1. Larry MacDonald pointed to some interesting articles including a brilliant piece by Eliot Spitzer on CEO pay. Companies are supposed to be controlled by their shareholders. CEOs are employees. A company’s board of directors is supposed to represent the interests of the shareholders. However, CEOs have too much control over who serves on their boards of directors, and they also have too much control over the choice of compensation consultants who make recommendations on CEO pay. It’s time that we fixed the system to represent shareholder interest rather than continue to complain about unethical CEOs. Who among us wouldn’t line our own pockets with millions of dollars if we could do so legally? This doesn't excuse CEOs, but the solution is to take away their opportunity to line their pockets unfairly.
2. A guest post by Neal Frankle explains why the 10-year returns of mutual funds are going to start looking very bad. Obviously, recent poor stock market returns are a big factor, but some past good returns are about to drop off the 10-year record as well. Even if you’re smart enough to find funds with low expenses, your mutual funds’ return history will make you look foolish in the eyes of those who pay attention to past performance.
3. Rob Carrick discusses the possibility that mutual funds will increase their fees to make up for having less money to manage. Now that they have lost so much investor money, mutual funds will collect smaller fees if the MER percentage remains the same. MERs would have to rise for the funds to maintain their revenues.
4. Patrick has some strong opinions about the auto bailout plans.
5. Canadian Capitalist draws some lessons from Japanese stocks. It sounds like he is making a case for market timing in special circumstances where a bubble causes valuations to get out of control. Of course, the existence of a bubble depends on most people not recognizing that it is a bubble. Nobody said that investing is easy.
6. Big Cajun Man points us to an amusing cartoon about the Mississippi bubble. It seems that financial bubbles aren’t just a modern phenomenon.
7. Million Dollar Journey had a guest post by Kathryn on the cost of dog ownership. This should be an eye-opener for anyone whose ideas of pet costs are a decade or more old.
8. Preet explains the advantages and disadvantages of a dividend capture strategy.