“the creation of the European Union, the European Central Bank and the euro were intended to prevent a repetition of the history of the Banca D’Italia funding the chronic deficits of the Republic of Italy with money creation and the endless depreciation of the Italian lire [sic]. Now the euro is in danger of resembling the Italian lire.”
Faxing still around ($JCOM is making sick money on e-Fax!!!)
Newspapers still around
Paper books are still obiquitous over here
Malls still around
These things remind you how profitable dying industries can be. A looong time ago I wrote a piece on Coca Cola's competitive advantage based on the idea Coke's advantage is its distribution network. No matter how tastes change, it will be able to buy into that and scale it up. But who knows maybe sugary drinks are still everywhere in 2027.
Exhibit 21 shows the dispersion between first and third quartile managers over the past five years for seven asset classes. The dispersion for emerging market debt funds is much larger than that for U.S. investment grade debt funds, and international small capitalization funds have greater dispersion than do U.S. large capitalization funds.
Where there's a larger dispersion, there are more opportunities for us (as active investors) to find abnormal returns. U.S. Real Estate Equity is one category that I did not expect to show such a large dispersion. Future cash flows don't seem to hard to figure out with tenants on lease...
Auch, some vicious critique of the Dutch startup darling Blendle on Bloomberg:
I am deeply skeptical of pay-per-story models, including that of the company touted as the first success of the approach, Dutch-based Blendle. The company, which counts The New York Times and Germany's Axel Springer among its shareholders, offers a curated newsfeed from professional media sources with the opportunity to pay for each story read -- and receive refunds if it disappoints. I tried out Blendle as soon as it entered the German market and didn't even spend the 2.50 euros ($2.65) I was given to start paying for content. My problem was first described by Clay Shirky, one of the internet's foremost public intellectuals, in 2003: The mental transaction cost of making a decision whether or not to pay every time I wanted to open a story. The refund opportunity only increased the number of decisions I needed to make. The process of accessing what I wanted to read ceased to be smooth. It didn't work, though Blendle probably counts me among its million users.
These are some good points too or I wouldn't have linked. Use Blendle? Thoughts?
MemyselfandI put up a very interesting post on his or her blog Value and Opportunity. It is about active management and why it is often a subpar experience. Many managers of actively managed funds have to seriously consider career risk and marketing viability when constructing their portfolio. Meanwhile, it is very rare for managers to get fired by delivering slight underperformance.
The irony is investor's won't tolerate it and therefore managers do the best they can while "ensuring" they will not underperform badly. After fees the long term result can't be good.
I don't think the managers are necessarily bad. Many have their hands forced by their investor base. It is not a coincidence many famous investors tried really hard to get a great investor base. Ideally, they just get permanent capital which solves the whole problem.
Perhaps we should ask ourselves whether active investing as we know it is truly active investing?