It’s earnings season, and with Lehman, Goldman Sachs and Morgan Stanley kicking it off this week, many investors will be asking themselves: Is the financial crisis over? (Or, at least, is it winding down?) The smart money at the sovereign wealth funds (big investment funds controlled by foreign governments) sure thought they smelled the bottom some months ago when they injected some capital into a few of the ailing Wall Street banks.
Gold Diggers and Sugar Daddys joined forces Thursday at New York City’s Taj nightclub to raise money for charity—and make-out! Nothing says “selfless” like paying $5 to sell oneself at a weekday party that starts at 5:30 in the afternoon. Yes, the Fashion Meets Finance after-work mixer appears to have been successful.
So, the efficient market theory vanquished active management (okay, people still argue over this but given the amount of money flowing into passive indexes and ETFs . . . ). Now Warren Buffett says the S&P 500 can outperform a professionally picked hedge fund of funds. Back in May 2006, Buffett placed a $1 million wager putting his money where his trap is: Specifically, he says the Vanguard S&P 500 index fund can beat 10 hedge funds, net of fees, over 10 years, according to Fortune.
Investors may not be that impressed by Lehman CFO Erin Callan's forthrightness. The Wall Street Journal (among others) reported today that Lehman Brothers Holding is taking a $2.8 billion loss for the second quarter—a worse-than-expected report. (Its shares tumbled by 8 percent yesterday and, at one p.m. today, were down another 6 percent.)
According to analyst Richard Bove of Punk Ziegel (now a unit of Ladenburg Thalmann & Co.), Reuters reports, “Jamie Dimon did one for the United States. He's a patriot—but he didn't do one for JPMorgan.”
Jimmy Cayne was uncharacteristically penitent as he spoke before shareholders at a meeting Thursday to approve Bear Stearns’ sale to JPMorgan Chase, The New York Post reports today. But shareholders greeted his words of remorse with stony silence. Still, they approved the sale of the company to JPMorgan for $1.4 billion, with 84 percent voting in favor.
Exercising can be detrimental to your health—just ask Stuart Sugarman, fund manager and investment banker at Sunrise Financial Group. Last August, in spin class, Sugarman, 48, was quite vocal about the “burn.” One of his classmates, apparently, did not appreciate it. Christopher Carter, 44, a broker at Maxim Investments Group, "tilted the grunting hedge-fund manager's Schwinn exercise bike up off its front wheel and into a wall out of sheer frustration" after allegedly trying to get Stuart to pipe down by telling him to do so—which I'm guessing didn't work. Today, in Manhattan Criminal Court, the two will be in the same room once again—sans bikes. Oh, and by the way, Carter says Sugarman provoked him.
The Wall Street Journal published part one of Kate Kelly's three-part series, The Fall of Bear Stearns today, which details the events leading up to the bank’s eventual deal with JPMorgan Chase on March 17.
Why do we make decisions that aren’t always in our own best interest? This group of articles from the Investments & Wealth Monitor takes a fascinating look at behavioral finance and behavioral portfolio management....More
Though high yield is often considered one category, its two components—high yield bonds and leveraged loans—perform differently in rising rate environments. Bonds pay the same rate of interest regardless of the risk-free rate—a feature attractive in low or declining rate environments. Leveraged loans are generally safer investments that are more senior in the capital structure, have lower volatility and provide floating interest rate exposure...More
With the wind at their backs, sprinters have broken speed records. Similarly, the tailwind of a bull market has boosted the fortunes of equity investors over the past five years. In both cases, the pace cannot be sustained over a long period of time. Look back no further than the past 10 years for confirmation of the market’s lack of endurance....More
There are over a hundred behavioral biases that investors can be subject to, leading to poor investment decisions. To educate your clients and help counsel them to more appropriate investment decisions, you need an understanding of the market and how investor biases take root....More
With many client portfolios barely outperforming the market, and many investors still driven by fear-based thinking and irrationality, advisors need effective strategies for portfolio construction now more than ever....More
Technology is a critical differentiator in today's digital age for running an efficient and effective practice. Those entrepreneurial financial advisors and wealth managers who are leveraging technology in their firms are creating better client experiences, improving cash flow, generating new revenue streams, and scaling their services....More