Venezuela Oil

After crossing into Venezuela from the Colombian border town of Cúcuta on our recent vacation, we proceeded to a lodge an hour away. The stream of evening car headlights coming toward us on the two-lane road numbered in the hundreds. Why so many on a Saturday night?

I soon discovered that much of the traffic consisted of gas smugglers. The subsidized price of gas in Venezuela works out to 4.3 cents per gallon at the official exchange rate, the lowest in the world.

You want to diversify. But how? Harry Markowitz won a Nobel Prize in economics for solving this problem. But when Markowitz made his own investments for his retirement, he did not use his Nobel Prize-winning method. Instead, he employed a simple rule of thumb called 1/N: Allocate your money equally to each of N funds.” – Risk Savvy: How to Make Good Decisions, Gerd Gigerenzer

 

99.93% of Active Stock Funds Underperform Over Five Years

CC By - SA Image: 090712_GWArsenal16_clover Courtesy of Flickr user miahalf

CC By – SA Image: 090712_GWArsenal16_clover Courtesy of Flickr user miahalf

Skilled fund managers should easily identify stocks as too cheap or expensive, or so you might think. They don’t, as the New York Times article entitled, “Who Routinely Trounces the Stock Market? Try 2 Out of 2,862 Funds,” points out. Is the failure rate for active stock funds really so high? If so, what are the implications for how you invest?

On the failure question, it depends on how you define failure.

Performance Envy Diminished by Better Benchmarks and Other Factors

Performance Envy Diminished by the Right Benchmark and Other Factors

Jason Zweig’s recent Wall Street Journal article “Give Yourself an Investing Makeover,” discussing the transformation of Guy Spier’s investing habits, piqued my interest. Along with money manager Mohnish Pabrai, Spier was the winning bidder of a charity auction lunch with Warren Buffett in 2008, and his Aquamarine fund has enjoyed superb performance.

Curious, I did a little digging.

Inappropriate Benchmarks Deceive

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