “rightness.” Here is a small taste of the gentleman’s ability to express meaning.

“The ideas of individual supremacy…when carried to excess, have not worked.  They have made it difficult to keep American society cohesive.  Asia can see it is not working.  Those who want a society where young girls and old ladies can walk in the streets at night, where the young are not preyed upon by drug peddlers, will not follow the American model…”

Anyone involved in currency, finance, trade, or manufacture should read it. IMHO, all Americans should read it. You can buy it below by clicking on the image.

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Human Trafficking and Capitalist Psychosis

Governments turn a blind eye, wealthy men and violent thugs participate in it, American’s go to girly bars, online porn is a magnet of the insecure and loveless. Generally, the poor or ignorant are the victims. Parents are not exempt from its opportunity. No matter what the language or culture, this sickness feeds on itself.  I feel certain you know someone involved in this, directly or indirectly, consciously or not. And why wouldn’t you?

A civilized society allows for personal freedoms–right? Here is the problem.

Your personal freedom does not give you license to trample anothers’ freedom because you have more money or power. The elimination of trafficking and all its inroads are a priority for a civil world. Several dozen global groups are active in its eradication. But the source of its strength must also be cut off: Demand and sex addiction. The site below is one of many; look them all over. Choose one and follow the results. Talk about this serious illness with friends and family.

A crime is a crime and political license to look the other way is wrong. Around the world eradication would provide a basis for fairness and opportunity. Displacing the threat of violence and violation with caring, education is a positive trade if it leads to just the chance of a good life. Economically eradication would crimp financial resources for groups like ISIS, violent Sudanese armies, turmoil throughout Asia and all other places where terrorism begins at home?

Does this make you uncomfortable? Just imagine what the victims’ days are like.

Get involved. And get others involved in this must stop campaign.

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John Bogle Stands Pat

John Bogle stands pat on Wall Street bet

MarketWatch photo illustration/Everett Collection, Bloomberg
Bet with the house and never look back.

The U.S. stock market rides on the productivity of American business, Bogle told CNBC. Corporations pay a dividend yield of about 2%, and long-term earnings growth is about 5%.

“Bet on the entire stock market and then get out of the casino and never show yourself there again.”

— John C. Bogle

Add those two numbers together and you get a solid, repeatable 7% return, so long as you don’t blow it by trying to reach for more, Bogle warned.

You can avoid the Wall Street casino simply by not attempting to beat the market by speculating in the short term. Just get in and stay in, Bogle told young investors, and it’s very hard to get it wrong.

“I would say, go into the casino, which is what Wall Street is today. Bet on the entire stock market and then get out of the casino and never show yourself there again,” Bogle said.

He then uses a metaphor that’s very near and dear to us in the portfolio indexing world, calling short-term, active trading strategies a “loser’s game.”

Read the Whole Article

One Step Ahead of Computers

Computers and robots are already replacing many workers. What can young people learn now that won’t be superseded within their lifetimes by these devices and that will secure them good jobs and solid income over the next 20, 30 or 50 years? In the universities, we are struggling to answer that question.

Most people complete the majority of their formal education by their early 20s and expect to draw on it for the better part of a century. But a computer can learn in seconds most of the factual information that people get in high school and college, and there will be a great many generations of new computers and robots, improving at an exponential rate, before one long human lifetime has passed.

continue Robert Schiller on Students’ Career Computer and Robotics Defenses 

It’s a fish eat fish world (after all)

I am preparing to read Mark Kurlansky’s “Cod.” OneScreen Shot 2014-10-13 at 11.48.09 AM
nearly done and one I’m skipping-to-return-to after Cod.

Kurlansky is a wonderful writer (“The Big Oyster” and “Non-Violence” are books of near-absolute perfection in description and revelation. I counted 25 altogether.)  I didn’t get beyond the first 6 pages when I saw this quote by my benchmark favorite historians, the Durants.

It applies, I believe, in new ways to “our new” global market.
Fish eat fish.


rb Note: And maybe not by due process of law, too. 

Kurlansky, Mark (1998-07-01). Cod: A Biography of the Fish that Changed the World . Penguin Group US. Kindle Edition.

PS In line with Dodd-Frank’s outcome (not intent) 4 top banks are acquiring small banks. “The whales are swallowing the minnows at a record pace,” says Fred Green, president of the SCBA… “Large banks in America will soon have a more commanding market share than ever before.” Dodd-Frankenstein IBD 10/16/14

Stop Marketing Nightmares

Screen Shot 2014-10-12 at 1.04.54 PMYesterday, a friend asked me the favor of helping develop a media plan for a new client. He knows that I am knowledgeable on this from time in a big agency in NYC (accounting side, drat!) and from a great deal of time spent  on my clients’ marketing in the financing process. My response could disappoint to him. What do you think?


Media plan… Um, a bit premature and you will see why below. I hope this is useful, despite my impudence. <grin>

Michael, the message and market will determine the media. The following questions will help with that first step.

