Super Stock Blog

Posts Tagged ‘mutual fund companies’

1. There are many areas in the securities industry other than a stockbroker.

   There are security analysts, accountants, lawyers, IT people, and traders that work for banks, brokerage firms, mutual fund companies; and private advisory firmsAlmost any type of professional person works in the industry,

   You don’t have to be good in higher math, just have an idea of the basics. you should have courses in finance, econmics, accounting, statistics, and you can major in any one of these to do well in the industry.

   So don’t worry lthere is no such thing as a degree in investing. investing is something that you learn using some of the other acquired skills.

   Here are some books you can start reading now,What Works on Wall Street by James O’Shaunessey, Beating the Street and one Up on Wall Street both by Peter LynchThe Warren Buffett Way by Robert HagstromTrading For A Living by Alexander ElderMastering the Trade” by John Caster; “How to Make Money in Stocks” by William O’NeilThe Disciplined Trader by mark Douglas

   Get into the habit of making daily visits to some websites like MSN Money and Yahoo Finance. while at MSN read the Commentaries by Jim Jubak, Jon Markman, Harry Domash, and Liz Pullman Weston. following the strategy lab analysts to get a feel for what the pro’s are doing and why. This site has some basic information for beginners. If any site offers free information, take it.

   Other website that can provide instructions and help with procedures and terminology are Investopedia.com, Stock Charts.com, investorshub.com; and 1source4stocks.comVisit some of the more professional websites like Zacks.com, Smart Money, Schaeffers.com, Trading Trend, Trading Markets, these website will have advertisers who are worth looking into also.

   There no reason for you to wait until you finish college, or high school, to start learning about investing.once you learn the rules of investing, it will be something that you will be able to use for the rest of your life.

   Do not ever let any one tell you not to invest or your too young, and never take advise from someone who is not investing.

   Good luck on your journey, I hope I was able to give you some direction in getting into what could be a very promising career.

2. that’s a risky area. Investment, however I can tell you that the best way to reach your goal is to go talk to your guidance councilor and ask him/her to help you find an answer. As for math, I do believe you need math. If you are doing investment, that will fall in the category of business. you will need to take calculus courses in Business and Data Management, so you do need math in high school. when you look through the university’s program booklet then you will see the prerequisite for that university.Advice: Only investing in Stocks in not enough for a career cause you can loose a lot, the best thing to do is invest in a lot of other area as well as stock. So for example Real estate and so on.This will bring you a lot of money!

3. There are many careers in the broad area known as finance beside being a stockbroker. while you do not have to major in math, it will help you in your finance career if you are proficient in math skills and comfortable with numbers in general. Nowadays, many of the computer programs run the financial formulas that are used to assist with analyzing companies and their financial statements, but it still would help to know how the formulas work.Some of the best investors in the world have degrees in other disciplines and they say that their education in these other areas help them see opportunities that other people (with finance backgrounds) miss or don’t appreciate.

4. It’s not a career

I am in high school and I am interested in the idea of investing in the stock market as a career well….?

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August 16, 2005 Unconventional Success: A Fundamental approach to Personal Investment

For the last 20 years, David Swensen has been the manager of Yale’s endowment. And the ol’ chappy has done the Eli proud. the Yalie fund has grown from a measly from $1.3 billion to a respectable UT-like $15 billion. Zounds and Huzzah for the money people!

Swensen then took pen to paper and was set to let all the wee widdle investors know how to invest just like Yale. but then, a funny thing happened on the way to Easy Street. the book’s thesis took a bit of a detour. I’ll let the Times take over (that’s The New York Times dear heart, not El Paso):instead, it shows why the little guy will never be able to invest the way Yale does.for all the “democratization” that has taken place in the world of personal investing the deck is still stacked against the individual. That was mr. Swensen’s fundamental discovery. And his willingness to change course and turn “Unconventional Success” into a polemic aimed primarily at mutual fund companies, but also at other Wall Street types who fleece the little guy, is to his everlasting credit. After all, he could have told us to buy stocks in companies whose products we buy at the supermarket, like a certain investment genius of a previous era. Any regrets about that advice, Peter Lynch?

Oh lord. Where to start? first, we take a shot at Peter Lynch! I’ve re-read this a few times, and it still comes out of nowhere. Why is Peter Lynch the bad guy? His style of investing hasn’t been shown up at all. in fact, it’s as relevant as ever.

Lynch’s main point over the years is to ignore professional investors. He even calls them an oxymoron. Lynch never said to buy stocks in companies whose products we buy at the supermarket. He says that “the amateur investor has numerous built-in advantages that, if exploited, should result in his or her outperforming the experts, and also the market in general.” He’s exactly right. but that’s only half of Lynch’s argument. He also takes down the pros.Lynch criticizes the group-think mentality of institutional investors who often have to clear their buys and sells past a committee. Lynch said that some of his best investments ideas have come from the power of common knowledge. That makes perfect sense, and I doubt mr. Lynch has any regrets.

