What's in Your Portfolio
 

Unpopular realities were discussed in 2004: investments by Wall Street professionals underperform the market. Financial professionals tend to be inferior investors. While also reaping high profits. Since their purpose is profits; not the product - service of their customers. Anyone with years experience in mutual funds typically would have learned this the hard way. Better mutual funds tend to be index funds - where no professional makes decisions.

But it gets worse.

From CBS Marketwatch.com entitled 401(k) documentary ruffles feathers: When Frontline (PBS) does a report, informed citizens watch. Frontline, for example, in four reports repeatedly demonstrated the myths of Saddam's WMDs. If still investing in mutual funds (as if Wall Street professionals are best advise), then you still did not learn why mutual funds are typicallly a poor investments. View The Retirement Gamble here.

Anyone who invests should also know of better investment instruments that many Wall Street professionals fear you might learn. Michael Sapir, founder of ProShares and a champion of the ETF
Review investment advise in 2004 in Portfolio 101. Mutual funds were defined even then. Frontline adds more facts to the same conclusion.

Also demonstrated was what the informed and most easily brainwashed (depmats) do. Cheapshots.
Frontline is for adults. Review what was obvious 8 years ago in Portfolio 101.

If you did not do the math, then learn it from Frontline. Some finally did their homework. And were shocked. They also learned the hard way. What's in your portfolio?

I think younger workers are certainly going to have a more difficult time figuring out how to live in retirement than workers in my generation and our parent's generation had. Retired workers who are now in their 70's and above probably had it easier than many. They had the advantage of working and saving in those prosperous American decades right after the end of WWII.

It seems to me that retirement planning was worth doing up to around the time of Reagan. Every since the financial Bonzo tricks that were introduced back then, it's become ever more difficult to figure out sane financial plans for a life of full retirement at age 65.

As a boomer who entered the work force full time after I got my degree in 1980, I joined the rest of my generation with the country and the economy already under-going a retreat from the halcyon post war era.

These days we get to wonder if and how much of what the government promised us from all those nose to the wheel payroll taxes will ever actually materialize. The large boomer generation paid out a considerable sum in social security taxes that allowed the pols to play fast and loose with money that belonged to all of us taxpayers - NOT the rapacious members of Congress with their pet wars and pet military bases in the old home district and pet tax subsidies to their pet special interest groups.

We have been lied to by the government at every turn. No surprise there, but the lies have become more and more egregious, so that people in their early sixties and younger must worry that Medicare will be seriously tampered with - maybe even vanish. We have no idea what will become of Social Security, either. Halliburton may decide that baby needs a new pair of shoes and those of us who are in the unenviable position of depending on Social Security may end up living in chicken coops again. Worst of all, we might have to move in with one of our kids - probably the one who happens to have a fold down ironing board hanging over the kitchen door - almost as good as a Murphy bed!

Halliburton sold off its war services division in 2007 and is now just an oil services company. They are a generator of wealth now.

Cash.

If not averaging 8% annually on that money, then you are losing money.

:rotflol:

We certainly have had our differences, but I have to admit that you have the best sense of humor evah! Yeah, old Halli is generating dollars faster than the Treasury can print them out. You never saw a happier group of CEO's and major shareholders in your life - especially when you scan down the list of Halliburton's affiliate corporations.

Much of the gang these days is going into the fracking game full speed ahead. The fav techniques out West here is to construct endless roads back and forth across public lands for thousands of miles (that means the lands that belong to ME, Sam; and YOU, Undertoad, BTW). Once Halliburton and the rest of 'em has pumped ever last molecule of natural gas out from between the layers of shale, and caused the Colorado and Green Rivers (among others) to go dry since fracking requires mucho aqua, the energy guys will pack into their crew cab, hit the liquor store drive thru for some Coors and Glenlivit and are never seen in those parts again.

Whatever rural region in the West that has just been raped in this manner faces an expensive massive clean-up which will never really end. The dry soil around here has a tendency to turn into dust and blow away if you scrape it off the land's surface to put in an unpaved road. And there's that nagging little water problem. Have the aquifers now become depleted or contaminated with fracking chemicals? Can the rancher across the way get his water rights back?

