Friday, October 7, 2011
Monday, October 3, 2011
Legislation is coming that will require a fiduciary model for all retirement assets
Thay means the best the Major institutions can do is to provide a commodity product...
Sunday, October 2, 2011
Modern Finance created both the Universal Banking nodel And commoditized investing using MPT
Both have been proven to be flawed and are now inefficient and outdated models.
Large Financial Institutions make a huge bet automating this Theory whichis now worthless.
Limited to variable annunities and Target account to Plug this need - WRONG AGAIN
Large Financial Institutions make a huge bet automating this Theory whichis now worthless.
Limited to variable annunities and Target account to Plug this need - WRONG AGAIN
Tuesday, September 27, 2011
This is A very different mind set and skill set ie Financial Times article on Admitting mistakes
AlphaMatrix Wealth Management is The combunation of Goal Based Planning with Modular Portfolio Construction and Management to provide a more robust and reliable process....
Move beyond the world of buy and hold commoditized Todays investors are looking for more - Modular portfolio Rap....
Move beyond the world of buy and hold commoditized Todays investors are looking for more - Modular portfolio Rap....
Sunday, June 26, 2011
Thursday, June 16, 2011
Monday, May 30, 2011
Investing is A Game.......
And it's Played From The Buy Side.........
That is Why the Business Has Been moving to a New Model.......
That is Why the Business Has Been moving to a New Model.......
Theory and Practice:
The Simple truth when you follow the Money
It that the Systme No longer Exists to Finance The Private Sector But To Milk It....
Nobody says it has to be Perfect but the Net Effect is so Far off the Charts that it has clearly morphed into Something Else...A Vacuum Cleaner.....And It's Stated Purpose no more than a front for this pathological Activity
A World Class Financial System this is What made this Country Great - Our Competitive Advantage - Our Leadership Position - This Is no longer The cace it has been lost we are now "average" no worse but no Better. This Competive Advantage has been lost......
It that the Systme No longer Exists to Finance The Private Sector But To Milk It....
Nobody says it has to be Perfect but the Net Effect is so Far off the Charts that it has clearly morphed into Something Else...A Vacuum Cleaner.....And It's Stated Purpose no more than a front for this pathological Activity
A World Class Financial System this is What made this Country Great - Our Competitive Advantage - Our Leadership Position - This Is no longer The cace it has been lost we are now "average" no worse but no Better. This Competive Advantage has been lost......
Friday, May 27, 2011
Investment Management is not the Domain of the Magic Kingdom........
Never has been.......Never will be........
Thursday, May 19, 2011
New Times Times 05/19/2011
Paris - The French finance minister, Christine Lagarde, was on a panel at the World Economic Forum in Davos this January when her usual smile turned into a frown. Next to her, Robert E> Diamond Jr., Chief executive of Barclays and one of the most powerful bankers in the World, Thanked regulators and finance ministers for their role in Shaping a better environment after the financial crisis.
Ms. Lagarde looked him in the eye, "The best way for the banking sector to say thank you would be to actually have, you know, good financing of the economy, sensible compensation systems in place and reinforcement of their capital, " she replied, to a burst of applause.
Therein lies the problem...That wish list is so far from their business model it sounds revolutionary...
Ms. Lagarde looked him in the eye, "The best way for the banking sector to say thank you would be to actually have, you know, good financing of the economy, sensible compensation systems in place and reinforcement of their capital, " she replied, to a burst of applause.
Therein lies the problem...That wish list is so far from their business model it sounds revolutionary...
Wednesday, May 18, 2011
Sunday, May 15, 2011
Thursday, May 5, 2011
Wall Street - The greatest sales and trading Machine the World has ever Known.....
Unfortunately Like Dorothy and Toto found out ....that's really all that going on There.....The rest is up to You...
Wednesday, May 4, 2011
Sunday, April 24, 2011
Saturday, April 23, 2011
Saturday, April 9, 2011
Do The Math......
The issue at the heart of all the explanations of boom-bust cycles is the unpredictability of the future. This is what makes finance different - and more unstable - than other economic activities. The primary purpose of any financial system is to link decisions made today with events many years or even decades ahead. Savers, investors, and businesses must resolve here and now how much to save or spend, whether to build new factories and which technologies to back, but all these decisions depend on views about the future - and those views, in most cases, can be based only on gut instincts, hope, and fears.
In non financial businesses, market prices may move more or less rationally in response to measurable changes in supply and demand, but in financial markets, prices respond mainly to subjective expectations about events in a distant future that is often unknowable, even in a probabilistic sense. Modern economists sometimes pretend to overcome this problem by assuming that financiers make decisions by calculating future probabilities in the same way that normal business, operating in the present, count current profits and losses. But substituting probability distributions for observable facts does not solve the problem of uncertainty. It merely covers up the true problem, like a con man playing the three-card trick. Calculating probabilities may work well enough in the insurance business or in everyday banking, but in many events, probability cannot be assessed. Recent events have offered Spectacular examples.
