August 2012

David Rubenstein totally missed the chance to buy into Facebook at its initial value

Rubenstein even mentioned that this was his biggest investment regret.

David Rubenstein is a kingpin in the world of private equity as a co-founder of The Carlyle Group. Rubenstein is significantly involved with the Harvard Business School and during one of his remarks at the school he compared private equity to sex to describe the buyout bubble.

Still, Rubenstein is a very careful investor and even so has made a few decisions that he regrets. A very important deal that he missed was to be one of the first investors in the social networking giant Facebook. Rubenstein's now son-in-law was a classmate of Mark Zuckerberg at the Philips Exeter Academy.

DealBook - 'The Deal I Missed': David Rubenstein

Buying rental property

How does it compare to investing in Apple?

I have always wanted to explore the investment idea of buying rental property on this blog. First of all, investing in just one stock is not a prudent thing to do. Obviously, you want to look at ETFs  and the Vanguard Total Stock Market ETF is one I would recommend. Another ETF you might want to consider is the iShares Morningstar Large Growth Index. 

But getting back to buying rental property, I suppose this is really for the privileged few readers of this blog. Buying rental property is not an easy investment by any means. There are many things to consider and the most important is whether your outlook is that of a landlord. This will determine how close the rental property will have to be to your residence or whether you should hire a management company.

The search for dividend paying stocks

This is what most investors in the stock market start out looking for.

The stock market is not an attractive place to make money as the junk bond market. But there is something about dividend-paying stocks that will always make them an attractive investment. The key, however, is to spot trends that are happening now and to recognize that industries are changing.

It was thought that tech stocks were mainly growth stocks that invested in themselves rather than paying out dividends. But, a look at the S&P 500 dividends payouts reveals that tech stocks have paid out a lot of dividends and are only second place to the consumer-staples industry.

The Paul Ryan budget proposal

Recent media hype

Paul Ryan has gotten a lot of heat about his budget proposal and his open criticism of President Obama’s budget back in 2009. But is this denigration of Paul Ryan’s budget really all that fair? I mean the Congressman from Wisconsin did double major in economics and political science at Miami University in Ohio. Furthermore, the death of his father forced him to introspect and it was during this period in his youth that he read books by Milton Friedman, Ludwig von Mises and Friedrich Hayek.

Even so, he has been heavily criticized by the Nobel Prize winning economist Paul Krugman. Krugman has remarked in many of his blog posts and appearances on TV that the Paul Ryan budget should not be taken seriously. This is especially so given Paul Ryan’s record during the presidency of George W. Bush that saw the budget deficit balloon to five trillion dollars.

Marrying for love or money?

The whole concept of love marriages are quite a recent phenomenon

Through close examination of the past and I am talking about history, marriage was actually a concept that was created for strategic alliances, economic benefits and to maintain family ties.

They say that women marry for money. Is this really true? Let’s say it is. Don’t you think it is the right approach because even when we fall in love, we tend to stay attracted based on certain common interests and shared goals in life and career choices.

Facebook stock price has now plunged to $19

Does the social networking giant need a traditional CEO?

About three years ago, there was a lot of media buzz about the biggest IPO that would take place involving Facebook. But right now, Facebook stock performance has been anything but epic. The stock price hit an all-time low on Friday when it finished trading at $19 a share.

Shareholders are not very happy about the stock’s performance because it did not even give the return they expected on its first day of trading. Usually, for a big IPO such as this, investors can expect the share price to rise considerably in the first few days. This did not happen on May 18 when Facebook’s stock price started trading at $42.05 and did not have that big first-day pop.

Why do we feel out of control?

This is about tackling those core beliefs that affect our happiness and well-being.

I talked about the macroeconomic problems of debt in last week's post and now we get back to how to reduce debt at the level of the individual. I know the feeling that we all want to have. That is to be able to do what you want whenever you want.

But before we get to that, we have to tackle come questions and see where we stand and how to do little things to move mountains. If you wanted to move to New York City/San Francisco in six months, would it be possible? If a medical bill or other unexpected expense of $5000 came up, would you be able to pay it calmly? Are you able to set aside time and money for your hobbies and interests?