Who knows? But the taxpayers are either going to have to fork out a bunch of cash in an attempt to mitigate the huge environmental damage that we all now get to deal with. Or, we could do what the now defunct US Uranium Mining Corporation did to the poor little Colorado mining town of Uravan, since the Corporation CEO's couldn't have cared less about either safety or the environment. It was much easier to just send the bull dozers in to flatten every building in sight and then pave the entire thing over with asphalt. They even made a deal with the CO Department of Highways to re-route Colorado 145, so that it no longer goes by what has become a huge and distasteful grave by the side of the old road.

The Uranium Company then declared bankruptcy which meant it never had to pay a penny for clean-up, and its various affiliates were gobbled up by affiliates from other energy and hard rock mining outfits and - POOF!

Yep, creates so much money that those offshore banks may have to start digging under the ocean to store it all.

******************

Me? I'd stick with gold if I could. Since gold is out of the question, given my slender resources, my portfolio consists of items that would fill a whacko survivalist type with joy - Coleman lanterns, tents, non perishable food items, maps, The Army Manual for Escape and Evasion, etc. Hey! At least collecting all this stuff keeps me off the streets.

Unless your miserable life last winter was heated by solar, wind, or lit unicorn farts, feel free to turn off the hyperbolic bullshit factory.

Fracking pisses me off. It's big (no, huge) business getting a pass on the regs that anyone else would have to observe, because it's Haliburton - creating their little shanty-towns in areas that aren't prepared for the traffic, road wear, noise, or sudden increase in school enrollment without any increase in tax base (the guys working the frack well sites stay on site usually, but their families come along and stay nearby - the kids are enrolled in school but families aren't paying school taxes, so resources get overstretched - until everyone leaves).

The wells and holding ponds are set up literally in long-term residents' backyards. The noise is enough to drive people crazy. PA has a regulation on noise now, but it isn't enforced. The local wells spew weird colors and odors out the kitchen faucets, and the aerated holding ponds waft volatile organic chemicals throughout the neighborhood.

No, thank you. We're following the environmental and medical impacts, but by the time enough long-term data have been collected, Haliburton will be long gone. And we don't need this gas right now; its price is in the pits, there's an oversupply. Half the wells are drilled and capped. For now, Haliburton is exempt from the Clean Water Act. They're wreaking destruction while the sun shines. Later they'll screw all of us with ridiculous gas prices plus hundreds of ruined sites that they'll never have to pay to clean up.

It's fine for them to destroy the local environment around the small country properties and hobby farms that people have saved all their lives for. These people now have green or black water coming out of the kitchen and shower faucets, and when they go outside to garden or walk, the air smells like a chem lab. Their property enjoyment and property values have been destroyed.

To not move south would be hypocrisy, because air conditioning is much less energy-intensive than heating.

My interesting life last winter was heated by a wood stove fed mostly with dead branches of Juniper (Cedar spp) and Pinyon. The drought and unsually warm summers have caused many of the lower limbs on trees around here to die. They either fall to the ground at some point or they can be easily snapped off from the trunk once you learn the trick of it. Doesn't hurt the trees and actually helps by removing potential fuel for next summer's forest fire season.

Wood burned from either species tree provides plenty of BTU's. A few sets of soft wool, genuine made in Switzerland long underware make my comfort complete. (It's good to maintain a connection to a group of people who have wintered over in high mountain regions for 1000's of years).

My Swiss Mom never let me set the thermostat above 55 in the winter, so I leaned how to be comfortable even in a rather chilly house - something Americans should start learning to do in case they get tired of those ever increasing heating bills and following around cleaning up messes after Halliburton which still refuses to be house broken.

Bullshit factory.

Government did not create mutual fund scams. However corrupt political rhetoric tried to move Social Security into mutual funds. Others were so easily manipulated as to advocate that near disaster (along with another myth about tax cuts making a more prosperous economy). Who proposed those myths? People who would later be called the Tea Party.