What was the probability that two planes would hit the New York twin towers within an hour? What was the probability that the Soviet Union would dissolve without a shot being fired? What was the probability that the US government would suddenly withdraw its backing for a systemically vital financial institution that everyone "knew" was "too important to fail"?
Business life consists largely of similarly incalculable, but more banal, questions about the future that simply cannot be answered, even in a probabilistic sense. What is the probability that someone in the next hundred years will invent a soft drink more popular than Coca-Cola? This probability must surely rate at almost 100 percent, yet that would also have been true in 1910. There is no rational way of making such an assessment.
It is unclear if Thomas J. Watson, the chairman of IBM in the early 1950's ever made his widely quoted remark that "there will be a worldwide market for maybe five computers." But what is certain is that even as late as 1980, no one would have put any significant probability on computer sales exceeding car sales by a factor of ten to one.
The role of inherent unpredictability in finance means that the most important prices set in financial markets - interest rates, exchange rates, stock market values, and property values - will almost never correctly reflect conditions in the economy of today and may not create the right investment and saving incentives to keep the economy in equilibrium. Most of the time, the errors tend to cancel each other out or correct themselves quickly through normal market competition. But every so often financial markets go haywire, succumbing to the alternating excesses of greed and fear that create boom-bust cycles. Does this mean that financial cycles are pathological and immoral? The alteration of greed and fear certainly causes losses and economic disruptions in the short term, as well as suffering among innocent bystanders who have no involvement in finance, but in a larger historical perspective, financial cycles can be seen to play a crucial part in the evolution of the capitalist system.
Greed and fear, after all, are not unnatural or dysfunctional conditions. Natural selection has hard-wired these emotions into the human brain for good reasons. The great insight of Adam Smith was that greed, euphemistically described as self-interest, is the creative force that constantly drives humanity to improve the material world. Greed is what gives impetus to the arrow of progress - and this is true not only of economics. In Chinese philosophy the creative principle of yang is associated with aggression and acquisition. In Politics, Machiavelli described the accumulation of worldly "glory" as the motivation principle that drives leaders to undertake "great enterprises" and do "great things" on behalf of their fellow citizens and not just themselves. But greed, whether for material possessions or for political glory, must be kept in check. Hence, the evolutionary value of fear. Fear also known as prudence, caution, or the Chinese yin, is just as important as ambition and greed for human success.
This is why the ring of repetitive financial cycles is needed as a countervailing mechanism to control the arrow of progress. In fact, the interplay between the arrow and the ring may be necessary for the capitalist system to evolve and improve itself, just as the balance between the greed for profits and the fear of bankruptcy is needed for business and industries to adapt and improve.
In non financial businesses, market prices may move more or less rationally in response to measurable changes in supply and demand, but in financial markets, prices respond mainly to subjective expectations about events in a distant future that is often unknowable, even in a probabilistic sense. Modern economists sometimes pretend to overcome this problem by assuming that financiers make decisions by calculating future probabilities in the same way that normal business, operating in the present, count current profits and losses. But substituting probability distributions for observable facts does not solve the problem of uncertainty. It merely covers up the true problem, like a con man playing the three-card trick. Calculating probabilities may work well enough in the insurance business or in everyday banking, but in many events, probability cannot be assessed. Recent events have offered Spectacular examples.
What was the probability that two planes would hit the New York twin towers within an hour? What was the probability that the Soviet Union would dissolve without a shot being fired? What was the probability that the US government would suddenly withdraw its backing for a systemically vital financial institution that everyone "knew" was "too important to fail"?
Business life consists largely of similarly incalculable, but more banal, questions about the future that simply cannot be answered, even in a probabilistic sense. What is the probability that someone in the next hundred years will invent a soft drink more popular than Coca-Cola? This probability must surely rate at almost 100 percent, yet that would also have been true in 1910. There is no rational way of making such an assessment.
It is unclear if Thomas J. Watson, the chairman of IBM in the early 1950's ever made his widely quoted remark that "there will be a worldwide market for maybe five computers." But what is certain is that even as late as 1980, no one would have put any significant probability on computer sales exceeding car sales by a factor of ten to one.
