June 7, 2011 - Vol 5 Issue 23
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New Challenges for the Endowment Model
By Robert Huebscher
The multi-billion dollar endowments of elite institutions like Harvard, Yale, and Princeton are supposed to never be strapped for cash, but that's not how things played out during the financial crisis, when all those schools and many others were forced to raise liquidity under adverse market conditions. The endowment model, despite those failures, is still basically sound, according to Luis Viceira, but it needs several key improvements before institutions and individuals can rely on it.
Outsourcing Your Reporting Can Give You a Competitive Edge
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The Best Way to Start a Client Meeting
By Dan Richards
What does it take for a meeting with a key client to be successful? To answer that question, first you have to quantify how you measure success.
Webinar: Powerful Partnership Brings Firm More AUM
Sponsored Content by ByAllAccounts
This webinar will present findings from a recent Kenjol Capital Management case study focused on steps they took to increase AUM. We will review how Kenjol integrated their proprietary "Smart Zone Investing" strategy, leveraged a flat insurance fee VA for tax efficiency and utilized an innovative account aggregation solution to capture more investable assets.
How to Waste Time Effectively
By Wendy Cook
Ah, the Internet. Could there be a more usefully annoying, time-sucking, time-saver? It's always there, ready to transport us to that crucial bit of information we need - or to distract us far away from what we need to be doing. How do you harness the power of the Internet without letting it gallop off with your valuable time?
Why Jim Rogers is Bullish on Gold
By Dan Richards
The veteran investor Jim Rogers explains why he is bullish on gold and the US dollar, and offers his thoughts on Asian economies why he chose to move his family to Singapore. This is the transcript; a video is also available.
To watch the video, click below.
Improving on Buy and Hold: When is the Best time to Sell?
By George Vrba, P.E.
My model, Improving on Buy and Hold: Asset Allocation using Economic Indicators, has been updated. A Sell-A type signal will be generated by the model in the second week of August and I advise reducing one's stock market investments then.
Bathrooms, Speed Limits and Other Investment Artifacts
By Mariko Gordon
Whether speculating on details of a lost civilization or evaluating an investment opportunity, cultural artifacts shed light on the people and institutions they represent. Let's look at a recent on-site visit, and the impact that certain clues had on our perceptions of the company involved.
Letters to the Editor - Equity-Indexed Annuities
A number of readers responded to Robert Huebscher's article, Fantasy-world Returns for Equity Indexed Annuities, which appeared last week.
Letters to the Editor - On the WikiLeaks of the Economics Profession
This is a follow-up to last week's exchange between Guy Cumbie and Michael Edesess, which concerned Edesess' article two weeks ago, Letter to the Editor On the Wikileaks of the Economics Profession.
Letters to the Editor - Our Four-Year Anniversary
A reader responds to our article, Our Four-Year Anniversary, which appeared last week.
Highlights from Market Commentaries
Below are the three most widely read commentaries during the last week:
Buy Cheap Bonds with Safe Spread
If the government is going to artificially repress yield, then focus on the parts of a bond that are less repressed! Rather than outright default, many countries attempt rather successfully to keep nominal interest rates lower than would otherwise prevail. Over the long term, this "financial repression" results in a transfer of wealth from savers to borrowers. Investors shouldn't give their money away, and at the moment, the duration component of a bond portfolio comes close to doing just that - because it doesn't yield enough relative to inflation.
Tags: Investment-Grade Bonds US Monetary Policy
Buy Cheap Bonds with Safe Spread by Bill Gross of PIMCO
The Danger of Emerging Market Inflation
If left unchecked, high and accelerating inflation in emerging markets will have growing adverse economic, social and political effects. In addition to undermining overall growth and resource allocation, emerging market inflation imposes a very heavy burden on the poor and erodes political unity. Emerging economies will tap multiple policy brakes as they seek to counter mounting inflationary pressures. And they will continue to grow, but not enough to pull up decisively the sluggish advanced countries.
Tags: US Frontier Markets Inflation
The Danger of Emerging Market Inflation by Mohamed A. El-Erian of PIMCO
Crestmont Market Valuation Update
The recent series of articles by guest contributor Ed Easterling triggered a great deal of interest in the Crestmont P/E ratio. Accordingly I have added the Crestmont data to my monthly market valuation posts. The first chart is the Crestmont equivalent of the Cyclical P/E10 ratio chart I've been updating monthly for the past few years. The Crestmont P/E of 20.2 is 47% above its average of 13.7. This valuation level is almost identical what we saw in my latest S&P Composite regression to trend update and somewhat higher than the 40% above mean for the Cyclical P/E10.
Crestmont Market Valuation Update by Doug Short of Doug Short