We discussed poor investments in 2004. Government was nowhere in that discussion. Professional financial people (ie stock brokers, mutual fund managers) - not government - were specifically cited as the problem. Frontline in The Retirement Gamble has simply confirmed what was posted eight years earlier.

In West TX, no townfolks bothered to ask if a school built near an Ammonia Nitrate storage facility was a good idea. Nobody in PA is asking why PA has so few environmental inspectors for fracking.

This is all completely different from what Frontline discussed.

One common factor. People who eventually got screwed did not do what is required. Learn facts with the always required reasons why.

Too many saw short term mutual fund profits only because some urban myth said it was true. Too many knew Social Security was better invested in the stock market. Too many foolishly believed tax cuts create prosperity even though history said otherwise. In every case, because short term advantages looked so good. In each case, nobody considered the long term.

In 2004, realities of mutual funds are contrary to widely held beliefs. Informed adults watch Frontline to avoid becoming a victim.

So who is guilty? The scam artist? Or those who all but begged to be scammed?

Even Alex Baldwin asked, "What's in your Portfolio?" It must be true. It's on the internet.

Leaping turquoise lizards! Give it a rest already. You know all sort of interesting things and you’re one bad ass bass player and no pawn shop customer in Philly or anywhere else would ever even dream of looking at you cross eyed.

I neither know nor care to know the places you’ve traveled, the things you saw there or the amazing local customs you got to observe first hand in these places – where ever they were.
However, if you’ve managed to make it to anywhere within a 500 mile radius of the Colorado Plateau and stayed for more than 24 hours; I’ll eat my cowgirl hat, my corgi, and my truck. And that’s just for starters.

Plenty of people – especially in rural areas - burn wood to stay warm and even to cook. Even people in rural PA apparently do this – believe it or not. When I was still married to my ex-husband, the boy who grew up in urban Arlington, VA only to run off to the American West to become a Colorado Mountain Man, he was a fanatic about heating anyplace we happened to be live in with wood – preferably using a good wood stove, but making do with a fire place when there was nothing else.

When we were in Idaho, it was mostly larch that was the fuel of choice. I hated that stuff - mainly because it was almost impossible for me to split, since, being a girl, I didn’t have old Jeremiah Johnson’s upper body strength. Plus the larch we had wasn’t really dry and took forever to get the house warm. I left for work in the morning still shivering, and I returned home at night to shiver some more.

I had grown up in suburbia myself, and the only thing I hadn’t liked about forced air gas heat was my Mom’s insistence on never letting the thermostat go up into a more balmy range of heat.

I didn’t know how good I’d had it as a child until I got married and “Deep River Ed” was off somewhere playing lumberjack with the Forest Service yet again. But I found out real fast. Those were the times when I had to go grab some wood from the dilapidated pile of larch on the front porch, try to split the stuff with a mallet and amass enough sticks of kindling and carefully crumpled sheets of newspaper arranged just so to encourage a small flame to finally lick up and turn into a fire.

I would sit on the couch and cry with homesickness for the Southwest and its wonderful stands of juniper and pinion that even a girl could split by just hitting a dead branch of juniper over her knee. Plus, juniper burns so hot, it wouldn’t surprise me if the devil uses it when he runs out of brimstone.

For anyone who actually gives a shit, here's a couple of random links from Google giving reviews on wood burning stoves and the fuels used and so forth. The first link is to an essay written by someone out of Cortez - quite the surprise since I hadn't even been aware this person existed. The Internet never ceases to amaze, I guess.

http://www.hcn.org/wotr/the-woodpile-and-me/print_view

http://www.trailspace.com/gear/vargo.../review/23573/

http://reviews.northerntool.com/0394...ws/reviews.htm

Now, are we clear?

You know what would make me look really stupid right now?

A picture of you sitting next to your wood stove that you use exclusively to heat your apartment.

