Comments for Arohan's investing life http://www.arohanvalue.com Commentary on investing and events with distinct value tilt Thu, 28 Aug 2008 09:07:40 +0000 http://wordpress.org/?v=2.3.1 Comment on Investing in 401K plans - when is it not worth the trouble by Arohan http://www.arohanvalue.com/2008/01/04/investing-in-401k-plans-when-is-it-not-worth-the-trouble/#comment-181 Arohan Wed, 27 Aug 2008 19:18:54 +0000 http://www.arohanvalue.com/2008/01/04/investing-in-401k-plans-when-is-it-not-worth-the-trouble/#comment-181 @boy, Thanks for your comment! I agree it is difficult to be an above average investor but it also follows by definition that there are a quite a few people who are above average. Personally, if I feel that a mutual fund manager or a CEO of a company (like Buffett or Cummings and Steinberg) can generate better return than I can, by all means I will defer to their prowess and invest with them. But as I have stated, all things being equal and if you do not have time or inclination to put in the effort for due diligence, buy index funds and stay with your retirement plan. None of these analyses is any good if a person lacks the commitment to save Point well taken that for most investors 401k plans make a lot of sense. Just wanted to highlight some situations where it may not. Please keep the comments coming. @boy,

Thanks for your comment! I agree it is difficult to be an above average investor but it also follows by definition that there are a quite a few people who are above average. Personally, if I feel that a mutual fund manager or a CEO of a company (like Buffett or Cummings and Steinberg) can generate better return than I can, by all means I will defer to their prowess and invest with them. But as I have stated, all things being equal and if you do not have time or inclination to put in the effort for due diligence, buy index funds and stay with your retirement plan. None of these analyses is any good if a person lacks the commitment to save

Point well taken that for most investors 401k plans make a lot of sense. Just wanted to highlight some situations where it may not.

Please keep the comments coming.

]]> Comment on Investing in 401K plans - when is it not worth the trouble by boy http://www.arohanvalue.com/2008/01/04/investing-in-401k-plans-when-is-it-not-worth-the-trouble/#comment-178 boy Mon, 25 Aug 2008 17:06:58 +0000 http://www.arohanvalue.com/2008/01/04/investing-in-401k-plans-when-is-it-not-worth-the-trouble/#comment-178 I like the article a lot. It makes people think a bit more in depth than one typically does. I, for one thing, doubt that I can be an above average investor and therefore concentrate on keeping costs down. Most people are, after all, just average. To look at this from another angle, I think individuals should take a more behavioral approach to how they will save/invest. I think it's safe to say when people have money that's relatively easy to get to, they're more likely to spend it. People with money in general investments are more likely to take money out for a nice remodeling job than from a 401k. With that said, the 401k serves as a sort of "reality" check for people to get used to a particular lifestyle that will be much more sustainable when they retire. It's a heck of a lot easier to "pretend" that your income is 20% less than what it actually is with a 401k, but that's just plain un-American :) I like the article a lot. It makes people think a bit more in depth than one typically does.

I, for one thing, doubt that I can be an above average investor and therefore concentrate on keeping costs down. Most people are, after all, just average.

To look at this from another angle, I think individuals should take a more behavioral approach to how they will save/invest. I think it’s safe to say when people have money that’s relatively easy to get to, they’re more likely to spend it. People with money in general investments are more likely to take money out for a nice remodeling job than from a 401k.

With that said, the 401k serves as a sort of “reality” check for people to get used to a particular lifestyle that will be much more sustainable when they retire. It’s a heck of a lot easier to “pretend” that your income is 20% less than what it actually is with a 401k, but that’s just plain un-American :)

]]> Comment on Why Warren Buffett is richer than the Hedge Fund managers - a tale of two business models by Varun http://www.arohanvalue.com/2008/03/12/why-warren-buffet-is-richer-than-the-hedge-fund-managers-a-tale-of-two-business-models/#comment-177 Varun Thu, 07 Aug 2008 16:32:57 +0000 http://www.arohanvalue.com/2008/03/12/why-warren-buffet-is-richer-than-the-hedge-fund-managers-a-tale-of-two-business-models/#comment-177 The owning a business thing is just great in that case, I only thought it's the ways of investing, Long Termism Vs. The Hedge Fund Method, is what we were talking about in your article. The owning a business thing is just great in that case, I only thought it’s the ways of investing, Long Termism Vs. The Hedge Fund Method, is what we were talking about in your article.

