Weekend reading

Good reads from around the Web.

The best article I read this week was 6 Harsh Truths That Will Make You A Better Person on Cracked.com.

It’s full of swearing and aimed at under-sexed 20-something males. You’ll either love it or hate it. I wish I’d written it.

I also really enjoyed a podcast interview on The Motley Fool with ex-hedge fund manager Jim Rogers – particularly his career advice for kids thinking of getting rich in The City:

Jim Rogers: We’ve had long periods in history when the financial types were the masters of the universe, followed by long periods when the producers of real goods were the masters, and then followed again by the financial types.

I was a student at Oxford once upon a time, and when I was at Oxford in the Sixties, my professors used to say to me, what’s wrong with you? Why are you so interested in the stock market? It’s not relevant to anything, including the world economy or the English economy, and they just thought I was very peculiar, and I was, I guess.

So in the Fifties, Sixties and Seventies, Wall Street and the City of London were backwaters, serious backwaters. A big day on the New York Stock Exchange when I first went there in the mid-Sixties was three million shares. I mean, nowadays three million shares is not even one trade – that’s an odd lot, almost. So then we had the big bull market, and now every kid at Oxford wants to start a hedge fund in his dorm room – it’s totally changed.

But those days are ending, as far as I’m concerned. Finance now has huge competition. In 1958, America graduated 5,000 MBAs; the rest of the world graduated none. Now last year, America produced a couple of hundred thousand MBAs; the rest of the world, tens of thousands more. So you have staggering competition now which you didn’t have before. You have huge leverage, I mean all the financial institutions are very, very leveraged now, and you have governments all over the world coming down hard against financial types. Nobody likes us any more – taxes, regulations, controls.

At the same time, in America, the average age of farmers is 58. In the UK, the highest rate of suicide is in agriculture, because it’s a terrible business. The average age of farmers in Japan is 66; in Australia, it’s 58. I can go on and on.

In America, more kids study public relations than study agriculture, so the farmers are all dying and retiring, there are no young people going into the business. Farming’s been a terrible business for 30 years; finance has been the height for 30 years.

It doesn’t take much for me anyway to figure out, I’d rather be a farmer than an investment banker in 2018.

Is he right? Who knows, but it’s a provocative line of thinking.

I have my doubts that the financial sector has been squished down to size, but Rogers has an admirable habit of being ready to invert the status quo. And unless most of the new billions being born are going to eat algae grown in vats (they might) then we certainly need to grow a lot more food.

In his book Adventure Capitalist, Rogers writes: “While I have never patronized a prostitute, I know that one can learn more about a country from speaking to the madam of a brothel or a black marketeer than from meeting a foreign minister.”

That’s the spirit! As I always say, most people are going to come a-cropper trying to invest actively, and will be far better off in passive funds. But if you’re going to get neck deep in the markets you’d better enjoy it – it could be an expensive hobby, after all – and Rogers clearly relishes it.

I would certainly take anything he – or any other pundit – says with a wheelbarrow of salt. (See this old article from Fortune for more).

However it’s surely better than listening to this guy.

Merry Christmas to all our readers, whether you’re passive, active, old, young, rich or poor, or like me a bit of all of the above!

From the blogs

Making good use of the things that we find…

Passive investing

Active investing

Other articles

Product of the week: Emergency! You forgot someone’s present! There’s still time to email them a digital Christmas gift card from Amazon. Everyone likes money.

Mainstream media money

Note: Some links are to Google search results – these enable you to click through to read without you being a paid subscriber.

Passive investing

Active investing

  • Apple is the cheapest $500 billion company ever – Forbes
  • Hedge fund redemptions jump after lackluster year – Reuters
  • [No wonder…] Rich managers, poor clients – The Economist
  • Bill Ackman’s awesome Herbalife short slides – Business Insider

Other stuff worth reading

  • 2012 review: Pensions pain and promise [Search result]FT
  • 2012 review: Property is unmoved [Search result]FT
  • Savvy supermarket Christmas shoppers – Telegraph
  • Last minute Christmas gift bargains – Guardian
  • Careful: Saving for an emerging could be self-defeating – Forbes
  • With bonds, do we have another bubble on our hands? – Time
  • Harvests and farmland: Unyielding – The Economist
  • Exploration is in humanity’s genes – National Geographic

Read of the week: While we seasonally spend to excess, some kids in Africa are reading books for the first time. A few are using Kindles, which shortcuts the need for infrastructure to get books out to them. Read more at Amazon, and learn about the Worldreader charity helping to make it happen.

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