Fiduciary Magazine

Archive for April, 2010

Paul Habibi is a real estate lecturer at the UCLA Anderson School of Management, has my vote for the most passionate and dedicated professor at the institution and someone that I’d like to consider a friend.

At the close of the previous quarter he published a letter to students sharing lessons from business and from life. Paul insights are should be taken into consideration not only by future graduates but much more seasoned professionals. 

My personal favorite is #4: ” Try not to put all your eggs in one basket, but if you do, make sure you do so knowing the risks, and walk slowly.  Remember that it’s harder to keep money than to make money, so once you get a nice nest egg, make sure you are vigilant towards preserving capital and reputation.  If you’re a high-flyer and just want to grow at all costs, admit that to yourself and then learn to have a tough stomach so you can weather the ups and downs.”

http://www.habibiassociates.com/2010/03/life-lessons-closing-escrow-on-another-quarter/

You can also follow his blog on real estate at http://www.habibiassociates.com/blog/

Georgetown University Professor Prem C. Jain has just published Buffett Beyond Value. Given recent talk of the value of Berkshire Hathaway (BRK.A) with or without Mr. Buffet, Jain’s release of Buffett Beyond Valueis a timely addition to the already crowded Buffett section at your local bookstore.

 Seeking Aplha’s Ravi Nagarajan provides a compelling review of Jain’s work and praises the author for “identifying the key drivers that are responsible for Mr. Buffett’s success.”  Buffett Beyond Value thus stands apart from its peers by focusing on Buffet’s investment principles and not the billionaire’s life which has already been covered generously by most other author’s who have written on the Buffet subject.

http://seekingalpha.com/article/196893-prem-c-jain-makes-significant-contribution-to-crowded-field-of-buffett-books?source=hp_wc

How public employees became members of the elite class in a declining California offers a cautionary tale to the rest of the country, where the same process is happening in slower motion. The story starts half a century ago, when California public workers won bargaining rights and quickly learned how to elect their own bosses—that is, sympathetic politicians who would grant them outsize pay and benefits in exchange for their support.

Over time, the unions have turned the state’s politics completely in their favor. The result: unaffordable benefits for civil servants; fiscal chaos in Sacramento and in cities and towns across the state; and angry taxpayers finally confronting the unionized masters of California’s unsustainable government.

From The Beholden State, by Steven Malanga

This is a great article from The New Yorker called Publish or Perish.

It discusses the e-book business and the iPad and Kindle, the latter of which I own. All of the books I review are sent to me for free and I usually give them away once I’m done with them.

Traditionally, publishers have sold books to stores, with the wholesale price for hardcovers set at fifty per cent of the cover price. Authors are paid royalties at a rate of about fifteen per cent of the cover price. On a twenty-six-dollar book, the publisher receives thirteen dollars, out of which it pays all the costs of making the book. The author gets $3.90 in royalties. Bookstores return about forty per cent of the hardcovers they buy; this accounts for $5.20 per book. Another $3 goes to overhead costs and the price of producing and shipping the book—leaving, in the best case, about a dollar of profit per book.

Why, Mossberg asked, should consumers “pay Apple $14.99 when they can buy the same book from Amazon for $9.99?”

“That won’t be the case,” Jobs said, seeming implacably confident.

Paulson made billions on the subprime fallout. I don’t think anyone would care about Paulson or his alleged prowess in subprime BEFORE the collapse. It’s only after the fact that anyone would care and that’s because he made $$$ on the trade.

The exchange is key in that the Securities and Exchange Commission is charging that the failure to disclose Paulson’s position was a “material” factor that could have caused both ACA and German Bank IKB to back out of the CDO investment. When the CDO failed, Paulson reaped a gain of more than $900 million, the government has said.

I don’t know why ACA or German Bank IKB would care what anyone would think about an investment they were considering…they were acting in their own best interests and they got it terribly wrong.

Plenty written and spoken about Goldman Sachs since the SEC has come forward with charges. Now, CNBC has learned that Paolo Pellegrini has insight that contradicts what the SEC has alleged.

Paolo Pellegrini told the government that he informed ACA Management that Paulson intended to bet against, or short, a portfolio of mortgages ACA was assembling.

CNBC has examined documents in which a government official asked Pellegrini whether he informed ACA CDO manager Laura Schwartz about Paulson’s position.

“Did you tell her that you were interested in taking a short position in Abacus?” a government official asked Pellegrini, referring to the name of the CDO portfolio.

“Yes, that was the purpose of the meeting,” Pellegrini responded.

Here is the full article at Yahoo! Finance.

Autoblog featured this very exclusive muscle car auction. If you were born more than 40 years ago you most likely will find a car at this auction that you used to dream about.

On June 19th RM Auction will be auctioning a private collection of over 80 American muscle cars and you’ll likely be able to be able find your new dream ride than for much less than prior to the economic crisis.

For more info on the auction, visit RM Auction’s website