Welcome to the end of the week and another edition of Happy Hour! Just sit back, relax, and enjoy your end of the week roundup of all things interesting in the land of money.
Lesterland
If you haven’t seen a TED talk video, it’s a platform for sharing ideas from the some of the great thought leaders around the world. Anyways, TED released a new video this week titled Lawrence Lessig: We the People, and the Republic we must reclaim on the corruption in our political system and funding process.
I highly recommend everyone watch the video regardless of your political leanings and views. And once we fix this, we can finally get to the problem of electing laughing stock politicians.
Monkey Investors
Monkeys are great investors. They can beat the pants off regular passive investors and all those other Plain Jane index investors. If only they could spice things up a bit?
Okay, so they aren’t real monkeys, just virtual ones. But a Cass Business School study put together a randomly selected group of 1,000 stocks, giving each one an equal weight, and compared it to the U.S market performance of the same time periods. And the monkeys won.
The results shouldn’t have been that surprising. I’ve covered the different index weighting methods and the faults of market cap weighted indexes. Yet, for some reason, people still flock to these sub par index funds. The important point in the research is the weighting method used. Once the researchers compared similar weighting methods – the monkeys versus an equal weighted market index, the monkeys fell short.
So the lesson of the day – to beat the S&P 500, just invest like monkeys.
Last Call
- A Man in the Mirror – are great investors just a product of their environment?
- Peter Lynch: Five Lessons from One of the Most Successful Mutual Fund Managers of All Time – the Cliff’s Notes version of a great Peter Lynch book.
- Understanding Capital Gains Tax Brackets – A good rundown how the changes in the capital gains tax work.
- The Bitcoin Bubble and the Future of Currency – everything you wanted to know about Bitcoin.
- Don’t Fear the Reaper – A great reminder on discipline (something great investors have) and sticking to it, with some economy stuff too.