Secondly, we learn that despite the democratization that’s taken place, “the deck is still stack against the little guy.” Democratization is even placed in scare quotes as if it’s been a scam from the get go. oh, please. Yes, Wall Street is being run by the evil plutocrats who are stomping on the throat of the little guy. Just the other day, I saw a phalanx of Morgan bankers marching down Broad Street, “Ooo – eeeee – hoo! Yooo – ho!” to be honest, they didn’t look that scary, but you get the idea.

Let’s be clear: the sole driver of Wall Street’s history for the last few decades has been the democratization of investing. This has been nothing short of a revolution. the changes have been stunning. Only 30 years ago there used to be fixed commission rates, no discount brokers, no decimal pricing, no IRAs, no 401k’s, no ETFs, no Reg FD, little of any disclose, no Sarbanes-Oxley. Ok, I could do without the last one, but at least they’re trying. in fact, one of the best books on the subject is “A Piece of the Action: How the Middle Class Joined the Money Class,” written by Joseph Nocera, the freakin’ author of this Times’ article (New York Times, not Northwest Indiana).

The article (Mr. Nocera) continues:when mr. Swensen first took over, Yale’s portfolio held stocks and bonds, period. Like most institutional portfolios of that time, “it was neither diversified nor particularly equity-oriented,” mr. Swensen recalled. Today, the endowment has barely 5 percent in bond holdings. “The other 95 percent,” he said, “are in places that we think will provide ‘equity like’ returns.” which is not to say it is all in equities. on the contrary, the Yale portfolio is extraordinarily diversified, which both lifts returns and protects against disaster.

No! No! A thousand times no! Diversification does not in and of itself increase your return. the whole idea of Modern Portfolio Theory is that you can use diversification to lower your risk (protect against disaster) without impacting your return. I’m not being pedantic here. This is the entire foundation of modern financial economics.

In just a few paragraphs, we’ve taken on a straw man and lost, and now we’ve bravely flattened the efficient frontier.

Let’s read on, shall we?At the end of the 2004 fiscal year, Yale had a mere 15 percent of its assets in domestic equities, and another 15 percent in foreign stocks. it had 15 percent in private equity, and 18 percent in “real assets,” which includes investments in timber and energy. but its biggest percentage, 26 percent, was in something called “absolute return.” That is a category invented by mr. Swensen in 1990. it means hedge funds.

This guy owns hedge funds and he’s complaining about how mutual funds fleece the little guy. Does he have any idea how much hedge funds charge? Also, is this guy a manager or does he just pick other managers?His new book has given mr. Swensen a greater appreciation of the enormous advantages he has as an institutional money manager, starting with the obvious fact that he has a staff that spends full-time researching investment possibilities. Thus, he takes it as a given that individuals shouldn’t pick stocks themselves. “I see every day how competitive the markets are, and how tough. so the idea that you can do this yourself, that’s out the window.”

He’s confusing cause and effect. the markets are competitive precisely because people are picking their own stocks. Yes, it’s hard to beat the market. Very hard. but if you’re well-diversified, it’s hard to lose to the market too. We never hear that part. for books like this, there are only victims. Wall Street is an unending drama of victims and exploitation, us against them. (Duck, I hear more guards coming!)

This is where the book drowns in its own conventionality. I’m sure the author believes he’s advocating self-denial and conservatism. Swensen indeed picks the right (and easiest) targets, but his entire view of the markets is wrong, wrong and wrong.

The financial markets are not a game of one side opposite another. That’s simply a metaphor that people use to understand how the market operates. It’s easy to understand. if you wanted to write a stock market book at any time for the last 70 years, just throw the words “big shot,” “fleeced,” “screwed,” and “little guy” in the title and off you go.

Just in the past few years, we’ve seen dozens of these types of books. the former head of the SEC even jumped in with “Take on the Street: what Wall Street and Corporate American Don’t want you to Know.” See. You’re the victim of “them.” Never of the SEC of course. Another one is “You got Screwed! Why Wall Street Tanked and How you can Prosper,” by someone calling himself James Cramer. I’m sure he means well.

This us-against-them view is just a metaphor and nothing else. Thanks to democratization, this metaphor is like some cartoon cat getting clanged on the head by the frying pan of reality. I guess that’s actually a simile, but you see where I’m going. I hate to break it to some people, but there’s no one “in charge” of the economy, or Wall Street. There’s no board room with a dozen fat bald white guys sitting around conspiring against you, and perhaps ruling the world during their breaks.

Financial markets are hugely decentralized structures with countless participants who aren’t coordinating with another, but they influence each other nonetheless. in fact, understanding this is one of the best arguments in favor of free enterprise. (James Surowiecki’s “The Wisdom of Crowds” is a good book on this subject.) Looking for Wall Street experts is like asking who’s the king of a traffic jam. it just doesn’t exist.what is it about mutual funds mr. Swensen finds offensive? Just about everything. He hates the way the loads and all the hidden fees mean that the investor is always behind the eight ball. (When I asked him about hedge fund fees, which are much higher, mr. Swensen replied: “I don’t mind paying a lot for actual performance. Besides, when we negotiate fees, it’s sophisticated investor versus fund manager. It’s a fair fight.”)

CrossingWallStreet.com: Unconventional Success: A Fundamental Approach to Personal Investment