Good reads from around the Web.
I know my co-blogger The Accumulator has a cult following among Monevator readers, but I never expected to see a financial product bearing his own name.
Of course I can’t be sure the money-amassing Accumulator
You’ve got to admit though that this fancy tube for collecting £1 coins does fit his mantra – it’s simple, cheap to run, and it can be operated by any DIY investor who has a pulse and the ability to save the odd £1 coin when holidaying in Bognor.
But I’m not going to take this lunge for fame lying down, rest assured. If The Accumulator can have a low-tech saving vehicle, then I think it’s time I finally launched my eagerly-awaited hedge fund.
The Investor’s Massively Asymmetrical Risk-Arbitrage Diversified Holdings Unit will invest in literally millions of distinct assets, each with their own bespoke characteristics.
And I can guarantee that there will be at least some people who are made into millionaires by the operation of my new hedge fund. (These people will be shown off at fancy City gatherings in order to convince more lucky punters to get into this great opportunity).
Of course, I shall be taking the customary 2% off investors for getting out of bed.
I shall also be gobbling up the quaintly traditional 20% of any profit made by my investors.
And how will it work? Oh, you don’t need to worry about that. It’s a black box, isn’t it? Trust me, I’m a soon-to-be rich hedge fund manager!
Okay, as you’re a loyal Monevator reader, here’s the skinny: Every week I will round up my investors’ money into a specially selected asset class that I have selected for return characteristics that are completely uncorrelated to the stock market.
In short, I will spend everyone’s money on lottery tickets – after my 2% take, of course.
It can’t lose!
(Well, I can’t lose.)
From the blogs
Making good use of the things that we find…
Passive investing
- Correlation and asset allocation – Rick Ferri
- Should I have more than one asset allocation? – Oblivious Investor
Active investing
- The five best shares from 1994 – The Munro Fund
- The confusion between volatility and risk – Money & Markets
- Beware of a good story – The Big Picture
- Acquisition archives: Winners & Losers – Musings on Markets
Other articles
- Stop acting like a victim – Retirement Investing Today
- J is for Judgmental Heuristics – Objective Wealth
- Relativity and anchoring – Gannon & Hoang on Investing
Product of the week: The Fixed Income Investor website likes the look of the Alpha Plus 5.75% retail bond.
Mainstream media money
Note: Some links are to Google search results – these enable you to click through to read the piece without you being a paid subscriber of the site
Passive investing
Active investing
- …is his value investing style dead? – The Daily Beast
- Maybe not: The (old) new Warren Buffetts – Fortune
- What’s gold’s role? – Morningstar
- Why a high dividend strategy is dangerous – CBS
- Danger lurks inside the bond boom – Wall Street Journal
Other stuff worth reading
- What has gone wrong with hedge funds? – CBS
- ISA limits raised, AIM-shares may become eligible – Money Observer
- Jim Slater: It wasn’t just about the money [Google result] – FT
- UK Autumn statement: Income tax changes – The Guardian
- Peer-to-peer lenders like Zopa to be regulated – Telegraph
- Why all-cash portfolios can be risky, too – CNN
- Peston: The tax choices faced by companies – BBC
- The big long: Bets on US property recovery – The Economist
Book of the week: I have no opinion on The Aftershock Investor: A Crash Course in Staying Afloat in a Sinking Economy
Enjoy these links? Subscribe to get them every week!
Slight typo in the FT link: you have “slates” rather than “Slater”. I won’t draw attention to the spurious apostrophe in “saving’s” though.
It sounds fabulous – can I invest using my SIPP and thereby claim 40% tax relief on the initial investment?
I think the product’s name could deter too many people in the “target consumer segment”: a bank would market it as The Investor’s Massively Diversified Scheme, or “TIMiDS”.
🙂
Your hedge run reminds me of the roulette ETF spoof from a couple of years back.
Both are a great lesson in why not all uncorrelated assets help to increase returns while reducing risk.
Maybe the argument in the blog about the five best shares from 1994 is a bit too subtle. The point is that if these five totally unconnected shares were the best investments 16 years what hope is there for active management?
The blog really makes the point that holding all shares is the only way of ensuring you get the good ones.
Should the link be included in blogs about passive investing rather than active investing?
@Rob — Yes, I did realise what your point was. 🙂 I enjoyed the post, but I didn’t think it really added much from a passive perspective to be honest, as you didn’t really dissect why it was so difficult to pick these five shares (or why you’d started in 1994, for that matter). Don’t get me wrong, I appreciate it *was* hugely difficult! On balance it was in active or nothing. You never know, you might get a couple of active investing converts who usually ignore the passive links! 🙂
@Gadgetmind — Great idea, the roulette wheel ETF. I think I’ll run the two strategies as a pair for further investor diversification 😉
@Tony — Good work on TIMiDs!
@Simon — Calling out typos always welcome. This Saturday post is done through bleary eyes and to a deadline (due to email sending window) so some invariably get through. (Fixed savings but I can’t see your “slates” though?)
TI, all links much appreciated, so thanks for that.
The start date was simply the furthest back we could go on the database available to us.
To be honest we were surprised at the results. But, for example, data for BATS was all rebased in 1998 when it executed a major restructuring.
What it does do is shed some light on the old argument amount where returns come from: capital or dividends.
The Accumulator is going high fee in his products – a 10% slice of the action is even more than your hedgie! You’ll need to run it more than ten times to get to his desired TER of about .5% 😉
The only Amazon reviewer appeared highly dischuffed last Boxing Day, clearly the turkey didn’t agree with his sense of humour….