Behavioral Finance

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Weekend Reads for Investors: A Building Froth in Stocks

Weekend Reads

There is a speculative froth building in US stocks that is hard to ignore these days. Facebook was motivated to pay $19 billion for mobile messaging firm WhatsApp in order to gain access to their reported 450 million user base rather than their meager revenue stream, estimated at $20 million in 2013. This brings to mind the price-to-eyeballs metric that was first popularized by then–Morgan Stanley analyst Mary Meeker during the dot-com boom of the late 90s. Read more

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Weekend Reads for Finance Pros: Math, myRa, and Magic

Weekend Reads

I was in Garden Grove, California, this week for CFA Institute’s Wealth Management 2014 conference. There were many great presentations, but one loomed large for me: the session on elder care planning. At the outset, we polled delegates on the percentage of their clients that have a plan in place for long-term care costs. Fifty-five percent said “less than 25%.” That’s a very worrisome — although not altogether surprising — result when you consider that at least 70 percent of people over 65 will need long-term care services and the fact that most people don’t realize Medicaid does not cover long-term care expenses. Read more

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