I'm prepared to look stupid, so bring it. If I am wrong I will admit it. It's something I do regularly. It would really change my opinion of you. I would apologize for a long time. You can even fuzz out your face, or paint over it with MS Paint, but it will have to be in an apartment setting. And with "cellar.org 4/30/2013, fuck you undertoad" written on a piece of paper in the frame.

Pictures are worth a thousand words so you wouldn't even have to accompany it with a wall of text. Just the picture alone would be enough. And although you and I got nothing but time, this should take between 5 and 15 minutes to accomplish.

No. I'm not making more money. Big difference.

It depends on inflation, and your definition of "money".

No.

Were I to comply with your suggestion, I would be the one looking incredibly stupid, not you. As you may recall, this territory has already been covered when I was still foolish enough to play the game. I jumped through the hoops back then, but I guess not high enough because a few people STILL weren't satisfied. Were I to respond with "How high" to your command of "Jump!" I can already see the responses that would ensue:

Looks like a house to me. PROVE it's an apartment.

PROVE it's really YOUR apartment and not that of one of your brain dead friends.

Prove that funky thing you call a stove still works.

Please send a picture of your JUNIPER wood pile with you standing next to it holding up a sign reading "I am an IDIOT" and giving the date.

And many more variations along those lines, since we are an imaginitive and snarky crowd around here.

All of the above is moot anyway, since I don't really care what some stranger on the Internet thinks. Heck for all I know, "Undertoad" doesn't even exist. He's just Pensive Pam's sock puppet. In fact, I have an idea:

You go round up all the Philly members of the Cellar you can find and have them stand next to you holding up signs that give the date and have the words "I am (Cellar Username) and the man I'm pointing to really IS UT. You can stand in the center of the pic, holding up a sign with the words "I REALLY am Undertoad" with the date clearly written below that.

It's up to you, but I think it's more fun to just exchange snarky yet clever insults and comments. Hint: "Bullshit factory" is not especially clever, but I'll let it go this time.

Love,
Sam

Well if you did have one, in your apartment, which you don't, I'd advise you to get rid of it -- it's a huge indoor carbon monoxide generator, and a huge outdoor polluter of particulate carbon.

My grandparents lived in the white mountains of northern New Hampshire. My grandfather selectively harvested trees by hand on his private farm. He built huge woodpiles to get ready for the -20F winter nights. He generally had two cords of seasoned hardwood stacked up on the side of the house. But he still needed oil to get through most of the winter.

You're disabled sweetie. You get weak. You aren't out there hunting and gathering and seasoning juniper for the harsh Colorado winter.

If you don't want to bear the terrible questioning of the Cellar crowd: just stop lying. But if you don't, here's a hint: you don't need endless walls of weaselly text to defend the truth.

Brevity is the soul of wit:

My current apt: 600 sq ft (+ or - )
Grandma & Grandpa UT's home: sq ft not given

Max and Min temp averages for JAN - MARCH 1981- 2010 (Nat'l Climate Data):

Cortez, CO (High Desert, elev 6,168 ft)

DEC 42.5 F (Max), 17.5 F (min)
JAN 42.3 F (Max), 15.9 F (min)
FEB 45.9 F (Max), 21.2 F (min)

Town Unknown, NH (White Mountains, Ball Mtn Lake, elev 1,129 ft used as an aproximation)

DEC 34.0 F (Max), 15.0 F (min)
JAN 28.6 F (Max), 7.5 F (min)
FEB 32.6 F (Max), 10.4 F (min)

Note that Cortez has average winter temps roughly 10 degrees HIGHER than the White Mountains do.

The "Utah" juniper, one of the most common trees in the southwest, has the ability to self-prune. During droughts, these trees will cut off fluids from one or more branches so that the rest of the tree can survive.

The dead branches near the foot of the tree will often just break off. They are already dried when you harvest them.

Juniper ~ 24 BTU/cord. It burns at 60% to 90% efficiency depending on type of stove used. Wood smoke can try to pollute the air around here, but it doesn't stand a chance against the pollution from the coal burning 4-Corners Power Plant.

