By Ann Logue on February 10, 2012
At this point, we all know what happened: Susan G. Komen for the Cure decided to cut grant funding for Planned Parenthood, the executives gave conflicting stories about why it was cutting funding, and people all over raged on Facebook, Twitter, and what have you. Once criticism that I saw, several times, was the idea that the complainers had no right to complain as it was a private foundation and, anyway, it was just free money to Planned Parenthood. Couldn’t they give money to any organization they pleased?
Every finance student has to memorize the goal of a corporation: maximizing shareholder value. The shareholders elect a board of directors to represent them and oversee management. The board members are all shareholders. Now, board candidates are often proposed by senior management, run out and buy 50 shares so they can stand for election, then rubber stamp the CEO’s ideas. We know that. We also know that conscientious board members may disagree about how best to maximize shareholder value (short term or long term? Dividends or capital gains? And how – new products? Acquisition? International expansion?) Nevertheless, there are laws, norms, and fiduciary responsibilities in place.
Continue reading “Fiduciary Responsiblity and Susan G. Komen for the Cure”
Posted in Fiduciary responsibility, Political Discourse, Socially Responsible Investing | Tagged corporate governance, Fiduciary responsibility, non-profit governance, Planned Parenthood, Socially Responsible Investing for Dummies, Susan G. Komen for the Cure |
By Ann Logue on January 29, 2012
Last week, I spoke at a meeting of the Chicago chapter of Women Advancing Microfinance along with Caroline Allen of Creation Investments. Here’s a recap of my speech:
Essentially, we can think of social investing two ways. One is finding investments for people who want to invest socially, and the other is improving the environment, social conditions, and corporate governance. All of this is against a backdrop of struggling financial markets and tremendous upheaval in the United States and Europe.
Continue reading “Current Trends in Social Investing”
Posted in Chicago, Emerging Markets, Socially Responsible Investing | Tagged Caroline Allen, Creation Investments, credit unions, emerging markets, Emerging Markets for Dummies, Occupy, social investing, Socially responsible investing, Socially Responsible Investing for Dummies, Women Advancing Microfinance |
By Ann Logue on November 18, 2011
I do guest-blogging occasionally to promote my books. When Hedge Funds for Dummies came out, I wrote a post for the Hedge Fund Implode-o-Meter about some of the hedge fund scandals of the day.
Here’s what I wrote on that site in 2007:
Keith Gilabert, who operated the Capital Management Group Holding Company that managed a hedge fund, the GLT Venture Fund, raised $14.1 million from 38 investors beginning in September of 2001. The fund posted losses almost from the beginning, but it reported gains to investors. Gilabert charged his management fees based on the phony profits, and he also received commission kickbacks from one of the brokers with whom he did business. When investors made withdrawals, they received funds from new people coming in, not from the fund’s assets. There is also evidence that he mass-marketed the fund, in violation of the rules requiring unregistered funds to deal only with accredited investors. He is alleged to have been assisted by someone at a large brokerage firm. Gilabert pleaded guilty in April of 2006.
Ironically, as part of his marketing activities, Gilabert issued a press release in September of 2004 noting that hedge funds were not always risky. In it, he suggested that investors look for certain safeguards for their assets, such as funds being held at outside financial institutions and monthly statements listing every holding in the portfolio.
There were two warning signs that might have been uncovered in due diligence. The first is that the fund was not formed until 2000, but it claimed performance dating back to 1997. The second is that in 2003, the California Department of Corporations revoked Gilabert’s investment adviser registration.
Continue reading “Keith Gilabert Pled Guilty. That’s A Fact.”
Posted in Financial writing, Hedge Funds | Tagged California Department of Corporations, Hedge Fund Implode-o-Meter, Hedge Funds for Dummies, Investment Fraud, Keith Gilabert, SEC |
By Ann Logue on November 1, 2011
A friend of mine serves on the sustainability committee of his alma mater, a large state university. At a recent meeting, he suggested that the committee look into sustainable investments for the endowment, and the committee representative from the board of trustees got upset. My friend asked me if I could send him information that shows that social investment outperforms regular investment.