Former Googlers come up with a way to invest in people

Upstart is the name of the company

We have all heard of Kickstarter and now we have Upstart. But Kickstarter is more about investing in ideas or projects that people come up with, whereas Upstart invests in the people themselves. Dave Girouard has come up with this revolutionary idea of Upstart after being the President of Google Enterprises.

Most of the architects behind Upstart used to work at Google and there are also those that worked in top management in tech stars such as YouTube and PayPal. These founders are hoping to give young people in general the entrepreneurial and cutting-edge experience that they have become so used to at Google and the other tech giants.

Investors in the stock market love President Obama

The Obama presidency has seen the best stock market performance since World War II

I have already posted on basketball talk about a fundraiser for President Obama. Now it is this stock fest blog that is also going to embrace the upcoming presidential elections. People will always disagree about the presidency of Barack Obama, but if you ask any stock investor they will be raving about his years as the country's CEO. Will this be a difference maker in November?

President Obama has tooted his horn on this matter and recommended investors with a long-term perspective to go ahead and buy stocks which they feel might be a good deal after having done research on them.

When looking at the performance of the stock market, it just goes to show that the U.S. economy has definitely improved since the recession. Additionally, the stock market is a sign of things to come and if it continues to do well it bodes only good things for the future of this country’s economy.

The Joy of Failure: How to Fail Your Way to the Top by Wayne Allyn Root

Must-read book from a charismatic personality.

With so much talk about Mitt Romney’s tax returns and President Obama’s college transcripts, I wanted to talk here about a book written by Obama’s classmate at Columbia. But the funny thing is that Wayne Allyn Root claims that he has never met Obama when he was on campus at Morningside Heights and has also never met anyone who met the “The Anointed One.”

This may have something to do with the fact that Obama was a transfer student and lived off-campus. But all political talk aside, the book is really a must-read for anyone who has sights set high in business. There are seven principles in this book that the reader must take note off.

Derivate losses affect Berkshire Hathaway profit

The last quarter saw almost $700 million in losses for Berkshire Hathaway

The hot stock news this week involves Berkshire Hathaway. But even though it is such hot stock news right now, there should definitely not be anything to worry about because Warren Buffett always has a long term perspective. The derivative bet that led to almost $700M in losses for Berkshire Hathaway was one large one that was tied to the performance of the stock market.

Buffett is still optimistic about the bet and expects it to become profitable as time goes by. Although, Berkshire Hathaway reported this seemingly large loss, the operating income increased greatly and actually set records. Furthermore, Berkshire Hathaway has more cash on hand as its cash pile went up to $40.66 billion, which was an increase of $3 billion since the start of 2012.

Japan Air will get an $8.5 billion cash infusion in next month's IPO

Overseas business

Going with last week's tax havens theme, I am going to look at some international business news so that readers will not just be exposed to what is happening here in the United States. This is actually the second biggest IPO in 2012. It is remarkable because it is going to shift Japan from bankruptcy to the globe's most profitable airline, all in a period of two years.

There have been some cutbacks made by Japan Air to ensure that the shareholders get their return and especially the Japanese government that invested heavily in the carrier. The number of routes have been reduced and a lot of the corporate issues have been sorted out. When looking at market value after the IPO, Japan Air is set to become the fourth largest airline.

What is holding back economic recovery?

Excessive debt, I guess.

The economy is continuing to be depressed and this is for a valid economic reason many economists agree. The reason is that with all the negative news and the excess debt that is hanging around, people are just not willing to spend much anymore. But I think we cannot really blame President Obama for all this.

It is really the partisan politics that have separated this country and made the United States go into further debt. Every time the President has tried to do something, he has been faced with opposition by the Republicans. This is fair because Democrats and Republicans will never fully agree on everything.

How to become a pro at risk management

A great website that I came across.

If you have been reading this blog for some time or even if something here caught your attention, I suppose you're serious about investing and investments. That’s good.

Now when it comes to investing, there is risk management that is a critical part. The website I am going to refer you to is The Bionic Turtle. It is pretty good for you investment and finance folks out there because it not only has some great information about risk management, but also about the CFA and the FRM exam.

I guess if you’re into investment, you probably may have heard of the website already. But here is the link anyway so that you can head over there to get a free membership.