We're having one of the worst droughts ever here in SW CO. I can walk around just fine (unfortunately).

Despite this, my friend Carmen's husband has a little business on the side selling firewood. Now and then some accidently falls off his truck when he passes my place and no one is around. He's promised me that he'll try not to be so careless next time.

You can't turn the White Mountains into the Rockies, no matter how much you may long to make me appear "weaselly" by doing so.

Sweetie,

Here is the thread where your GAS furnace died, you got a NEW one, and your landlord provided you electric space heaters as a temporary alternative, which you used, although you found them to be expensive.

My definition of money is U.S. currency. That which can be used for food, weed, beer, gasoline, whores, vehicles, tools, and whatnot.

And, yes, those were listed in order of importance.

Still not losing money.

In number of dollars, or in how much they can be traded...Cash keeps its dollar value, but not necessarily its purchasing power.

Ah, Shugah,

That winter was a real bitch for us folks out here in western Colorado. I remember it well. You know what the real shit kicker was? A previous tenant had installed a nice little wood burner in the living room, and I wasn't allowed to use it. In all the years that stove had been there and folks had been burning juniper in it and staying toasty warm, Slumlord never bothered to have the chimney checked for creosote build-up or have it cleaned. The entire 4-plex probably would have burned down faster than you could say "hell fire" if I tried to light so much as a wooden match in that stove's fuel box.

That still hasn't removed money from my possession.

Why is this fact so goddamned hard for people to accept.

I got mine.

Barring a major fucktastrophe, I won't need anymore til I'm sixty-eight. I won't be buyin no Ferraris, mind you, not even a used Harley.

Why would I risk investment at all for money I will not need. In all likelihood, I won't live long enough to spend what I got.

And I don't really want to anyway.

I hadn't noticed that in the last, oh, say, 44 yrs of living.

Fuck this, I'm done.

I don't remember the exact words, but today there was the interview,
with the Director of the Funeral Home that was taking care of the body of the Boston Marathon bomber.
They were interviewing him because at least 3 cemeteries had supposedly refused to bury the body.

This man was of interest to me because his professional and personal ideals were
that he would serve everyone, regardless of their history or ability to pay.

He used an example of a woman who did not have enough $ to pay for her husband's funeral,
and he said he did the funeral just as he would if she had paid the full amount.

This is a long introduction, but it was his next comment that was of interest to me.
He said: "Money is only good for the good that you can do with it"

See Gravdigr... great minds do run along the same path. ;)

That may be the ideal profession to have such a stance on money.

Nobody can take advantage of your generosity until it's too late.

Farm land its better than owning others companies ..if there are live people they will always need to eat...

And the markups are so enormous you can afford to throw in a free ride now and again. There is no con as beautiful as the funeral con, put my carcass under a tree or cut it up for science.

A wise investment is in guns. You can realize substantial profit from them ... one way or another.

From The Economist of 25 Aug 2012: Earlier on 20 Apr 2011: A reason for the massive recession: banks and other financial institutions failed to do their jobs; to verify an applicant could afford the loan. This 'deregulation' (approved by 'political propaganda') created one massive recession. We don't need another created by irresponsible finance people.

Review what happened in 1929 to understand why farmland prices, like house prices, do not necessarily mean a good investment.

Despite what bean counter types say, a good investment must be based in the product. Not myths so often promoted on spread sheets created by finance people. Due to finance spin, land prices may be 30% too high; a crash can be expected.

don't worry about me TW I am good :)

Sure, that's because you live on it and off it.

The scumbags that were playing the wall street game, until it fell apart, were looking for a new game. Some of that money has moved into farm land speculation hoping to create another bubble for quick profit. As they drive the value up, the taxes also go up, making harder for small farmers/ranchers.

Some of them have moved into the commodities futures market, bidding up the prices, which increases the cost of food for us and our animals. They're outbidding the traditional players, like General Mills and Purina who were mostly the end users interested in keeping prices down.

