Below are some articles we've read over the past few days that you might find interesting:
Mutual fund investors' can't get it right
http://www.nytimes.com/2009/07/12/business/mutfund/12stra.html?_r=1&adxnnl=1&adxnnlx=1247487780-L6x/BnoonRlvWYfyCGgAsg
Excerpt:
LAST year, investors made a bad situation worse in the bear market by trying to time when to get into and out of stock mutual funds. As a group, they would have lost much less money had they simply held onto whatever funds they owned when the bear market began.
Is it time to buy junk bonds?
http://blogs.wsj.com/deals/2009/07/09/junk-bond-market-shows-signs-of-recovery/
Excerpt:
The high-yield sector has been looking up, up, up as upgrades increased, downgrades decreased and issuance continued to surge in the second quarter of this year.
Jean Marie Eveillard's View On The Economic Crisis (PDF)
http://www.firsteaglefunds.com/downloads/news/JMEatDD0609.pdf
Here is an excerpt:
Now, this financial crisis was, not to use Nassim Taleb's metaphor, not a black swan. Nassim Taleb wrote a book, the title of which is The Black Swan, by which he meant something that was unpredictable. Many hundreds of years ago in Europe people believed that there were only white swans because they had never seen a black swan until somebody went to Australia, came back to Europe and said, "Hey, I saw a black swan." In other words, Nassim Taleb is saying that the mere fact that Europeans had never seen a black swan did not mean necessarily that there was no such thing as a black swan. And yet, almost all professional investors did not see the crisis coming, even though as I said before, it was not an unpredictable event. Because they didn't see the crisis coming, they said, "Hey, nobody predicted it" or "The only ones who predicted it were people who for decades have been
Howard Marks - So Much That's False and Nutty [in finance] (PDF)
http://www.oaktreecapital.com/Memos/So%20Much%20Thats%20False%20&%20Nutty_07_08_09.pdf
Here is an excerpt:
There is so much that's false and nutty in modern investing practice and modern investment banking. If you just reduced the nonsense, that's a goal you should reasonably hope for. As we look back at the causes of the crisis approaching its second anniversary - and ahead to how investors might conduct themselves better in the future - Buffett's simple, homespun advice holds the key, as usual. I agree that investing practice went off the rails in several fundamental ways. Perhaps this memo can help get it back on.
