Wednesday, February 26, 2014


For those of you that are interested in the stock market I'm sure you read about the advantages of investing in low cost market index funds.  As the expectations for hedge fund rate of returns continue to decline, more and more money will head toward the indexes.  Whether this is good or bad is entirely another story.

For lack of being able to put it in a better context, I draw your attention to the liberal Attorney General of New York State.  A "lightweight" according to Donald Trump, and probably a light weight in reality.

Recently the Attorney General of New York State made some kind of agreement that asset management firms had to change the way they solicit information from Wall Street analysts.  First of all there is some serious question of whether most information solicited from analysts, on a repetitive basis, adds over time to the performance of equity portfolios.  I venture to say that it doesn't.

But this is not the point.  Our economic system is predicated on the hope that one can rise from the ashes to the top of the heap.  When someone has money to invest, it is human nature to try to make the best possible investment they can.  If they give their money to a "professional" they expect that professional will seek and evaluate information to give the investor some hope of outperforming the returns from the indexes.  It is hope that creates excitement in life.

What the Attorney General of NY is trying to do is a typical liberal ploy of intimating to the public that they are somehow being taken advantage of by money managers seeking to increase the value  of their clients investments.  According to his liberal left wing policy, everyone should be on a a so called "level" playing field.  There can never be such a thing  as a "level" playing field in the world of equity investing, because there is no such thing.

The result of the Attorney Generals' actions will have absolutely no impact on the performance of portfolios. What it will do is take away hope, reduce incentive and move everyone to becoming more and more of a robot.

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