]]> Comment on Can Hedge funds really beat the market over a long term? by Arohan http://www.arohanvalue.com/2008/07/15/can-hedge-funds-really-beat-the-market-over-a-long-term/#comment-176 Arohan Thu, 31 Jul 2008 08:11:34 +0000 http://www.arohanvalue.com/2008/07/15/can-hedge-funds-really-beat-the-market-over-a-long-term/#comment-176 Agreed that it is tremendous publicity for the fund in question. Let's see how it pans out Agreed that it is tremendous publicity for the fund in question. Let’s see how it pans out

]]> Comment on Can Hedge funds really beat the market over a long term? by Saj http://www.arohanvalue.com/2008/07/15/can-hedge-funds-really-beat-the-market-over-a-long-term/#comment-175 Saj Thu, 31 Jul 2008 02:35:02 +0000 http://www.arohanvalue.com/2008/07/15/can-hedge-funds-really-beat-the-market-over-a-long-term/#comment-175 Seems like a no-lose proposition for the hedge fund. The publicity and "confidence" they exude in their ability to beat the S&P 500 will garner more money in the way of client fees than it's costing them. This is a $240K "superbowl" ad they purchased at a discount with a positive IRR. <em>Saj's last blog post..<a href='http://feeds.feedburner.com/~r/BarelKarsan/~3/350685751/investment-zoo-chapter-6-investment.html' rel="nofollow">The Investment Zoo Chapter 6: The Investment Business: caveat emptor!</a></em> Seems like a no-lose proposition for the hedge fund. The publicity and “confidence” they exude in their ability to beat the S&P 500 will garner more money in the way of client fees than it’s costing them. This is a $240K “superbowl” ad they purchased at a discount with a positive IRR.

Saj’s last blog post..The Investment Zoo Chapter 6: The Investment Business: caveat emptor!

]]> Comment on Why Warren Buffett is richer than the Hedge Fund managers - a tale of two business models by Arohan http://www.arohanvalue.com/2008/03/12/why-warren-buffet-is-richer-than-the-hedge-fund-managers-a-tale-of-two-business-models/#comment-174 Arohan Tue, 29 Jul 2008 14:15:17 +0000 http://www.arohanvalue.com/2008/03/12/why-warren-buffet-is-richer-than-the-hedge-fund-managers-a-tale-of-two-business-models/#comment-174 @Varun, Thanks for stopping by and hope to have you visit regularly! There are many, including me, who believe that there is no difference in owning a business and owning an investment. In both cases, you own a piece of the business (outright versus partial). Ultimately the wealth or the net worth is determined by the assets you own, regardless of how you own it and the business decisions you make while owning the assets. The article was meant to point out precisely the difference between the two ownership structures and the effect it has on one's net worth over a long period. If two people are given same amounts of money, the way they choose to invest it may have a great impact on the net worth they end up with. The fact that Warren Buffet is the richest person on earth kind of ends all arguments about which investing method is better. Now of course, we are talking about different time horizons here, most of the hedge fund managers have been investing for shorter time than Buffett, so it is kinda difficult to say with conviction that some of them may or may not outperform Buffett over a long period. We can have a good discussion on this but may never know for sure (As an aside, there are stocks that have performed better than Berkshire Hathaway over the last 18-20 years. Leucadia National comes to mind) @Varun,

Thanks for stopping by and hope to have you visit regularly!

There are many, including me, who believe that there is no difference in owning a business and owning an investment. In both cases, you own a piece of the business (outright versus partial). Ultimately the wealth or the net worth is determined by the assets you own, regardless of how you own it and the business decisions you make while owning the assets.

The article was meant to point out precisely the difference between the two ownership structures and the effect it has on one’s net worth over a long period. If two people are given same amounts of money, the way they choose to invest it may have a great impact on the net worth they end up with.

The fact that Warren Buffet is the richest person on earth kind of ends all arguments about which investing method is better. Now of course, we are talking about different time horizons here, most of the hedge fund managers have been investing for shorter time than Buffett, so it is kinda difficult to say with conviction that some of them may or may not outperform Buffett over a long period. We can have a good discussion on this but may never know for sure

(As an aside, there are stocks that have performed better than Berkshire Hathaway over the last 18-20 years. Leucadia National comes to mind)

