Biz Direct MarketKnowing When To Make A Good Decision

Sep 30, 2010: Today we came across a great deal from Restaurant.com. Since we are frugal diners this special discount on their dining gift certificates is a welcome break for us. Hope it helps in saving some dining dollars.

Beginning now, Restaurant.com is offering 90% OFF on their dining certificates
This means that their $25 dining gift certificates that normally sell for $10 have been

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Correlation? Assets moving in synchrony? Correlation is a misleading statistic of little help in measuring or achieving diversification. Highly correlated funds CAN hedge a portfolio but some uncorrelated strategies are too dependent on underlying markets. Below is a hypothetical hedge fund with +1.00 correlation to the S&P500. Absolute returns every year and +17.65% CAGR but correlated PERFECTLY with a risky index fund which lost money! The product clearly offered diversification despite that pesky correlation.

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Correlation? More assets moving in synchrony? Correlation is a misleading statistic of little help in measuring or achieving diversification. Highly correlated funds CAN hedge a portfolio but some uncorrelated strategies are too dependent on underlying markets. Below is a hypothetical hedge fund with +1.00 correlation to the S&P500. Absolute returns every year and +17.65% CAGR but correlated PERFECTLY with a risky index fund which lost money! Clearly the product offered diversification despite that pesky correlation.

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Correlation? More assets moving together? Correlation is a misleading statistic of no help in measuring or achieving diversification. Highly correlated funds CAN hedge a portfolio whereas some uncorrelated strategies are too dependent on underlying markets. Below is a hypothetical hedge fund with +1.00 correlation to the S&P500. Absolute returns every year and +17.65% CAGR but correlated PERFECTLY with a risky index fund that lost money! Obviously the product offered diversification despite the correlation.

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Sep 22, 2010: We had set aside some time this weekend to pay a visit to our elderly Aunt Jane* and Uncle James*. They are a lovely couple and it’s always a pleasure to spend time with them :).

Our Uncle James is a very serious person with a solid character rooted in good values and habits. On the other hand Aunt Jane is an extremely jovial, a happy go lucky motherly lady who always showers

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[This post is written and copyrighted by FIRE Finance (http://firefinance.blogspot.com).]
Sep 17, 2010: August was a great month of blogging at FIRE Finance. Heartfelt thanks to our faithful readers and the personal finance community for sending traffic our way. We express our gratitude to this month’s top traffic referrers:

Ken via Deposit AccountsJonathan via My Money BlogWise BreadA Working RachelTight Fisted MiserPF BlogsImage Source(s): iStockPhoto

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Correlation? Are “all” securities moving together? Correlation is a misleading statistic that has little to do with achieving diversification. Highly correlated funds CAN hedge a portfolio whereas some uncorrelated strategies are too dependent on underlying markets. Below is a hypothetical hedge fund with a +1.00 correlation to the S&P500. Despite absolute returns EVERY year and +17.65% CAGR, it’s perfectly correlated with a benchmark that lost money!

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Correlation? Lot of talk on high correlations these days amid complaints of “all” securities moving together. But correlation is a misleading metric that has little to do with true diversification. While correlated funds can hedge a portfolio, it is common for uncorrelated strategies to be too dependent on underlying markets. Below is a hypothetical fund with correlation of 1.00 to the S&P500. Despite that +17.65% CAGR, it is perfectly correlated with a benchmark that lost money! I prefer to measure coRelations not coRRelations.

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Stocks or bonds? The BRIC versus BRIC trade has produced good returns this “challenging” year. Since I wrote about it, long Colombia/short China returned +50%, long Indonesia/short India +30%, Bangladesh beat Brazil and Romania rocked Russia. Relative value doesn’t often make money on both sides. Despite China hype, $1m in Colombia in 2000 is now $25m but just $2m from China and losses in developed countries. Economic growth doesn’t imply strong stock markets but I’m more glad I didn’t tie up peoples’ capital in “risk free” T-bills. Long only? Too risky so I’ll leave the bond bubble to others. Choose SAFER alternatives.

Seek alpha or bet on beta? Why does most financial advice fixate on how much to allocate to various betas? The more “risk averse” the more in bonds? Is it sensible to maintain the same static allocation at 1% yields as when they paid 10%? Can opportunity cost, interest rate and default risk be ignored with coupons so low and borrowing so high? There are NO risk free bonds but at least higher yields delivered the fixed-income on which many individuals and institutions depend. Financial regulation has as much chance of preventing the NEXT crash as ordering the ocean to stop rogue waves. Get sunk AGAIN or benefit from them?

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