Making A Case For Index Fund Portfolios

Richard Ferri and Alex Benke have recently published a great article entitled A Case For Index Fund Portfolios.  The article is available in this month's Journal of Index, here.  In essence, you are statistically much better off investing in a portfolio of index funds versus a portfolio of actively managed funds.  And as additional asset classes are added and as your holding period becomes longer, this index fund portfolio beats the portfolio of actively managed funds 90% of the time, even with low-cost actively managed funds.

Prudent Target-Risk Indexes

In the August 2013 of the the Journal of Indexes, the article "Prudent Target-Risk Indexes" discusses a portfolio of I believe all ETFs used as a benchmark for a global allocation portfolio.  It seems like a great basis for portfolio construction.  Below are the investments used and weightings:

Danny Boyle on Sound and Music for Trance

In the May 2013 issue of Post Magazine, Director Danny Boyle comments on the importance of sound and music for his latest film, Trance:


"POST:  As usual, the sound and music are also key elements in this film.

BOYLE: “They’re hugely important to me as a filmmaker. I actually believe — and we don’t realize this as an audience — that it’s at least 70 percent of a film, if not more. If you have bad sound, any movie is unwatchable, and if you turn the sound off on any film, most are also unwatchable. They just don’t work. It’s extraordinary, and sound recordists often get treated so badly on sets, even though the audio is so vital. But if you have a film with bad visual quality, you can get away with it.  In fact, your eye adapts quite quickly.  28 Days Later, for instance, was a very rough-looking film deliberately, and it didn’t faze anyone.  But there’s no way around bad sound. If you can’t hear dialogue and so on, it’s a disaster.  The opposite side is just how effective a film can become when you have really good use of sound..."

Commodities In A Portfolio

I'm always trying to find hard data on how much to allocate to commodities.  Sal Gilbertie has written an article that helps this endeavor:

http://www.indexuniverse.com/publications/journalofindexes/joi-articles/12272-commodities-in-a-portfolio-.html?showall=&fullart=1&start=6

WDM Audio in the Professional Environment

There's a great PDF from the guys at Digital Audio Labs in Minnesota entitled WDM Audio in the Professional Environment.  It talks about latency, realtime sampling rate conversion, bit depth conversion, and other gotchas.

Use the 10-Year CAPE for Long-Term Outsized Returns

Mebane Faber has a fascinating investment paper called Global Value: Building Trading Models with the 10 Year CAPE in which he discusses a strategy that invests equally-weighted in the most undervalued x% of country equities, rebalanced yearly, as measured by their 10-year CAPE (cyclically adjusted price-to-earnings ratio), and only when this measurement is below 15 (otherwise in cash).  It looks like investing in the top 10% of undervalued companies will give you an annual return of nearly 19%!  I sorted the study's 32 countries by 10-year CAPE, and this is what I got:

So according to the study, for outsized returns the top 10% of undervalued (and currently extremely distressed) countries to invest in are Greece, Ireland, Italy, and maybe Russia!!!  The top 25% would include the PIIGS.  With today's financial headlines all about the European sovereign debt crisis, that would take some serious conviction and courage for any investor.

In the May 1, 2012 issue of Post Magazine, when asked about audio in his movies, Director Barry Sonnenfeld states, "I remember the first film I ever shot as a DP was Blood Simple for the Coen brothers, and they’re very visual, but when it came time to choose a New York theater for the premiere, they chose a theater with much better sound but lousier projection, as opposed to one with great projection and lousy sound.  As the DP I was outraged!  But the truth is, if you asked me right now to choose between screening MIB3 in a theater with better sound or one with better projection, I’d pick the one with the better sound.  So sound’s really important to me."