Fortunately they can't move the land off shore... except what washes downstream into the ocean.:(

The reason food prices are so high is because of ethanol subsidies period. Once the powers to be get their head out of their alimentary canal and find another crop besides corn (saw grass etc.) for ethanol production. Food prices would moderate.

Obviously it depends on what products you are buying with the $20, but on average a product that cost $20 44 years ago would cost $470.25 today.

Google gives various particulars for 50 years ago.

Due to technology and economies of scale, there are some items that you could get a rough equivalent now for roughly the same dollar vaue; there are probably some canned meals that aren't much more than the 30 cent canned ravioli. Ramen, at least. And clothing can be very cheap these days (though you may also have to buy it more frequently). But unless you've whittled down your needs to just inflation-resistant items (and if so, more power to you), the calculations you've made about lasting 'til age 68 may need occasional adjustment.

A serious and yet unnoticed problem. Eliminate a product that has almost no purpose. And farmland prices take a tumble. We have created a large industry that increases GDP while doing almost nothing productive. The resulting cash flow typically enrich Wall Street types - resulting in a future economic downturn suffered by others.

Generally, products remains at similar prices when inflation is considered. For example, an upscale car in 1969 might be $4500. With inflation that is $30,000 today. A loaf of bread in 1950 was $0.14. Today it should cost $1.35. So why is bread 85% higher?

Because many store breads are "multi-grain" which, of course, would cost more than bleached white flour.
But then, I've long argued that "multi-grain" means it was the floor-sweepings of the night shift. :rolleyes:

The reason food prices are so high in Colorado (and other regions in the middle of the country) is because of the unrelenting drought we've being enduring for years now. The cost of hay is around $300/ton in some areas, and farmers just can't pay that kind of price to raise their cattle, so you see the cost of beef going higher than the cost of gold.

Out here, even the lowly pinto bean is in trouble. McPhee Reservoir (which supplies much of our irrigation water) is at a mere 19% of normal. As it now stands, the water will be gone about half way through the summer. Farmers will be able to grow only one crop of hay instead of the usual two. I don't know what will happen to the pintos. States that are downstream from Colorado like New Mexico with its dependence on the Rio Grande (which has its headwaters here) are threatening legal action if Colorado keeps too much water for itself.

Things are just not good for farmers and ranchers for more reason than one. :(

OK, here's your chance... come to Oregon and fish for your fortune.


KATU.com
5/7/13


There's a $1M fish just waiting to be caught

Attachment 43973

Hagg Lake is just outside of PDX, and will certainly have a LOT of people fishing this weekend.
South Twin is in central Oregon, and is a smaller lake with good bank-side fishing,
and boating is restricted to non-motorized craft.
If I were trying for this fish, I'd head to central Oregon.

Adding to the chorus who sing "investment professionals underperform the market" is word from Charlie Ellis. He is only repeating what Frontline made so glaringly obvious. Actively traded mutual funds are loser.

Ellis notes 60% of actively traded funds (where the stock broker is considered informed) unperform their ROI targets. Within 20 years, 70% underperform. And within 30 years, 80% underperform.

Charlie Ellis also notes the funds primary objective is to enrich the fund manager. The almost 1% fees mean you can surrender anywhere from 30% to 60% of your investment to that manager.

Ellis also echos what informed investors have known for quite some time. Exchange Traded Funds (sometimes called Spyders) have fees as low as 0.04%. If investing in index funds, then the ETFs are a best alternative.

However better returns are averaged by purchasing stocks directly. By ignoring investment advise from those who least understand the best investment - investment professionals. By learning what to invest in by learning the company's products.

From Ellis's book:

Thanks for beating this drum, tw.

I encourage anyone with a 401K or in other mutual funds to take the time to look at the fees for the funds you are in. They really are extreme in the managed funds. I also recommend the index based funds with the low fees.

I did this recently and ended up making a bunch of changes. I had been ignoring the funds for too long.

In today's news...


Cash ! That's $ in their banks ! Cash !

And here we are worrying about piddling $100k student loans
.
.

