Graeme’s

New on Money Terms

Posted by Graeme in Business & Investment at 10:55 am on Sunday, 30 September 2007

The latest additions to Money Terms are:

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A better PEG ratio

Posted by Graeme in Business & Investment at 3:18 pm on Tuesday, 18 September 2007

While making some improvements to the Moneyterms explanation of the PEG ratio, I started thinking about ways of addressing the weaknesses of this ratio. The main problem with it is its short term nature, which makes shares that have mere enjoyed spikes in their growth, look like bargains. (more…)

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Northern Rock should have been allowed to fail

Posted by Graeme in Business & Investment, Economics at 10:05 am on Friday, 14 September 2007

Willem Buiter is quite right to criticise the Bank of England’s bailout of Northern Rock. The message to bank directors and shareholders is quite clear: “take big risks, and if they go wrong the taxpayer will pay for your mistakes, if they work, you can keep the profit”. (more…)

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New Moneyterms site

Posted by Graeme in Business & Investment, Internet at 8:10 am on Thursday, 13 September 2007

I have moved Moneyterms to new hosting and to the wonderful Modx platform. The time spent developing the new site was minimal, but I also replaced all the automatically generated “related page” links with manually chosen lists, which was a lot of very tedious work. It should improve site navigation.

I also removed the “Guides” section, as it was simply not good enough. It will reappear with rewritten material.

Now that is behind me I have started adding new entries again, starting with style index, discount rate, long term PE, market neutral and synthetic security.

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Actively manage your pension

Posted by Graeme in Business & Investment at 7:47 am on Thursday, 13 September 2007

Most people are quite happy to allow a fund manager to look after their pension, even those who actively manage other investments. I suggest the opposite. There are very good reasons for concentrating on your pension. (more…)

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More bull market?

Posted by Graeme in Business & Investment at 8:48 am on Friday, 7 September 2007

FT Alphaville is skeptical of Morgan Stanley strategist Teun Draaisma’s bullish outlook. Looking at the arguments he makes in detail, I think he has a point, although I would be more worried about the downside. (more…)

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Wogen not irrationally priced

Posted by Graeme in Shares at 12:56 pm on Friday, 10 August 2007

Richard Beddard appears to be willing to agree with me that most active investors will under-perform. We still disagree about how investors’ chances of out-performing are. Richard has focused on a particular company , Wogen, as an example of irrational underpricing. Naturally, it is now essential that I poke a few holes in his bullish analysis. (more…)

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Lifecycle investing: when to switch?

Posted by Graeme in Business & Investment at 2:35 pm on Wednesday, 8 August 2007

The comments on a recent post questioned whether life cycle investing is a good idea. I think the idea is sound, but I think it is important to point out that thinking purely in terms of terminal wealth at retirement over-simplifies things. (more…)

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Choosing tracker funds

Posted by Graeme in Business & Investment at 9:43 am on Thursday, 2 August 2007

In a comment on my recent post on why investor’s should not try to out-perform, Robin Sole brought up the important issue of how to choose tracker funds, and the lack of a good totally passive approach to investment. (more…)

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What to avoid: Large cap growth

Posted by Graeme in Business & Investment at 10:27 am on Tuesday, 31 July 2007

Given the size effect and the value effect, it would appear that the worst investment style is large cap growth. I spent some time looking at returns on the French Fama research portfolios and both effects seem to hold, but with some interesting twists. (more…)

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