Articles worth checking out

[CanadianCapitalist]

Fellow bloggers and I typically link to interesting articles we read during the week but sometimes there isn't enough time or space to link to all the articles we found interesting. In this thread, please post any article / column you find interesting in your web travels.

[CanadianCapitalist]

Tom Bradley in the G&M:

'It will sell': A tipoff for bad investment products

I liken structured products to Viagra. The industry is hooked on them because they stimulate sales. They're a specialty product that should be used by few, but are sold to many. And the buyers get instant gratification, but pay for it in the long run.

[The_Number]

I don't know what the board's policy on live links. So here it is:

http://www.rollingstone.com/politics/story/26793903/the_big_takeover/1

I don't necessarily agree with the article, but it's an interesting read nonetheless.

[MoneyEnergy]

Worst of Times Might Be the best of Times to Take Off - all about jobs that pay you to go on "sabbatical" - nice, makes me consider leaving academia...

[CanadianCapitalist]

Is Your Investing Personality in Your DNA?
by Jason Zweig in The Wall Street Journal.

The contrast between the raw material of my genes and the final output of my behavior isn't unusual. Perhaps 20% of the variation in risk-taking among individuals is genetically determined; the rest comes from our upbringing, experience, education and training. So, while my genes bias my brain toward spooking easily and trying to make a quick buck, that isn't how I actually behave. I hold investments for years, even decades; I don't panic in bear markets, and bull markets make me uncomfortable.

Those habits, I now understand for the first time, don't come naturally to me. I have been fighting my genes for years, and the reflective parts of my brain have been struggling to rein in my emotions for a lifetime.

[CanadianCapitalist]

Not sure I agree entirely that a new method of calculating S&P earnings is needed when the current method works just fine as long as you understand the limitations.

How Cheap Is the Market?

The true valuation of the market is no where near as dismal as the aggregate earnings reported by Standard & Poor's suggest. When portfolios of stocks are weighted by market values, the market is cheap by historical standards. No one can say for sure whether March 9 will mark the bottom of this dismal bear market (I personally think it will), but I am sure that investors who hold a diversified portfolio of stocks today will be rewarded by above-average returns.

[Rickson9]

Is Your Investing Personality in Your DNA?
by Jason Zweig in The Wall Street Journal.

Very interesting! I have often suspected as much!

When I speak about value investing I only get 2 reactions:
1. immediate understanding
2. are you speaking English?

I have never met somebody who was #2 who later 'learned' to become #1.

This is likely related to the saying that the very poor think day-to-day, the poor think week-to-week, the middle-class think month-to-month and the rich think year-to-year and the very rich think decade-to-decade

[CanadianCapitalist]

Hope, Greed and Fear: The Psychology behind the Financial Crisis

To explain the current economic crisis, the world of finance has a particular lexicon -- including, for example, credit default swaps, mark-to-market and securitized subprime mortgages. Psychologists, on the other hand, might use very different terms: hope, greed and fear.

The language of psychology helps to address the fact that behind every cut-and-dried statistic about falling home prices and other indicators of economic decline, lies an ever-shifting horde of homeowners, bankers, business owners, unwitting investors -- in short, people. And people often pay no heed to fine-tuned economic models by doing things that are not rational, are not in their best interest, and are justified not by numbers -- but by emotion.

[CanadianCapitalist]

There is a persistent myth that markets took 29 years to bounce back after the Great Depression. Mark Hulbert provides three reasons why in this article:

25 Years to Bounce Back? Try 4½

[CanadianCapitalist]

Pair of interesting columns in the Globe & Mail today:

Rob Carrcik - Say adios to money market funds

John Heinzl on the lessons from the Madoff scandal: Scam watch: If it seems too good ...