...and they say the Dow is a 6-month-out predictor of the US economy

LA Times
Andrew Tangel
November 18, 2013, 6:59 a.m.

Dow hits new milestone: 16,000

Good

The stock market works the same way as the Para mutual window at the track. A whole bunch of people guessing sets the odds/price, and like the Para mutual window, some walk away with money.

Don't all markets work that way? Everyone is just guessing about everything.

Yes, and everyone should keep that in mind unless they're insider trading.

Hmmm... irrational exuberance anyone?

Clearly not. We know stock brokers routinely under perform markets. Because they are betting on things that are irrelevant to what is relevant (ie economic activity and a productive economy). The stock market tends to reward those who better understand how markets and economies really work.

We've been through this before. If you want to underperform the market (also called lose money), then be a fool taking advise from a stock broker. Whose only interest is enriching himself while more likely providing bad advise.

These same facts were made woefully obvious in PBS Frontline's The Retirement Gamble. Like most every Fronline broadcast, it is a 'must watch'.

Stock markets serves other purposes. For example, it is a ballpark predictor of future economic conditions. Or in my case, a chance to enrich myself at the expense of stock brokers when I knew of Ford's tremendous increase in value in years before 2007 while stock broker types were foolishly pricing Ford at 5 times less money by doing spread sheet analysis. A chance for the common man to share in the wealth. Since best economies put more of the wealth into the hands of little people rather than the richest.

Markets are a number from which to make decisions when, otherwise, no facts and numbers exist. If working properly, markets also gives all a window or warning about economic activity. This massive recession was due (in part) to massive trading (ie CDO, SIVs, etc) in investments not traded on open markets. Finance people screwing the economy to enrich themselves while not making America stronger by trading under the table - not in open markets. Resulting in a financial shock to all others when it was discovered how much economic activity was being done (all but illegally) under the table. With contracts written to enrich themselves by harming counter-parties. All such investments should be in open markets so that everyone has numbers that (ballpark) describe the economy. And so that all parties to a contract prosper.

Betting on horses is similar. Except the winner of a horse race is not doing anything productive. Betting on horses is how the public predicts what a horse might do. No different than a board game or simulator. We learn by playing (and in theory having fun) at something that has no serious consequences. No different than board games like Monopoly or Risk.

Stock market is not gambling IF one learns what is relevant to stock prices in the long term. Words such as transparency, innovation and productivity apply.

Yeh, really. Did they say that 6 months before it crashed, Lamp?

I have no idea if "they said that" back then, but these two pics seem to say it did !

The DJ seems to have started down in '07/'08, and crashed in '08/'09
The US GDP didn't start down til late '08, and bottomed in mid '09

From here.

IRL, I don't follow either the DJ or the GDP

Warren Buffet confirmed that stock brokers (including active account managers) tend to be inferior investors. He left this recommendation for his wife. "My advice ... could not be more simple: put 10% of the cash in short term government bonds and 90% in a very low-cost S&P 500 index fund." Inventing using professional assistance has long been proven a bad investment. As PBS's Frontline so accurately demonstrates in The Retirement Gamble.

The Economist recently said same. "Each generation of investors were prepared to believe that the returns achieved by active fund managers were down to skill. Now it is clear that the skills were the result of factors that can be replicated." Those factors are found in index funds where no professional is making decisions.

In simple terms, Exchange Traded Funds or (ETFs) are superior to what any stock broker or financial expert will accomplish. The Economist says why professionals offer poor advice. "Historically, many earned commissions paid by the fund-management company whose products they sold and incorporated in the annual management charge. This system created a conflict of interest, the products that were best for advisers to sell were not necessarily the best products for clients to own. Low-cost trackers did not have the fees to reward advisers, so tended to not be recommended."

Warren Buffet's recommendations are based in similar reasoning. Of course, that should be obvious. "Since fund managers incur costs, the performance of the average fund manager is doomed to lag the index."