]]> Comment on Why Warren Buffett is richer than the Hedge Fund managers - a tale of two business models by Varun http://www.arohanvalue.com/2008/03/12/why-warren-buffet-is-richer-than-the-hedge-fund-managers-a-tale-of-two-business-models/#comment-173 Varun Tue, 29 Jul 2008 09:40:50 +0000 http://www.arohanvalue.com/2008/03/12/why-warren-buffet-is-richer-than-the-hedge-fund-managers-a-tale-of-two-business-models/#comment-173 This analysis between Buffet and a Hedge Fund isnt quite upto the mark in the sense that its a comparison of the wealth of the owners, which have been managed differently... instead it should be a comparison between the 2 ways of investing, the way they've earned it, i.e. the Hedge Fund Way and the Buffet Way (aka Long Termism), it should be like, 2 people with the same amounts of money at a given date, applying the 2 methods and after about 5 years, where does that take you ? This analysis between Buffet and a Hedge Fund isnt quite upto the mark in the sense that its a comparison of the wealth of the owners, which have been managed differently… instead it should be a comparison between the 2 ways of investing, the way they’ve earned it, i.e. the Hedge Fund Way and the Buffet Way (aka Long Termism), it should be like, 2 people with the same amounts of money at a given date, applying the 2 methods and after about 5 years, where does that take you ?

]]> Comment on Managing idle cash in this low interest environment by Psychic Advice http://www.arohanvalue.com/2008/04/25/managing-idle-cash-in-this-low-interest-environment/#comment-169 Psychic Advice Sun, 13 Jul 2008 18:47:25 +0000 http://www.arohanvalue.com/2008/04/25/managing-idle-cash-in-this-low-interest-environment/#comment-169 Too bad i didnt come across this blog before. Great stuff you got here. Thanks. Too bad i didnt come across this blog before. Great stuff you got here. Thanks.

]]> Comment on Obama has a plan to slow down the economic growth engine of US by fallout11 http://www.arohanvalue.com/2008/03/27/obama-has-a-plan-to-slow-down-the-economic-growth-engine-of-us/#comment-168 fallout11 Fri, 11 Jul 2008 17:37:01 +0000 http://www.arohanvalue.com/2008/03/27/obama-has-a-plan-to-slow-down-the-economic-growth-engine-of-us/#comment-168 A flat tax is regressive in the extreme (and well documented as such). Likewise, if capital gains taxes represent partial double taxation, so do sales and value added taxes (VAT), since the retailer or manufacturer paid taxes on the original purchase/raw materials. Nothing new here. Somehow it has been forgotten that the vaunted "US Economy" is not driven by mergers and acquisitions, shareholder value, quarterly profits, capital gains, or end of year bonuses for Hamptons residents. Rather, it is driven by average Joe Schmucks working 40 hours a week and purchasing everyday pedestrian goods and services, such as Big Macs and gas for the car (>78%). A flat tax is regressive in the extreme (and well documented as such).
Likewise, if capital gains taxes represent partial double taxation, so do sales and value added taxes (VAT), since the retailer or manufacturer paid taxes on the original purchase/raw materials. Nothing new here.
Somehow it has been forgotten that the vaunted “US Economy” is not driven by mergers and acquisitions, shareholder value, quarterly profits, capital gains, or end of year bonuses for Hamptons residents. Rather, it is driven by average Joe Schmucks working 40 hours a week and purchasing everyday pedestrian goods and services, such as Big Macs and gas for the car (>78%).

]]> Comment on Stock investors, who is the next Warren Buffett - Part 1 by fleming http://www.arohanvalue.com/2008/04/17/stock-investors-who-is-the-next-warren-buffet-part-1/#comment-166 fleming Tue, 17 Jun 2008 12:45:37 +0000 http://www.arohanvalue.com/2008/04/17/stock-investors-who-is-the-next-warren-buffet-part-1/#comment-166 I think you are very brilliant because of your thinking in investment. Our people want to learn more from you. Thank you for giving this great opportunity to comment about you. ----------------------------------------------------------- fleming IVA is a less severe debt solution than bankruptcy. It has less social stigma and it lets you keep your house and your car which you would lose in case of bankruptcy. You might also be able to write off a significant portion of your debt at the end of the IVA. <a href="http://www.debtfreedirect.co.uk/bankruptcy/bankruptcy.htm" rel="nofollow">IVA</a> I think you are very brilliant because of your
thinking in investment.
Our people want to learn more from you.
Thank you for giving this great opportunity to comment about you.

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fleming
IVA is a less severe debt solution than bankruptcy. It has less social stigma and it lets you keep your house and your car which you would lose in case of bankruptcy. You might also be able to write off a significant portion of your debt at the end of the IVA.

IVA

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