I had to tell my friend that I could not, because it does not. To the disappointment of social investing advocates, social investing does not outperform traditional investing. But, despite what many in the traditional investing business like to say, it does not have to underperform traditional investing. Pension funds have a legal obligation to place investment performance ahead of all other considerations, and that goes for Catholic hospital and labor union pensions with social investment restrictions. Many social funds outperformed in the financial crisis, but that was skewed by Islamic finance funds that would not invest in banks or other financial institutions.
I should add that most traditional investing underperforms the market to begin with, so these critics shouldn’t be so smug. If you can’t beat a cheap index mutual fund, with all of its tobacco companies and defense contractors, you should not be casting aspersions. I don’t say that lightly, either.
Continue reading “Some Challenges with SRI on Campus”
Posted in Socially Responsible Investing | Tagged index investing, investment ethics, Jesuit investing, responsible endowments coalition, Socially responsible investing, Socially Responsible Investing for Dummies, sustainable investing, university business |
By Ann Logue on October 22, 2011
Annie here: Today, I have a guest post on covered calls. As always, no trading or investment strategy is right for everyone, and past performance does not indicate future results. With that in mind, if you want to learn more about covered calls, Mike has some ideas for you.
Covered Calls: Earn 1.5% Per Month And Have Downside Protection
by Mike Scanlin
Website: http://www.borntosell.com
Covered calls are a popular and well-practiced investment strategy used by income investors. In-the-money buy-writes can be used to generate 1.5% per month or more. Although fairly consistent in their ability to generate income, some covered call investors suffer losses during bear markets. Often missing from their portfolios are discipline, diversification, and patience. Let’s examine those and then consider a portfolio for the November option cycle.
Continue reading “Guest Post: Mike Scanlin of Born To Sell on Covered Calls”
Posted in Day Trading, Guest Post | Tagged 15 Years of the Russell 2000 Buy‐Write, Born to Sell, Covered calls, Day Trading, Day Trading for Dummies, income strategies, Mike Scanlin, Nikunj Kapadia, trading strategies |
By Ann Logue on October 14, 2011
Yesterday, I was looking up some a
rticles about hedge funds in Fortune Magazine’s archives, and I had to use microfilm. Microfilm! The magazine’s web archives only go through the 1980s, and EBSCO’s only through the 1970s. (That’s an electronic database available through larger libraries.)
I had forgotten how to use a microfilm reader and had to have a librarian show me.
One of the articles I wanted was an April, 1966 interview with Alfred Winslow Jones, considered to be the inventor of the hedge fund. It was the first article that really explained the concept to the wide world.
Continue reading “Two T’s in Buffett, Two E’s in Steel”
Posted in Financial writing, Hedge Funds | Tagged 1966, Alfred Winslow Jones, Carol Loomis, Danielle Steel, Fortune magazine, hedge funds, microfilm, Warren Buffett |
By Ann Logue on October 3, 2011
Egypt has always been a frustrating market for emerging markets investors. With 80 million people and a tradition of education, it is larger and more established than most nations in the Middle East and Africa. Investors have long had the expectation that Egypt would be the Next Big Thing. The country has been independent of Great Britain since 1952, and it experienced another revolution early this year. What, if anything, does that mean for investors?
It means a lot more uncertainty. One of the issues affecting Egypt is tension between conservative Muslims who would like the country to be more religious and secular Egyptians, many of whom are also Muslim, who would like the country to focus on being a modern economic power. Neither group seemed happy with the government, the result being riots in the spring of 2011 and the overthrow of Hosni Mubarak, who was the fourth president of Egypt. Elections have been scheduled for November 28, and much hinges on them. Will the people of Egypt be able to come together? What will the new nation look like? And, will the new government support economic growth, or will it have other priorities?
Continue reading “Emerging Markets Update: Egypt”
Posted in Emerging Markets | Tagged Egypt, Egyptian election, emerging markets, Emerging Markets for Dummies, investing in Egypt |
By Ann Logue on September 30, 2011
Someone asked me the other day about day trading simulations, giving me an idea for a post. Hurray!
