[I'm off this week, enjoying the waning days of summer and catching up on a few things I promised to finish before September. In the meantime, please enjoy this example of that great American summer tradition, reruns. This post originally ran May 26, 2009.]
You may have heard of something called the Efficient Market Theory. If you did, it was almost certainly in a negative context, some writer or blogger excoriating those egghead finance professors for confusing the world with 
their crazy and dismal theories. This is a rant mostly heard from the advocates of investing in individual stocks, but is also found occasionally in the arguments of those in favor of active funds over passive (index) funds and market timing over passive asset allocation.
Apparently, this poisonous heresy has been spread by overly educated academics near and wide for decades. They convince their innocent students that it is categorically impossible to make money picking stocks, that anybody who does anything other than buy an index fund is a fool. It’s a viewpoint that is not just wrong, it’s dismally pessimistic and, let’s face it, simply un-American.
Read more »
[I'm off this week, enjoying the waning days of summer and catching up on a few things I promised to finish before September. In the meantime, please enjoy this example of that great American summer tradition, reruns. This post originally ran March 23, 2009.]
There was a time when owning the roof over your head was considered an attainable and wholesome mark of prosperity for American families. See, for example, the higher calling for which George Bailey gives up his youth in It’s a Wonderful Life. (In retrospect, George was making sub-prime loans from a dangerously over-leveraged and illiquid bank. It was a simpler time.) Over the decades conventional wisdom on home ownership morphed from 
wholesome goal to sound idea, then to great idea, and finally to such a great idea that it was practically free money.
Then it all went kablooey, and conventional wisdom started denying that it ever said any such thing. It’s really not clear what mainstream advice on home ownership is right now. Big time gurus like Suze Orman and David Bach (author of, among other bestselling titles, The Automatic Millionaire Homeowner) now spend time cautioning people about the dangerous waters of home buying and contradict, without apology or even acknowledgement, advice they gave a few years back to jump in with both feet. (See excellent article on this at the Wall Street Journal here, and my discussion of Orman’s latest book here.)
Read more »
[I'm off this week, enjoying the waning days of summer and catching up on a few things I promised to finish before September. In the meantime, please enjoy this example of that great American summer tradition, reruns. This post originally ran January 25, 2009.]
Sometimes we confuse the number of visible acts we make working at something with the progress we actually make towards our goal. Let me explain what I mean with a story about what our leaders in Washington have been up to.
Did you know that Congress voted to ban the familiar incandescent light bulb? More than a year ago? It’s true. Starting in 2012, no more 100 watt bulbs and by 2014 none of any wattage. Clever of them to pass something that doesn’t take effect for 5+ years. The small number of folks who really care are happy, and everybody else won’t even notice until after what must seem like an eternity to the guys inside the beltway.
Read more »
I’m going to take next week off. I will, in equal parts, be enjoying the end of summer and catching up on a few things I promised to get done by September. Next week will be "Best of Frank" reruns. I’m sure several of you haven’t yet worked through the entire back catalog of posts anyway.
In the meantime, I thought I would clear off some links and topics I’ve been meaning to get to, but am now willing to admit that I won’t.
A while back one of my best tipsters sent me a link to this really rather bizarre post on Mint.com’s blog written by Chris Larsen, CEO of Prosper, which claims to be "America’s largest peer-to-peer lending marketplace." It’s about his apocalyptic view of the near future in which the middle class disappears and we are left with a tiny elite of super rich and the poor, who will be employed primarily as members of the elite’s household entourage.
Read more »
I feel a little silly doing this, but it seems like I need to make that case that house prices are important.
You might recall that the Great Recession started with a fall in house prices. A mountain range of bad mortgages and the bonds that they were packaged 
into got most of the attention, but let’s remember that the whole sub-prime accident-waiting-to-happen wouldn’t have existed without a decade long run up in house prices. And if that run up had by some miracle continued, the accident would be still waiting. (And getting worse.)
But even if American house prices hadn’t recently been the rug that got pulled out from under the global economy, it’s a topic of huge importance in the world of personal finance. More than two thirds of American households own the place that they live in. For nearly all those households, the house is the largest single asset and one bought with mostly borrowed money.
Read more »
Uncategorized | Frank Curmudgeon | 
August 26, 2009 9:01 am | 
Comments (31) 
Subscribe