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Category Archives: How Wall Street Makes Money


Why You Should Fire Your Investment Adviser Today

Burton Malkiel’s famous tome, “The Random Walk Guide to Investing,” begins with the right exhortation for most investors: Fire your investment adviser today. Although it takes moxy to say “no” to that special someone who has earned your trust, the facts reveal that your investments will do far better with your wealth manager’s hands no [...]

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Our Conspiracy Theory

Have you ever met the crazy conspiracy theorist who is convinced that a well-executed and malevolent plot lurks behind most events? These were the people whose eyes bugged-out during Y2K, who are convinced that Apollo 11 never landed on the moon, that the World Trade Center was actually blown up by the United States to [...]

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Tsunamis, Nukes, and Uprisings: Why Smart Investors Don’t Predict

This year has been full of the unexpected. The world is an unpredictable place. It was just a few weeks ago that Egypt and then Libya dominated the airwaves. Now they are distant memories with the horrific events in Japan this week. Who would have thought that an earthquake would lead to a nuclear meltdown? [...]

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5 Ways to Keep Your Investment Adviser Honest

Not everyone is a do-it-yourself investor. According to Forrester Research, 30 percent of all investors want to delegate their investment decisions to someone else. Unfortunately, most “delegators” will spend more time shopping for a car than they will calculating the true cost of the investment advice they use to protect the nest egg they spend [...]

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What A Fool Believes

In their 1978 album, Minute By Minute, the Doobie Brothers tell the tale of a man who is self-deceived, believing a lie of his own fabrication. Somehow, this poor sap has convinced himself that he is a Casanova, the apple of some woman’s eye, when in fact he has never been so much as a blip [...]

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Celebrating the End of a Rigged Game

Tom (Stock research analyst): “Hi Fred. Can I get a little confirmation that we’re still on track for the quarter? Fred (Public company chief financial officer): We’ll be fine. In fact, a couple of deals came in last week and we’ll be two cents to the upside and we’ll probably raise Q4 guidance. The sales [...]

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Is There Hidden Risk In Your Portfolio?

During his summer break from college, my son tried to sell me on the merits of the popular TV series, Burn Notice. In this TV drama, Jeffrey Donovan plays Michael Westen, a former covert operative who unjustly receives a “burn notice” – an espionage-style termination that results in the immediate eradication of his assets and influence, [...]

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How To Use ETFs To Measure Your Mutual Funds

“Once I had fame, oh I was full of pride, had lots of friends, always here right by my side, well my fame oh it died, now my friends all try to hide, everybody loves a winner … but when you lose, you lose alone.” -   William Bell, “Everybody Loves A Winner” In all highly [...]

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The Calculus of Trust

The bestselling book “Freakonomics” chronicles the search for the hidden incentives behind all sorts of behavior.  It characterizes the field of economics as the study of incentives – how people get what they want, or need, especially when other people want or need the same thing.  “Freakonomics” gives entertaining examples of how odd results can [...]

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Assets Out of Management — Challenging 'Assets Under Management'

A few weeks ago BP CEO, Tony Hayward, felt the heat of America’s ire for his “I want my life back” gaffe. This week, BP Chairman, Carl-Henric Svanberg, may have out done him, commenting before Congress “BP cares about the small people”. After 11 deaths, destruction of Gulf fisheries and a local economy in shambles, [...]

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