Archive for August, 2004

Passive investing

Monday, August 30th, 2004

Here’s an interesting article about the virtues of passive investing but also argues that a somewhat active approach is the best. The author concludes:

Active management of stock market investments certainly may reduce volatility of investment returns and I would not be in the business if I did not believe superior returns are also possible, but when you talk with any investment advisor make sure you are confident that his or her answer to the superiority of active management over passive management makes sense to you.

However, I think if you read the article you’ll see that the author’s “argument” for being a “diversified mutual fund investor” instead of investing in index funds is non existent. He says it’s better, but all the stats he presents seem to suggest otherwise. Here’s what I wrote before about index fund investing.

REITs vs. listed real estate companies

Monday, August 30th, 2004

Here’s an interesting article written for the Chinese and Hong Kong markets but largely apllicable to the US stock market about REITs and listed real estate companies. After reading about the differences in investing in each, I still think that the best plan is to put most money in index funds and supplement with REITs, metals, and a few speculative plays.

The online travel business

Tuesday, August 24th, 2004

Here’s an interesting interview with Dara Khosrowshahi, IAC/InterActiveCorp’s chief financial officer. IAC owns Expedia, Hotwire, Hotels.com, Ticketmaster, and HSN. Basically growth is slowing – the question for investors is how much. As usual, this one will be difficult to answer – maybe another reason to invest in index funds.

China telecom: room for growth

Tuesday, August 24th, 2004

OK, I’m back from Penang. It’s a little depressing to go back to reading about stocks (hanging out by the pool is much better) but here’s an interesting article about a China Telecom/Alcatel deal. As a CHA investor, I found this bit most interesting as it indicates that CHA has room for growth:

Once completed, the Alcatel equipment will enable China Telecom to offer users new multimedia applications such as video streaming, broadcast video, video on demand and online gaming, officials said.

Money mates

Wednesday, August 18th, 2004

I’m in a lighthearted mood, as my wife and I are in the airport waiting for a plane to Malaysia where we’ll celebrate our third anniversary. Anyway, I found this little article about how important it is for each person in a relationship to see eye to eye about money:

…it’s imperative to have true financial intimacy between the two of you, which means that you both truly understand each other’s motivations, fears, and goals when it comes to managing money. From that intimate understanding, you can build a financially compatible partnership. But if you go into a relationship without discussing these important issues – or currently find yourself in one full of money stress – I am here to warn you that someday, however much you love each other, the relationship may well end up emotionally bankrupt.

There’s also a quiz about your fiscal style. I doubt it’s better that the quizzes in Cosmo, but I guess it’s worth a try.

Google IPO

Sunday, August 15th, 2004

Here’s a Boston Globe article about how participating in the Google IPO auction wasn’t easy. The author ended up bidding 110/share which means he’ll only get shares if they end up selling for 110 or less. If they go for more, he won’t get any.

The International Herald Tribune notes that non-US residents won’t get any either. They go on to list some of the reasons people wouldn’t want shares in Google and try to make a few baseball analogies.

There’s also a distinct possibility that share prices will fall after the IPO be cause people may sense that there’s no demand at prices higher than the bid.

Marvel earnings

Sunday, August 1st, 2004

Marvel stock is still declining. When Marvel was going down while Spiderman 2 made millions, I wondered why. Now there’s no need to wonder why; earnings are down. Sales are strong but Marvel hasn’t been keeping costs down. Higher taxes (compared to last year) also hurt earnings.

Last time I wrote about Marvel, Motley Fool was bullish. They still like the cash flow but acknowledge that Marvel is going to have to pass a few tests to satisfy investors. This just goes to show you that stock pickers and “experts” don’t always pick so well. Kind of makes a case for index funds