Peter Lynch of Fidelity (the best investor for 10 consecutive years) said same. Smarter investors learn about the product rather than spin from finance reports. He cited one example of how he made superior investments. He followed his wife and daughters into the mall. To identify products they preferred. Those were stocks that would increase in value years later. Why would anyone invest in an American shoe company? He watched what they selected. American Shoe was one of his most successful investments.

However, should one decide they are not product savvy, then 70% of the ETFs are provided by three companies: Blackrock, State Street, and Vanguard. Anyone paying 1% or 1.5% management fees wants to be financially raped. Fees should be as much as 0.2%.

Jack Bogle introduced the first index fund for retail investors in 1973. Wall Street professionals scoffed calling it a folly.

The informed investors is best advised to avoid Wall Street professionals who recommended Kodak because Kodak said they would be world leaders in paper printing - when paper was on the way out. Kodak even had no understanding of 3D printing - the future. Most Wall Street professionals knew nothing about its product; only studied the financials. Those professionals repeatedly were the source of folly.

The Economist note a problem with many if not most investors. "a belief that investors can do better than the index by picking a hot fund: money for old hope. ... It is easy to identify those funds with hindsight, but hard to do so in advance."

Only way to beat the market is it identify what makes profits years before profits are realized. That means studying products. And, of course, identifying top management that does not stifle innovation. Since 85% of problems are directly traceable to business school trained top management (ie every GM CEO since the 1960s). As Steve Balmer, a classic business school product, demonstrated by hobbling product development in Microsoft after Bill Gates left.

Smartest investors ignore bean counter types and identify innovators. Otherwise, the next best investment is an ETF. In every case, superior investing means cutting out people trained by business schools. Since bean counters (ie stock brokers) know the purpose of a company is profit - for them, not you.

Top performing stocks of 2013

RR Donnelley
Delta
Supervalu
Caesar's Entertainment
Icahn Enterprises
Micron Technology
Best Buy
Rite Aid
Freddie Mac
Fannie Mae

I don't think anyone could pick these by looking at retail performance in a mall. The secret to picking these stocks would have been to find shitty stocks in 2012 that were poised expected to turn around. (Wheeee JC PENNEY 2014!! But if you read that article, you'll read that Best Buy was a mirage...)

I'm not sure Lynch wasn't pulling a fast one on us with that strategy anyway. Most companies are not public-facing enough to know whether they are on the right track with respect to fashion.

Rite Aid has been one of the worst-run companies for a long time. Are they better now?

Rite Aid is an interesting company. Management in Harrisburg was operating major fraud over a decade ago. A resulting stock price dropped to $5 about a decade ago. The lady who took over instituted major reforms. Rite Aid purchased JC Penny's drug store company. Refurbished those stores. Then built many new buildings. In Central PA, the only new building in that town might be a Rite Aid. Within a year many stores were abandoned or replaced by another nearby building. Rite Aid stock dropped to well below $2. And has sat there for years. In 2008-9, stock price was so low at to risk delisting (below $1 per share).

I have not seen a new Rite Aid building or store closure for many years. As a result, Rite Aid has stopped losing $500m annually. Last year it actually showed a profit of about $100m. Rite Aid stock that spent a past 7 years at about $1 per share, has suddenly risen to $5. Far below a $60 it once sold for. Management stopping wasting money on boondoogles some years ago. Eventually profits resulted from changes. Suddenly increasing from $1 to $5 per share in one year. Stock prices changed long after management stopped building and abandoning buildings years ago. As usual, the finance reports what happened years ago.

I'll admit my purchase of Manchester United was a huge mistake. I should have known better than buy stock in a silly game that no one really watches

Expected when an American buys a team that does what he does not understand. When the purchase was only based in a foolish desire only to make profits.

Six premier league teans purchased by Americans becausehot dogs were not yet selling for $10+ and seats for over 50 quid. Their spread sheet analysis saw a future of obscene profits - football be damned.

I wonder if I could trade my Manchester United for partial ownership of the Clippers? Maybe, just maybe, it might be worth a hot dog and a beer.

Now that Malcolm Glazer is gone, there would be many takers for your stock. 85% of all problems can be eliminated by death.