  • Who’s the audience? What are they like?
  • What is the (sales) objective?
  • Will there be a (regional) test?
  • Where does the industry target “hang out”?
  • What are the top meetings in the industry?
  • What are the top-selling, or best reviewed products in the industry?
  • What (solution) is missing from the industry?
  • Why should buyers choose THIS product?

Based on the findings from these questions you create a media mix. You have a much better idea of which media, for example trade magazines vs. local radio or even Internet websites, works for this audience. Of course, if you’re going to go with a complete Internet presence, the answers above are still critical.

Lots of people are looking for one-size-fits-all solutions. And there are plenty of people out there providing them. Facebook will give you campaign for $1050 a month. How targeted it is, and how well it works and, importantly, how measurable it is… I have no idea.

There are media investments in print that are used to support advertising campaigns. Few people expect big results from these, with the possible exception of fashion and some other retail. But nobody’s buying a Gulfstream solely from ad in The Financial Times. Most sales occur after repeated exposures.

A serious campaign would test and refine its message before spending a lot of money. Additionally, they read the seasonality questions and “low hanging fruit” like conferences where the subject is already being discussed, and the solution is provided by this product.

In closing for now… My favorite product marketing campaign story is Red Bull. I understand the brand spent not a penny on print. By targeting its youth audience around sports and music promotions it became a multibillion-dollar product in just a few years.

Thinking out media in advance offers numerous advantages.


Objectivity and Confidence in Investing vs. TV Tips

Screen Shot 2014-09-12 at 11.43.50 AMWhy do I always have the sense that TV stock recommendations are loaded? And never in my favor.*

This might be some curse cast on me. But is it a coincidence that most TV stock “recommendations” come from people who sell advisory products? You might say I’m being too harsh, ‘these are professionals!’ (I say, “Yeah, well, how’s that going for you?”)

Heck, it’s my money. Don’t I have an obligation and commitment to protect it–myself?

Not losing any money is goal one. That’s what Warren Buffett says. Also Phil Town. Robert Kiyosaki and Donald Trump say the same thing. (You might not be a fan, but they support my big point.)

Shouldn’t we listen to people who make A LOT of money? Or should we dumb-out to  contract-players on TV?

Ok smarty pants Rob, you’re thinking. What makes you better? Smarter? More knowledgeable than the pros?

Well, let me share a few things. You decide.

My sources include: Motley Fool, Phil Town’s “Rule One” calculations, Investors Business Daily, calculations of underlying volatility, option price-stock correlation and time, and; a good RealTime charting system. Today, I’m very happy with Thinkorswim. I test these–daily and weekly–for their reliability. These are numbers, not opinions or as the trading industry likes to say, “views.”

I use my metrics in a unified process to check volatility (eg, highest in the short- and long-term) and medium-term/low beta stocks. There are other things, too. This gets you seeing. I use IBD’s SRM ranking. I check the options price/stock ratio. There’s a series of 10 year activity that gives me metrics on the future price. My strategy is to seek value + income which can be reinvested. If I see a company with lots of “green” lights, I may buy and trade its issues. PERIOD.

This is not the easiest way to invest. It takes time. I’ve invested (lots of) money in my own education. And what I have, now, is in way to stack the deck… in my favor. I set bold objectives. I put (professional?) pressure on myself for weekly results. While I cannot control the market any better than those people on TV, I know where I’m going. I guess the idea of having a strategy is important to me. I like putting the odds in my favor for a change.

And that is an outcome I have yet to hear offered on TV.

I want less noise; so I zoom in to a longer term chart, rather than cling to the one-minute chart. Again, strategy is important to me, so statements like “I am long/short… such and such” are meaningless to me. As is, “such and such looks strong/weak here, so…” Or this one:  “I am recommending to my clients that…” These are rarely strategies. These are tactics. Maybe. (Or darts.) And if you look at most of the underlying companies, their big stock moves have often already occurred.

Let me be clear. I am not a day trader. I run a company or two of my own. So this is not a career. I just hate indiscriminate and costly use of my money. So I avoid it like the plague.

Others agree with me. Bloomberg’s Barry Ritholtz is on my side. But then, he is one of those rare folks who explain why he feels the way he does, citing research to do so. A handful of others do this, too. Emerging markets leader, Mark Mobius. Motley Fool’s Tom Gardner. My friend Dodge Dorland–former President of the NYSSA (New York’s CFA Institute Chapter) and partner in Landor Capital Management.) They base decisions on research backed with objective decision-making. This breeds confidence in their own decisions. Not false certainty, or worse, hope.

Simply put, It is my profitable pleasure to be in the company of smart and wise individuals who know their minds. And keep their heads.

You might want to do this, too.

* This just occurred to me recently. CNBC was touting GT Advanced Tech (GTAT).  I was following  Invensense, Inc. (INVN). CNBC’s tip flopped. My homework will turn out ok. Their homework was, apparently, eaten by “the dog.”