index funds book

I’m trying to understand investing, picked up a book on index funds, and now I’m doing web research. (in short: index funds premise is ‘passive’ management… you invest in the S&P 500 and expect that over 10 years your investment will outgain an ‘actively’ managed portfolio because your financial adviser a) cannot consistently pick winners and b) financial advisers make money by churning… getting you to sell this and buy that, in addition to their ‘management’ fees. So what’s *really* true? Gotta find both sides of the argument right?

Index Fund Critics

Fool.com on S&P 500 — excerpt: “(Psst. There’s a reason that all these magazines don’t tell you how simple mutual fund investing really is. Scientific marketing surveys and focus group testing have determined that magazines with covers that read “Index Funds: Still The Best Choice!!!” every single month really wouldn’t sell as well as magazines that promise “Our BRAND NEW 10 Best Mutual Funds To Buy RIGHT NOW!” Sad, but true.)”

Anyone else have an opinion?

Presentations on Flash and Flash Communications Server

Couple guys from Macromedia came by today to give us (and some Acushnet guys) a presentation on Flash and Flash Communications Server, saw some really really interesting apps… one of the more interesting was an ‘environment’ in which you can post notes, chat, and leave video. Check out Dream Domain sometime. I’m not even sure that I understand what’s going on, but the interface is amazing.

Butterfly Economics

Finished “Butterfly Economics” tonight. This book was like going back to school, only more intense. Part calculus, part linear algebra, part business management, and part economics, it’s central tenet is that conventional economics (the ecnonomics you and I were taught in school) is wrong in viewing “… the economy and society as a machine, whose behaviour, no matter how complicated, is ultimately predictable and controllable.”

What random things will I take away from reading this book?

Model building: Academic economists spend their large portions of their careers building models to explain or prove theories. Turns out there are multiple ways of building models to solve problems: multi-variate and uni-variate, which I’ll have to remember sometime to research. The guts of the book hinge on a model that describes the movements of ants (very little mention of butterflies for you Lepidopterists out there) between two equally distant and equally attractive (as far as ants are concerned) food piles.

Empirical Data: Much of the research in this book wasn’t possible until the early 1980’s which brought cheap computer power to the masses. Many economic theorems just couldn’t be tested empircally because they were too large for computers or the human mind to calculate.

Interacting Agents: “Once we admit the possibility that individual tastes and behaviour can be influenced directly by those of others, gaining a lead on rivals can create a virtuous circle in which the market position of a company or brand becomes stronger simply because it is already seen to be popular.”

Great book!

Karensrecipes.com

Thanks for the plug Mike! If any of you notice a peculiar resemblance between the design of Karensrecipes.com and allrecipes.com, well… they stole it from me. 🙂 Actually, I created karensrecipes.com as an exercise to learn more Java, specifically servlets, JavaBeans, and JSP tags, but not as a design exercise, which is why I admit that the design is a complete theft. I learned alot… but not enough. I’m currently working on v2 of the site (which has a completely new look).

Now with 50% less caffeine!