Mad Money Machine

MMM-114: Expert Predictions

Warren Buffet. Zune. Inflation. Vonage. Bogleheads.org. Backtest Spreadsheet. Sharpe Ratio. STDEV. Efficient Frontier. Box of Cash. Working on MMM-116… its gonna be a runaway hit.

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MMM-114: Expert Predictions [ 28:45 ] Play Now | Play in Popup | Download

The Mad Money Machine is proud to be sponsored by Index Funds Advisors at ifa.com.      

Topics in this week’s show include:      

• Warren Buffet’s Expert Prediction is for a long, deep recession.
• I’ve heard from at least SIX Zune listeners!
• Please take the MMM Survey!
• Warren Buffet paid 19% tax in 2006, same as the 19% tax of GDP rate, write Brandon.
• DOW Chemical hikes prices 20%.
• If we assume prices will go up, then it makes sense to buy large amounts of non-perishable products now. What should I buy? Email me.
• Skwiggs says Vonage is even more expensive than Skype and Magic Jack. Yeah, but they don’t do existing number transfer.
• Diehards.org has now officially become Bogleheads.org. And gotten rid of that clunky old Morningstar forum.
• Our Tool this week is a backtest spreadsheet that Simba worked up over there at Bogleheads.org. You can enter your favorite allocation of Vanguard funds and it will calculate back-tested performance returns and Sharpe ratio going back as far as 1972 through the end of 2007. Use it for the fun of it.
• I explain the Sharpe Ratio. And also Standard Deviation. And I explain how the line from lower left to upper right on a returns vs. risk chart is the Efficient Frontier.
• I review the Lazy Portfolio Smackdown results thru May.
• Man unearths box filled with old cash. Unfortunately, they put it in a box instead of in Index Portfolio 100 because it would be worth $19,861,409 today.
• Show MMM-116 is something I’ve been thinking about doing for over a year now. This one is going to be a keeper for you. Listen to it on your iPod or Zune or iPhone.
• Our Guru this week is Barton Biggs who thinks we need to be ready for breakdown of civilization. But more significantly, he cites Philip Tetlock in saying that Experts should be ignored as random blather because they are less accurate than even non-specialists as to what is going to happen. They are worse than dart-throwing monkeys.
• Nouriel Roubini’s Expert Prediction remains bearish.

Music from music.podshow.com:
ALTA PLAZA – XRAY DOGS
Runaway Train – Under Feather

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