Fiduciary Magazine

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In a country where the harsh Baijiu spirit is often the alcohol of choice, Shanghai had been a dismal place for wine lovers. Five years ago, only a handful of top restaurants even offered wine lists with imported vintages.

But, as in the rest of China, things are changing fast and wine bars have cropped up all over Shanghai in recent years. These new venues have attracted the city’s large foreign population and introduced wine to status-conscious locals with money to spend.

On CNBC’s talent, which he hasn’t hired away for his fledgling FOX Business Network, Murdoch pulls no punches, saying, “We don’t think they’re all that good.” Best way to increase your profitability in your trading is to turn off the TV…unless you are looking for financial infotainment.

We’ve got it bad in Los Angeles, but the US is 12th on the list. Italy is the worst, but then again, it is estimated that up to 40% of the “business” is done in cash.

Feds bust five local scammers in Van Nuys.

They’ve been offering consumers help in repairing bad credit, landing new jobs, starting lucrative work-at-home businesses and obtaining government money to pay off bills. These scams — which are surging along with the jobless rate — are touted on websites and infomercials, and have bilked consumers out of hundreds of millions of dollars, said David C. Vladeck, director of the Federal Trade Commission’s Bureau of Consumer Protection.

Schiller and Akerlof did a good job providing a historical context for scams during the Depression.

Consumer Reports has a good article here, with a 4:30 embedded video with the “pro” versus “con.”

If you are trading stocks from your pda, you might be an addict.

If you have your money with someone who is the investment advisor (unregistered to boot!), the custodian, and the broker / dealer at the same time, YOU are to blame for getting scammed. Blaming the SEC feels good – and there’s no doubt there’s holes there – but in the end we are responsible for our money.

I was at a presentation where one large allocator, Robert Schulman from Tremont, called Madoff “god.” Madoff’s investors were proud people and they bragged about “being with Bernie.”

Blaming other forfeits your power. Financial literacy is about managing risk, not being able to quote Suze Orman.

By Andre Peschong

Looking at the fallout on Wall Street, there has been great change in the financial industry and, in turn, some unintended consequences. The hedge funds that once numbered over 7,000 (my unofficial estimate as I couldn’t find a substantiated number) are now pared down to around 3,000. Venture Capital has retreated to higher ground by doing larger deals and more 2nd, 3rd and 4th rounds into existing portfolio companies. Private equity houses have largely been untouched, but they are suffering from the lack of exits. Three of the largest investment banking firms have gone under or been absorbed by larger traditional banks.

What are the unintended consequences of this current market upheaval for the financial sector? The most glaring one follows the first law of thermodynamics (and I paraphrase) which portends that nothing is ever created or destroyed but merely shifts forms. The shift I am alluding to is the movement of talent and deals at these former large tier investment banking firms to new firms, or to more aggressive mid tier boutique investment banks or specialty M&A houses.

This shift takes time, which is probably a contributing reason for the lack of IPO’s, PIPE transactions or any other type of liquidity events for the private equity/VC market.

Need proof? According to Price Waterhouse Coopers (PWC) the VC activity for the first quarter is down to levels not seen since 1997. VC and private equity funds have to consider the types of deals and companies they are willing to invest in based primarily on the extended holding time. The only current exit for a privately backed company is through an M&A transaction and those deals will be done at increasingly smaller multiples as this is a buyers’ market. The events of the past 12 months have really made professional investors and funds alike re-examine their investment model, pricing and exit strategies. The unintended consequence of these events are a boon to M&A boutiques that concentrate on buyside representation or that have top tier clients looking for bolt on acquisitions.

The market needs time to readjust to the new landscape in the capital markets. Deals will be under much heavier scrutiny from all sides, the accountants, VC’s, private equity groups, valuation firms, investment banks etc. This shift in due diligence on transactions will be significant. There will be a natural growth of service providers bringing additional transparency to the “deal” business. A true and needed unintended consequence.

Morningstar ran a report about how you can get Buffett-like returns by blending two funds…hmmm?

Buffett has been the luckiest investor the world has ever known. You cannot invest like Buffett. He gets calls, dealflow, that you’ll never get. He gets terms that you’ll never be offered. He’s also 78 and has invested through the largest and longest bull market the world has know.

What you see here, is an issue of Causation: Buffett is the richest man, therefore he has made nothing but prescient decisions during his life. This is of course a logical fallacy. I felt so strongly about this, and feel that the investing public is misled about how to trade and make money from investing, that I recorded a web tv episode on Buffett.

If you want to get returns like Buffett, buy the Berkshire Class A’s or B’s. That’s the ONLY way you’ll get Buffett-like returns – because he’s the only one getting them.