Hey folks, I’m still here. Been doing a lot of golfing, amusement park going, beach combing, etc. I love summer and hot weather and don’t want to waste it by being indoors. This is just a ping to let you know everything is fine and that you can expect a show 161 probably next week. It would help if we got a rain day or two.

I have updated the Lazy Portfolio Smackdown page to show the preliminary results for 2008. Note that after a few weeks the results will be updated once again after Yahoo! gets their dividend data included in the historical quotes for each fund. I do not think that the dividend data will alter the results though.

The game started one year ago. I asked people to create a buy and hold portfolio of index funds or ETFs that would exhibit the best return-to-risk ratio in 2008. This would be measured by “top-leftedness” on a plot of Return on the Y axis and Standard Deviation on the X axis. For positive returns, the Sharpe Ratio accomplishes this nicely. But when all returns are negative, the Sharpe Ratio gets screwy (a technical term) and I had to reset 0%  to be at -50% to make it work. Even when all returns are negative, we still want to be top left on the chart.

Winners were to be selected from each of three risk bands: 0% to 8%, 8% to 16%, and then 16%+. Funny how the game worked out. Last year was a RISKY year. Only one person had a portfolio with a Standard Deviation of less than 8%. Congratulations Cosmo, you had a STDEV of 3.5% and a return of 5.1% with your portfolio holding a single fund: the Vanguard Short-Term Bond Index (VBISX). You are the winner of Index Funds: The 12-Step Program for Active Investors by Mark Hebner. And if you actually had your net worth invested in that portfolio, you had a great 2008.

Next up, the medium risk band. As it turned out, nobody had a positive return here, as you can see in the following chart. Which one is top left? The one who lost the least amount is Ariel with a return of -12.6% and a STDEV of 8.2%. Ariel also put the entire net worth in one fund: Vanguard Wellesley Income Adm (VWIAX). Congratulations Ariel, you too are the winner of Index Funds: The 12-Step Program for Active Investors by Mark Hebner. 

Finally the guys who took great risk. This one is a littly silly because here you can gamble on something extremely risky and come out the winner if your number comes up. I should have limited it to something reasonable like 25% or something. Nonetheless, the winner is mudfud who invested in one fund: the China Bear 2X Fund (which was closed on November 14th by the way). Now who in their right mind would really put 100% of their portfolio in this fund? That wasn’t the idea behind this game. Still, if you could handle a risk of 56.1%!!!! OUCH!!! then you got a return of 42.4% for your gamble. Congratulations mudfud, you too are the winner of Index Funds: The 12-Step Program for Active Investors by Mark Hebner.

You can see all of the other entries at the Lazy Portfolio Smackdown page and you can see the portfolios of the so-called “Professionals” — those who make a living recommending portfolios to folks like us.

I’ll be talking more about the results on the Mad Money Machine podcast. Please load it into your iTunes or visit MadMoneyMachine.com to listen on your computer.

US auto bankruptcy, bank bailouts, $50 billion Ponzi scheme, rising unemployment, layoffs, gold backwardation, Cramer saying markets are corrupt, inflation, deflation, on and on and on and on. Hey guys, the torrent of news, mostly bad, is unbelievable. I’m so awash in it that I’m wondering how I can deal with it on the show this week. I’m so bewildered by it all that I could not get stuff together in a meaningful way for a show today. Maybe I’m spending too much time reading and analyzing the news. Maybe I should do what is right and turn off the internet. (Ha, the phrase used to be turn off the TV.)

So I’m going to take a breather, do some exercising, clear my head, go to a Christmas party, take a step back, and reassess. Then try to pump out a show early next week. OBTW: Mad Money Machine will be celebrating its three year anniversary on the next show. Like I need that added challenge of doing something special.

Is it just me, or did the Microsoft Live.com CashBack program drop to 8% from 25%? Comment at Drop.io/MadMoneyMachine if you want.

I like the things IFA did with the new version of their Quote of the Week video (Episode 40):

http://video.google.com/videoplay?docid=-5827003748799795690

http://www.youtube.com/watch?v=1EQovKt0dSM

http://www.ifa.com/advisorcam/index.aspx?video=mb15

A show or two ago, I mentioned using the Microsoft Live.com CashBack program to get 25% off a Buy-It-Now purchase from eBay. It seems to have worked. If you are buying an expensive item from eBay, definitely look into this program.

Lemme know what you think of this podcast/YouTube episode:

Please stop by PodcastAwards.com every day and vote for Mad Money Machine in the “Best Mobile Phone Formated [sic] Podcast” which is the 2nd one down on the right column.

Thank you for nominating the Mad Money Machine podcast at PodcastAwards.com.

Strangely, you nominated it for the “Best Mobile Phone Formated [sic] Podcast”. I was kinda hoping for “Best Business Podcast” but I’ll take whatever I can get. Does seem like a typo though (or a categoryo).

Is the MMM really that good on a mobile phone? I know I like it on my iPhone, but I don’t put any special graphics in or anything. Perhaps it is because I work endlessly making the sound come out level? And that makes it easier to listen to on a phone? Anyone have any suggestions why, please email me.

Nonetheless, I am grateful. Thank you for nominating MMM. It will help me help you.

I am having trouble keeping up with all the economic news. And why should I, really, if I’m a buy and hold investor? Oh yeah, I do a podcast in the investing category. Well, like my momma told me, if you don’t have something nice to say, don’t say anything at all. Therefore, show 129 will be delayed a few days until I can bring together something coherent and informative. 

In the meantime, visit Ron Paul’s Campaign for Liberty and see what he has to say.

Also, visit IFA.com and read Mark Hebner’s sidebar called The Invisible Hand and Why Prices Change? 

I actually recorded some stuff for show 129 today and I’m going to delete most of it and instead let you get the info directly for yourself. I wanted to focus on three people I respect get their opinions of what is going on with the financial crisis and what we should be doing right now. The three people are Ron Paul, Mark Hebner, and Jim Cramer. Please visit these links yourself instead:

• I read Letter from Ron: Time is Running Out
• I played the audio from Mark: Should you be worried?
• I talked about Cramer who says buy gold.