Indexing – The Media Catches up with 1932

If you read the financial media, you’ll bump into coverage of the benefits of index funds or passive funds.

They always make it sound like it is a major breakthrough.  ALERT: We have found some evidence that index funds do better than your expert investment manager.

In other words, the experts, to whom you might pay a lot of money to manage your assets, generally do worse than the simple averages.

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Fama and Shiller on Financial Bubbles

NPR interviewed Fama and Shiller on financial bubbles.

This is fairly well done and worth a listen. Generally the financial media completely screws up stories and interviews, but this one actually gets down to the real subject at hand.

You can listen by clicking here.

Notice that Shiller dances around when he is asked direct questions about how to define a bubble. He still can’t really do it.

My favorite quote from the interview ...

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Consolidation and Shrinking in Financial Markets

Here is an article about the “shrinking” equity market.

The only point Michael Santoli is missing is the underlying reason that all of this is happening.  There are a lot of explanations out there. “Corportations are awash in cash,” there is a “Buyback binge,” etc. etc. but these just tell what is happening. They don’t dig into why it is happening.

As I have written so many times before – there is ...

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Digital Gold is not Gold, By Definitioin

The Bitcoin phenomenon continues. Apparently Ron Paul has stated it could “destroy the dollar.” I don’t put too much credibility into media reported. You’d think a quote, by definition, is exactly what someone said. Not so with the media. They have an amazing ability to make up quotes.

Regardless of what Ron Paul said or did not say, there are other out there who definitely do believe Bitcoin will destroy ...

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Can’t Wait to See the Lawsuits with Bitcoin

When this Bitcoin thing finally comes down, there will be lawsuits all over the place.

I wonder if any of them will be criminal. Maybe. Maybe not.

If you can’t see why this thing isn’t going to work long term, I don’t know what to say to you at this point.

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Another Way Indexed Insurance Could Bomb

“Heads you win, tails you win” is one of the favorite sayings of the insurance salesman.

I’ve seen a lot of insurance products promoted this way, as is the case with indexed insurance, the popular product of today’s era. It is a complex insurance product, packaged in way that makes the policy owner believe they can’t lose. If the stock market goes up, they make money. If the stock market goes down, they stay even.

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Indexed Insurance – This Probably Won’t End Well

Indexed life insurance and annuities are hugely popular. I suspect they will sorely disappoint their policyholders over the long term.  The reason? Well, this is what always happens with these waves of popularity in life insurance.

Background

To understand why indexed insurance will likely be a lemon, you have to understand some history about other insurance products.

Variable Insurance (Late 1990s and Early 2000s)

During this era, variable insurance became popular. That is, insurance where your cash value can be invested ...

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Bitcoin Won’t Work. I’m Really Serious About This.

I’m going to publicly forecast that Bitcoin isn’t going to work.

Apparently the market price of a Bitcoin has reached the $600 mark. Is Bitcoin just like other money or commodities, or not?

There are two important factors 

1 ) Will a military accept Bitcoins as payment?

No. (Although if a military ever did, that might change things)

2) Does it have any useful physical properties?

No. It isn’t shiny, it isn’t pretty, it ...

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