essays pieces of the puzzle
Sunday, January 1st, 2012
for auld lang syne

For old time’s sake, here’s a digest-style pix, looking back at a few things from 2011:

In a May posting on Covestor, Mick Weinstein wrote on what he called the “Suze Orman retirement hedge fund.”  The posting demonstrates the collision of punditry, conflicts, fees, and packaged products that the average investor faces.

One hardly knows where to start, given the number of bad ideas wrapped in such a small package.  Any self-respecting personal finance guru could come up with something that replicates this mess at a fraction of the cost — and without tarnishing her name with a “good way to add ETFs to the model” that is created by the sponsor of her newsletter and is questionable in and of itself.

As for performance, the returns for 2011 of her recommended funds are shown above in the golden hue.  The basic building blocks of an old-fashioned balanced portfolio appear in the brighter colors.

For the sake of those that listen to Orman, I hope there isn’t a recession any time soon.  Given her recommendations, they would get absolutely crushed.  (Chart:  Bloomberg terminal.)

looking where others don’t

I loved a recent post by Eddy Elfenbein about his fondness for the stock market.  The bottom line:  If you look where others don’t, there are always opportunities.

the good old days

Another posting from the last two weeks should be read as well.  It’s by the irrepressible Josh Brown and concerns the intersection of the crazy market environment that we face and the investment blogosphere that spins out interesting content to make sense of it.

the oddest moment of 2011

As part of the Global Research Analyst Settlement, Henry Blodget paid a big fine and was banned from the securities industry.  My candidate for the oddest moment of the year:  Blodget ringing the bell at the New York Stock Exchange in October.  You see, the NYSE was a party to the settlement.  Quite ironic for the few left on the floor to witness it.  No reports as to what the machines in New Jersey thought.

questions to answer

Bob Veres wrote a number of great pieces for Financial Planning in the past year, none better than a column from June full of questions for the firms and people who get paid to deliver financial services to individuals.

a year’s worth of work

Consulting for investment firms pays the bills, but I try to write as much as I can.  During 2011, the electronic pile amounted to 155 postings here, 35 on the research puzzle, eleven newsletters, a couple thousand tweets, and a few things published on other sites.  Included were essays that ranged from assessing the degrees of difficulty in asset management, thinks to wonder about in China, how to tell stories when marketing investments, and reviews of good books on equity research and the role of investment trustees.  There were lots of cool charts, on famous portfolio managers, companies, asset classes, questionable investment productsscams, and more.

listen to ben

Resolution:  Resolve to perform what you ought; perform without fail what you resolve. — Benjamin Franklin.