Mad Money Machine

Investments for Inflationary Times (to Come?)

The Austrian economists anticipated the present crisis. Should we listen to them when it comes to their predictions about what comes next? In one voice they are saying we will experience inflation unlike we’ve seen in the USA in over 100 years. Inflation is defined as the increase in the supply of money and credit. […]

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Corrected 12 Month Rolling Returns

In a previous posting , I calculated the 12 month rolling returns for all IFA portfolios. That posting is in error (that I do not believe was my fault). I have corrected it. It turns out that Feb 1, 2008 thru Jan 31, 2009 was not the worst 12-month rolling period, but it did come […]

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Bet Against Cramer, Make Money

Barrons continues their analysis of Jim Cramer’s Mad Money stock recommendations. Bottom line is that their analysis confirms what I learned by experience back in 2006: Cramer’s stock picks are worse than just buying and holding index funds. They actually suggest that buying short-term in-the-money puts on Jim’s recommendations can make you money. They say, […]

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Backtest Portfolio Challenge

[Update: Corrected the image. Note that the Bogle portfolio is corrected in the Google Spreadsheet – to some extent.] I have copied Simba’s Backtest Portfolio spreadsheet from the Bogleheads forum into a Google Spreadsheet that you can use to back test a portfolio of Vanguard mutual funds and compare their performance from 1972 – 2008 […]

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Benchmarking *YOUR* Portfolio

I just remembered a web site that was a Tool many many shows ago. This tool will help you benchmark your portfolio or to test out a new portfolio. It will allow you to compare it against another benchmark and it will calculate returns, standard deviations, and also Sharpe ratios. The web site is http://www.icarra.com […]

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Index Funds: The Musical!

Here’s an easy to digest journey through the 12 Step Program for Active Investors. The 12 steps span four videos. Be sure to watch all four! FOR BEST RESULTS, AFTER YOU CLICK PLAY, CLICK THE ARROW BUTTON IN THE BOTTOM RIGHT THEN SELECT "HQ" TO GET EVERY OUNCE OF INDEXING JOY FROM THESE VIDEOS!!! Steps […]

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Downdraft Keeps A Rollin’ (corrected)

At the end of October 2008 we experienced the worst 12-month rolling period for stocks in 50 years. Then at the end of November we outdid that.  Now at the end of January 2009 we have a new low for a 12-month rolling period in many indexes and portfolios. We came close to the worst […]

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The Randomness of Stock Returns

First look at this… Then look at this… Returns in the stock market are randomly distributed over time.

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Can the Free Market Work in the USA?

Let’s say we suddenly start doing everything right according to the Austrian economics playbook. We go on the gold standard and abolish the Federal Reserve. We drastically cut back federal government spending, including all bailouts. We pull back from all overseas engagements. Would it work? Meaning, would we end up more prosperous in the long […]

Tags: gold austrian economics

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Austrian Investing, Continued

Read an article by Michael S. Rozeff today in which he describes his approach to investing. The article was called "The Opportunistic Investor ."  He says that a year ago he published two articles on buying a diversified portfolio and holding it. That portfolio is down 34 percent. Better than most. He says he actually […]

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Have We Really Lost Wealth?

With the stock market down some 40% last year, many people are asking, "Where did the money go?" Sure there are some stock market losers. But remember the winners, those who sold their stocks in October 2007? They got their money. Remember also that for every share of stock sold, there was a share of […]

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