The role of inherent unpredictability in finance means that the most important prices set in financial markets - interest rates, exchange rates, stock market values, and property values - will almost never correctly reflect conditions in the economy of today and may not create the right investment and saving incentives to keep the economy in equilibrium. Most of the time, the errors tend to cancel each other out or correct themselves quickly through normal market competition. But every so often financial markets go haywire, succumbing to the alternating excesses of greed and fear that create boom-bust cycles. Does this mean that financial cycles are pathological and immoral? The alteration of greed and fear certainly causes losses and economic disruptions in the short term, as well as suffering among innocent bystanders who have no involvement in finance, but in a larger historical perspective, financial cycles can be seen to play a crucial part in the evolution of the capitalist system.
Greed and fear, after all, are not unnatural or dysfunctional conditions. Natural selection has hard-wired these emotions into the human brain for good reasons. The great insight of Adam Smith was that greed, euphemistically described as self-interest, is the creative force that constantly drives humanity to improve the material world. Greed is what gives impetus to the arrow of progress - and this is true not only of economics. In Chinese philosophy the creative principle of yang is associated with aggression and acquisition. In Politics, Machiavelli described the accumulation of worldly "glory" as the motivation principle that drives leaders to undertake "great enterprises" and do "great things" on behalf of their fellow citizens and not just themselves. But greed, whether for material possessions or for political glory, must be kept in check. Hence, the evolutionary value of fear. Fear also known as prudence, caution, or the Chinese yin, is just as important as ambition and greed for human success.
This is why the ring of repetitive financial cycles is needed as a countervailing mechanism to control the arrow of progress. In fact, the interplay between the arrow and the ring may be necessary for the capitalist system to evolve and improve itself, just as the balance between the greed for profits and the fear of bankruptcy is needed for business and industries to adapt and improve.
Sunday, April 3, 2011
Once You Have Moved Beyond GTD Products and Fixed Maturity/ Income Investing - You have Entered a New Realm
Anything beyond Guaranteed Returns and Principal is the Domain of Another Realm.
Banking 2.0 - Evolving from a commodity based Mentality
When a commodity based mentality is transferred to more complex products and services, bureaucrats can wind up creating more costs than they save.
Saturday, April 2, 2011
Friday, April 1, 2011
The MARKET is BETA - Excess Returns are Alpha....
Why pay Alpha Management fees for Beta Management... Money has been Flushed Confusing One with the Other
Once we go Alpha the Relationship Changes.......You and We are now part of the performance/result
Your Role in the Process is defined....
Once we go Alpha the Relationship Changes.......You and We are now part of the performance/result
Your Role in the Process is defined....
Tuesday, March 29, 2011
Sunday, March 27, 2011
The Need for a strategy you can understand and manage....
Whether it is Passive, Active or a Combination of Both...and your Planner can Adjust and Tweek....
Friday, March 25, 2011
A least 50% of the Financial World is set up and run by Non-Financial People for non- Financial People
On MAIN Street this is referred to as the Blind leading the Blind.
Here are a couple examples......
Here are a couple examples......
Investment Management is Like Cardiology.....
Fit Between the Pacemaker, Valve , Stent - Salesman/Company and the Patient/Client
Financial World is More like The Medical World / Sports World
and has many comparisons - Muggers know this - Your Life or Your Money
Monday, February 14, 2011
Sunday, February 13, 2011
Investing Requires A different wat of Thinking And Decision Making
BARRY Ritholtz Says it well in This Column:
Thursday, February 10, 2011
"I'm shocked, shocked to find that gambling is going on here".
Yes Virginia, Poker is being Played, Strategy is part of the game.
The Game is played From The Buy Side - the Hunter vs the Hunted
If you're are not playing the game from the buy side you are being played from the sell side - It's that simple.
Friday, February 4, 2011
Thursday, February 3, 2011
The Retail Distribution Model is Decades behind the times - That is an established fact
This is an Evolutionry Phase you need to get up to speed Fast if you are going to participate
We separated these two Models for A Purpose - they are separate and distinctive worlds
Bot independent and dependent upon each other Like Men & Women.
Wall street - A colossal failure in serving this need
the front end is driven by the back end - instead of the back end being driven by the front end
It's too late you have the wrong personal
It's too late you have the wrong personal
Wednesday, February 2, 2011
Current models don't model the real world
Both in economics and finance
They model and "explain" historical DATA like a back fitting trading Strategy and create a false sense of confidence - they are not useless but they do not predict the future.
They model and "explain" historical DATA like a back fitting trading Strategy and create a false sense of confidence - they are not useless but they do not predict the future.
Sunday, January 30, 2011
Saturday, January 29, 2011
Friday, January 28, 2011
The Problem with the current retail model is that the invesment process is usually 10-20 years behind the curve.
and like other systems often is focused on yesterdays' battle
Think David swensen
think Hedge funds - academic view vs real world value proposition
think ETF's
Think David swensen
think Hedge funds - academic view vs real world value proposition
think ETF's
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