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Passive Investing’s Caveats

by Uncategorized

Michael Burry, investor and mortgage crash money maker*, caused a stir in September when he called index funds a bubble, akin to subprime mortgages. Some High Priests of finance and fans of passive approaches lashed out on social media. Indexing is popular. Even Warren Buffett, a lifelong non-indexer, recommends index funds for 90% of his estate once he dies. Burry's unpopular view fits in the category of the Peter Thiel type question: "What important truth do very few people agree with you on? ...

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Metrics Matter

by Industry TrendsInvestingMetrics

In the misty land of adjusted and "community adjusted EBITDA" (thanks to The We Company for backing out the “building- and community-level operating expenses,”) we are reminded that to embellish is natural. We sometimes hide our worst selves and fill our dating profiles with dogs, filters, and a professed love of poetry. Corporate structures can be "simplified" yet impossible to understand. Exhibit A: The We Company. Some die hard. EBITDA was once a metric for cable companies (due to capital ...

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Amazon’s Health Benefits

by Benefits ToolsThought Leadership

Last year I posted a question on Quora asking what healthcare benefits and cost sharing were like at Google. A few answers of the "it's private" or "No, I can't say" variety soon surfaced. They have sense been oddly scrubbed from the site. Why the secrecy? Rich benefits are a given at Google. Time spent swerving through traffic to drop off dry cleaning, leaving work for lunch, or stressing about a $3,000 deductible cut into productivity. Amazon has rich health benefits and is open and post ...

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Open Enrollment Tips

by Benefits ToolsEducationHDHPs

It's the time of year for leaves, baseball, and 30-page open enrollment guides*. If you're a prospective employee, "we offer benefits" doesn't have the precision on the scale of value as does a first class flights to Europe. "We offer a free first class direct flight to London. Travel dates and times are flexible. Towels and champagne." Some could be peddling the 5-day steamship product as if in the same class. For 95% of people, what matters is the dollar value of healthcare benefits. How ...

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In Praise of Markets

by Investing

Charles Schwab is an investment hero of mine. In 1975, when commissions were deregulated, he pounced at the opportunity to launch a discount brokerage. Discounts are now no longer enough. The line in the chart below extends to zero. This week Schwab announced $0 trading fees. How can they do it? Explicit trading fees are only 7% of Schwab's revenue and the move will surely attract more accounts. The firm followed the lead of the now (I have a hunch) deeply troubled Robinhood, a zero dollar Mille ...