A study suggests that U.S. senators possess stock-picking skills that even the most seasoned money manager would envy. During the boom years of the 1990s, senators’ stock picks beat the market by 12 percentage points a year on average, according to the study. Corporate insiders, meanwhile, beat the market by about six percentage points a year, while U.S. households underperformed the market by 1.4 percentage points a year on average, according to separate studies. The final details of the study will be published in the December issue of the Journal of Financial and Quantitative Analysis.
The study’s authors, relying on financial-disclosure forms from 1993 to 1998, looked at about 6,000 common-stock transactions of about a third of the senators each year. The researchers then mimicked the senators’ transactions, buying the stocks the senators bought and selling the shares they sold. Over a six-year period, that “superportfolio” essentially beat the market by about one percentage point a month, or 12 percentage points a year.
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Looking at the timing of cumulative returns, the senators also appeared to know exactly when to buy or sell their holdings. Senators would buy stocks just before the shares suddenly would outperform the market by more than 25%. Conversely, senators would sell stocks that had been beating the market by about 25% for the past year just when the shares would fall back in line with the market’s performance.
Amar Bose Interview
Amar Bose, founder and chairman of the Bose Corporation, is interviewed by Brad Lemley in the October Discover Magazine:
?Research in this country is going down . . . The quickest way to save your bottom line is to cut research?
Verizon is starting to install fiber to the home
Still lagging Japan & Korea (price & performanc), Verizon is starting to offer fiber internet access to the home. Speeds range from 5MB to 30MB down and 2 to 5MB up (the difference makes no sense, it should be identical). Once again, Wisconsin lags significantly behind…
$3500 Designer Cats
Allerca lifestyle pets announces he world’s first hypoallergenic cats:
… we expect the birth of these first special kittens in early 2007.
The cat allergen is a potent protein secreted by the cat?s skin and salivary glands. Removal of the allergen will not harm the cats in any way. The resulting hypoallergenic cats will improve the health and quality of life for millions of cat-allergy sufferers.
Investing: A chat with Vanguard’s Gus Sauter
Q: What is your favorite part of the stock market today?
Sauter: I think you should have some international investments. I think we are going to see foreign economies start to pick up. International funds have risks that U.S. investments don’t have. I wouldn’t throw caution to the wind. I would use them as a diversifier. I would include emerging markets.
Q: If you could buy only one fund, what would it be?
Sauter: Vanguard Total Stock Market Index.
For first-time investors who want one complete investment, we’ve got our Balanced Index fund, which is 60 percent Total Stock Market Index and 40 percent Total Bond Market Index.
Japanese/American Hybrid Cars
Robert Collier continues his three part series, Energy and America’s Future; with an article on hybrid cars. He also discusses Detroit’s lagging position in this market (with implications for its manufacturing base).
Sinucleanse
Thinking about sinus relief?
I’ve been (happily) using Madison based Sinucleanse for several months. The process seems rather strange, at first, but the results have been excellent. I no longer take any prescription allergy medications! Check it out (they have a very nicely done video that explains the process).
Well worth checking out.
Natural Gas & Wyoming Drilling Boom
Excellent article by Robert Collier on Wyoming’s natural gas boom, and the inherent environmental tradeoffs.
The Milwaukee Job Scene
Milwaukee workers like Mr. Konieczny — with newfound opportunities and profound ambivalence about them — say a lot about the state of the economy and the presidential campaign. After considerable hesitation, the economy began to produce more jobs about a year ago, as President Bush points out at every opportunity. But many of those jobs don’t pay as much or offer as much security as the manufacturing jobs on which Milwaukee once depended, a point Democratic challenger John Kerry makes just as often.
The economy is behaving differently than in the past, and government snapshots give each candidate facts by the dozen to support his case. Mr. Bush likes a survey of households that shows more jobs now than the day he took office; Mr. Kerry likes a survey of employers that shows fewer. Mr. Bush says the new jobs are good ones; Mr. Kerry says they’re not. The murkiness of the statistics and politicians’ propensity to stretch the facts create a confusing picture as the election nears. But the outcome depends less on the dueling statistics than on what voters in battleground states experience and think about the economy.
Spectacular Arboretum Fall Color
We took a ride through the arboretum today. I managed to shoot a few rather nice photos of the beautiful fall color. Click on the photos and view a 1024 x 768 version. This size can be used for a desktop background image on many pc, linux and mac computers (save the large photo to your computer):
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Enjoy it now, before winter grey begins 🙁