Day: January 4, 2008

Categories
Fun Master Series

Why not Berkshire for stock investments

Reading Time: 2 minutes

Last Updated on January 4, 2008 by stlplace

I know no broker offer this as an option in IRA. But how about buying Berkshire (BRK.A, BRK.B) over mutual funds in a taxable brokerage account? Not only does Berkshire has a track record which beats almost all mutual fund (21.4% annual compound return in last 42 years) and the 10.4% annual return of S&P 500. See this Buffett’s 2006 letter for details. But also an investor get the service of the best investor with virtually no fees: Buffett is paid a salary of 100,000. So why don’t we all give the money to Buffett, rather than mess up with our own investments, which in most cases can not beat Buffett’s performance in long term.

I can think of the following reasons:

1) We think it’s harder and harder for Buffett to repeat the performance he had in last 42 years. It’s practical because as much as Buffett is getting better (he is a life long learner), his portfolio is growing so big that expecting an annual return of 20% is impossible.

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Categories
CFA

Go for CFA level I test

Reading Time: < 1 minute

Last Updated on January 5, 2008 by stlplace

I decided to go for the June 2008 CFA level one test, due to several reasons:

1) Learning: I am interested in learning more about finance, since it is not practical for me to enroll a formal academic program, nor do I have the discipline stick to my own study plan. Enrolling in CFA exam and learn from the program itself is better suited for me.

2) Basics: I do have some previous training on economics and accounting, no formal courses on finance (financial management) though. I did took other fundamentals such as statistics in college.

3) Recognition (and potential benifits): I believe CFA will bring some credential for a guy like me if he/she wants to be a fund manager, or managing an investments partnership.

In today’s world, people simply won’t hand money to a person without formal finance education and/or investing experience. Although personally I still believe successful track record in investing matters more (vs. education), when I look at fund managers for my 401k 🙂

schweser CFA study guide

(picture above: Schweser CFA study guide, from schweser.com)

Categories
Fun Stocks

Top 25 stocks in past 25 years

Reading Time: 2 minutes

Last Updated on January 4, 2008 by stlplace

I came across this list of top 25 stocks in last 25 years from AOL money and finance. The original article was appeared on USAToday Sept 15, 2007.

Note statistically, a sample of 25 is too small to draw any scientific conclusion. But I found a few things to be interesting nonetheless.

1) Two money managment firms in top 5: they are Franklin Resource (up 65 times, ticker BEN), which manages the well known Franklin Templeton funds; Eaton Vance (up 38 folds, ticker EV), which manages the less known Eaton Vance funds.

Let me quote the article “As the old saying goes, the way to make money during a gold rush is to be the one selling shovels“.

2) Hardware and software: Cisco (up33 folds), Microsoft (up 29 times), Oracle (up 28 folds), and Adobe (up 20 folds). May I add Google here? It’s up around 800% from offering price of $85 to around $700 during from Aug 2004 to Sept 2007 (roughly 3 years).

3) Which stock surprise you most?

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