Monday, April 26, 2010

What is better - buying apple stock, or apple products?

A fairly meaningless graphic, but mildly amusing anyway.

My favorite entry in the table....
Apple iPod (Original/Scroll) 5 GB, 10 GB 2001-10-23 $399 $11,914

Instead of buying that new ipod in 2001, you could be sitting on nearly 12K today.


More on credit rating agencies

A great post buy Steve Allen on the ratings agencies.

Wednesday, April 21, 2010

Gold in a portfolio

A common question I get asked is "shouldn't investors buy gold because it is a hedge against inflation". Fama and French provide an excellent answer to this question. Bottom line is, if you are not wearing it then you won't get a fair return.

Semi variance

Fama & French discuss the use of semi variance as a measure of risk.

Friday, March 19, 2010

William Sharpe's IPO

William Sharpe's company "Financial Engines" has gone public. You'll recall that Bill Sharpe is the Nobel prize winning economist who developed the CAPM. Financial Engines is a company that provides asset allocation advice using portfolio optimization tools.

The basic concept of the company is really great. They apply hard core portfolio tools to optimize retirement portfolios of individuals. As they say on their website...
There's no such thing as a one-size-fits-all investment strategy. That's why Financial Engines gives you a personalized Retirement Plan designed to fit your situation. We analyze expense ratios, sales loads, asset turnovers, transaction costs, and management styles. To manage risk, we emphasize diversification—a technique that spreads risk over different investment types. We balance all these factors to create a personal investment strategy designed to maximize expected returns at a risk level appropriate for you.


From an academic point of view, it's always great to see what we teach in class being used in the real world.

What's going on with inflation?

I recently posted an article on the Poole College Thought Leadership page titled: " What's going on with inflation?" .  This w...