There are a few options out there. Most brokerage firms that deal with traders offer simulation trading for their customers, but you usually have to open an account to access those features.
More than one trader has gotten started by watching the market fro buy and sell points, entering phantom trades in a spreadsheet, and then calculating performance. It’s not glamourous, but it works.
The Chicago Board Options Exchange offers an online trading game called OptionQuest, if you want to try out options trading. If stocks are more your thing, MarketWatch offers a stock market game and Investopedia has its stock simulator (with a Canadian version, if that suits your needs best).
If you want to compete for real money, you can try the CNBC Million Dollar Challenge. This year’s contest is billed as the fourth annual, but it hasn’t run in consecutive years. There as a nifty scandal a few years back in which some contestants found a bug that let them enter trades after the market closed. That is a little reminder that trading games are not the same as real trading; the rules and the regulators may be a little different, and the stakes change when the bucks are real. Still, it makes a lot of sense to practice before jumping in to real markets.
Posted in Day Trading | Tagged CBOE OptionQuest, CNBC Million Dollar Challenge, Day Trading, Day Trading for Dummies, day trading for dummies for Canadians, Investopedia stock simulator, MarketWatch stock market game |
By Ann Logue on September 16, 2011
In Emerging Markets For Dummies, I have a summary of each of the markets in the MSCI Emerging Markets and Frontier indexes. Since publication in January, no markets have changes as much as those of the Middle East and North Africa, so I’m writing updates. The first installment: Bahrain.
Type of government: Constitutional monarchy
Major industries: Aluminum smelting, fertilizers, insurance, iron pelletization, Islamic and offshore banking, petroleum processing and refining, ship repair, tourism
Median age of population: 30.9 years
GDP per capita: $40,300
MSCI 2010 equity market return: in local currency, -21.43% ; in US dollars, -21.42%
Currency: Bahraini dinar
English-language newspaper: Gulf Daily News
Bahrain is in the MSCI Frontier Markets index. It’s a tiny country, with about 1.2 million residents, both citizens and expatriates. It was long considered to be one of the most stable and open countries in the Middle East, which makes it a popular site for the regional offices of different multi-national corporations. The opposition, mostly Shia Muslims who opposed the Sunni ruling family, was mostly small and quiet. Until this spring. The Shia opposition was inspired by uprisings elsewhere in the Middle East and launched full-scale protests, with lots of violence and mayhem following. The government is still in place. There’s a lot of uncertainty in the country now, which makes it a high-risk situation for investors. You need to watch the news carefully to see how it plays out.
Posted in Books, Emerging Markets | Tagged Arab Spring, Bahrain, emerging markets, Emerging Markets for Dummies, Middle East |
By Ann Logue on September 8, 2011
For decades, investors have been hearing that the Next Big Thing will be Africa. I wonder how many people missed out on inflection points in India and China because they were looking at Africa? No matter.
Africa, of course, is a continent. The Republic of South Africa has as much in common with Sudan as Point Barrow, Alaska has with Cancun: on the same continent, yes, but very different in terms of economy, climate, and interests of the people. Many African countries are poor and have irresponsible governments. And many African countries are prosperous and democratic. (None is rich – yet.)
One of the features of Emerging Markets for Dummies is a guide to each of the world’s emerging and frontier markets. It has information on the economy, the challenges, English-language business publications, and other items to help people research the markets. Most of Africa’s emerging markets are in the north, along the Mediterranean. That’s not surprising; the proximity to Europe has allowed these nations to establish strong traditions of trade and commerce.
However, it seems like every nation in North Africa has changed since the book came out! The Arab Spring has been amazing to watch. And, to the point here, it shows just how much fluidity is in emerging markets. The reason that they have great opportunities is that they also have great risk.
In coming weeks, I’m going to update the information on North Africa’s emerging markets here. Something to watch for, eh?
Posted in Emerging Markets | Tagged Africa, Arab Spring, emerging markets, Emerging Markets for Dummies, North Africa |
