Archive for July 2011
Financial Advisor or Stockbroker. A Brief History.
In a recent interview, I was asked whether the 30 basis points charged against Mac McAllister’s $18,900,000 account in Deadly Portfolio: A Killing in Hedge Funds was realistic. 30 basis points is three-tenths of a percent, or $56,700 each year for managing the account. An $18,900,000 account is not 18.9 times more work to manage…
Read MoreMiddle-class Income and Want to Beat Average Market Returns? Forget it!
Most middle-class families didn’t have much wealth to begin with — about $100,000. For the 22 million families right in the middle of the income distribution (those making between $39,000 and $62,000 before taxes), about 90% of their assets was in the house. Now half of their wealth is gone and it will never come…
Read MoreFather and Son
July 18 is my dad’s birthday. He was born in 1904 and died in 1980 just weeks before attaining age 76. The picture to the right is Dad with my two sons, Joe and Jim, on his lap. The picture was taken when Dad was in his late 50’s. In Deadly Portfolio: A Killing in…
Read MoreWorld War II Eventually Came to Chalkstone, South Dakota
World War II was real enough to people who lived on the east coast. They knew ships were being sunk every week by German submarines. The explosions on the stricken cargo vessels and tankers could often been seen from the shore. On the west coast, also, anxiety about the war was intense following Pearl Harbor.…
Read MoreBanks – appearances count. Honesty not so much.
Someone wrote that the public tended to trust bankers even when they didn’t think that bankers were very bright. I don’t agree. Mediocrity is the goal at banks. Appearances, however, are of overriding important. I was with a large bank in the Southeast for nearly ten years. A couple of stories make my point. The…
Read MoreSocial Security and What’s in the Boat
Matthew Wirth describes what the financial side of retirement is like in Deadly Portfolio: A Killing in Hedge Funds. Matthew tells his wife, “No more income . . . just social security for the rest of our lives. We need to live on what we’ve saved. Like pushing off from the dock. We’ll need to…
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