Gary Allen on Business – Sunday, February 26, 2017 – Podcast Now Available

“The Big Bet” With Warren Buffett

Each year, Warren Buffett provides a fabulous read when he releases his annual letter to shareholders. That annual letter is filled with information about Berkshire Hathaway, but the more interesting sections for many folks are the investment stories and anecdotes from the so-called sage of Omaha

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In the 2016 edition, one of the primary stories deals with Buffett’s challenge to active management. Nine years ago Buffett made a public bet of $500,000 stating that the S&P 500 would beat the cumulative or average returns of the hedge fund industry over a ten year period of time. Only one fund manager was willing to come forward and take the bet.

The bet is now heading into its final year with hedge funds trailing very badly. At this point, the S&P 500 and Buffett’s charity stand to win the big bet.

On the program this week, I spend time going through the story, the results and in Buffett’s own words the multiple problems of active management. It is a cautionary tale worth the time.

Here is a link for you if you would like to read the entire Berkshire Hathaway annual letter to shareholders.   Berkshire Hathaway Annual Shareholder Letter

The Problems With Hedge FundsCost increase concept.

Later in the program I speak about my own concerns with hedge funds. Ultimately, I don’t think hedge funds are a good investment or bet for most people. The cost structure, the lack of transparency and the lack of liquidity are major stumbling blocks in my opinion.

Based on what I have seen over the years, most people would be better off in much simpler, low cost, liquid and transparent investments. Less is often more in the investment world. That rings true to me with costs.

I hope you enjoy the podcast this week.

All the best – Gary

CONTACT INFORMATION

Do you have a question for Gary? Do you need help with your investments? The best way to reach Gary is by emailing him at gallen@prudentllc.com.

The Podcast

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Gary Allen on Business: New Podcast Available – Sunday, February 19, 2017

The Story of the Pencil and More

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Segment 1

How can the story of a simple pencil provide someone with an understanding of financial markets? Find out in the first segment of my program. It is an interesting story about knowledge, experience, pricing and human ingenuity.

You can read the short paper on the pencil by economist Leonard Read here:   The Pencil Essay

Segment 2

In this segment I cover some of the basics regarding the new 529 ABLE programs that are springing up around the country. 529 ABLE accounts represent a revolutionary way for disabled people to manage their finances. If you have not heard of 529 ABLE accounts you need to. Listen to this segment to get a quick overview of the new program and how it can fundamentally change the financial life of a disabled person. 

In the segmemiable-logont, I mention the State of Michigan’s new 529 ABLE program. My firm is the investment manager and investment advisor associated with that program. The program is a federal program, which means it is available to anyone that lives in the Unites States. You do not have to be a resident of Michigan to enjoy the benefits of the program.

If you would like more information on the Michigan 529 ABLE program you can visit there website at: Michigan 529 ABLE Savings Program

Segment 3

modern and historic architecture at college campusThe cost of higher learning (college) continues to skyrocket. In this segment, I spend a few minutes talking about the cost and how to plan for it. This is a high level look at the challenge parents face and how to approach this liability from a logical perspective. Ultimately, the answer is save as much as you can early, invest it aggressively, and then transition into lower risk (as measured by volatility) as college approaches. This is not personal advice, just a formula to consider for new parents. 

Segment 4

In the final segment, I spend time explaining the overarching formula of financial life. The trade-off between spending and saving… and the role of human capital and financial capital. Finally, near the end of the program, I provide an explanation of stocks and bonds. What they represent and what you should expect. 

I hope you enjoy the program!

Gary

CONTACT INFORMATION

If you would like to contact Gary, the best way is through this form.

You can also reach Gary via his work email at gallen@prudentllc.com.

 

PODCAST – Gary Allen on Business: Original air date – Sunday, February 19, 2017

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