CERF Blog

Ray Dalio is the founder of Bridgewater Partners (BWP), the largest hedge fund in the world.  He has recently published a book Principles in which he describes the work and life principles that have contributed to Bridgewater’s success.  The primary goal since the firm’s inception in 1975 was to be an “idea meritocracy” based on… Read more

Written by Matthew Fienup and Dan Hamilton The Bureau of Economic Analysis just released its Ventura County GDP data for 2016. Accompanying the 2016 number are revisions to GDP estimates for 2015 and 2014. The data on Ventura County economic activity was a punch to the gut for the entire CERF team. Ventura County’s economy… Read more

It is well known that one really good way to get extremely rich is to hold a large concentrated position, often as the founder, in the stock of a company that realizes extraordinary success.  Another way, generally viewed to be less reliable, is to win the lottery.  In a very interesting research report, finance professor… Read more

James Parry knew at a young age that he wanted to grow up to be a money manager.  It was during his undergraduate years at the University of Washington in Seattle, that the economics major first subscribed to the Financial Analysts Journal (FAJ), the flagship publication of the professional society for Chartered Financial Analysts (CFAs). … Read more

In a stunning memoir (Beer Money), Frances Stroh, the great-great-granddaughter of beer magnate Bernard Stroh, catalogs the collapse of the family business and family wealth in less than one generation.  The Stroh’s were one of the richest families in America as recently as the 1980s, worth $700 million according to Forbes Magazine.  Refusing to bring… Read more

Susan Gates, a long-time executive at the Federal Home Loan Mortgage Company (Freddie Mac), has written a riveting account (The Days of Slaughter) of her years at the company, leading up to and through the financial crisis of 2007-2008.  As you may recall, the two major Government Sponsored Entities (GSES) Freddie Mac and older and… Read more

A typical device used in designing company strategy when financial outcomes depend strongly on a market price is a so-called “hedge report” or “sensitivity report” that shows the change in profits or market value associated with a positive or negative change in the underlying market price (which is sometimes called a “risk factor”).    When portrayed… Read more

You may recall the movie Forrest Gump in which the title character, played by Tom Hanks, was a simple person who happened to have a ringside seat on many of the major events in American history in the 1950s through the 1970s.  Forrest may have had a low IQ, but he was extraordinarily successful –… Read more

In a recent essay (“Investment Advice for Ray Kurzweil”), I extolled the benefits of the “1% Ratchet Rule” under which a family would spend each year 1% of the high-water mark of family wealth.  The rationale for this rule is simply that it works for someone who plans to live forever, like Ray, or for… Read more

Previously published on December 16, 2016 in the California Economic Forecast publication. United States housing sales have been climbing since the recession, but are still relatively low. This is particularly true once the home sales are adjusted for population. Household formation has shown some signs of life lately, especially since early 2015. New home starts… Read more

Previously published on December 16, 2016 in the California Economic Forecast publication. The United Sates economy continues to grow at less than its potential. The 12-month moving average of job creation has been falling steadily since February 2015. In seven of the last eight quarters, investment growth has been negative or near zero. Productivity declined… Read more

The Financial Analyst Journal (FAJ) is a terrific publication put out by the CFA Institute.  This group also sponsors the Chartered Financial Analyst (CFA) designation.  In a recent issue (September/October 2016), a panel of leading financial experts (Professors Andrew Lo, Robert Merton, Stephen Ross, and Jeremy Siegal) discuss the future of finance and how it… Read more

Ray Kurzweil is a brilliant inventor and author and is currently Chief Scientist at Google.  He is known for many things, but perhaps most notably for the idea of the “Singularity.”  This is a time in the fairly near future, according to him anyway, when processing power of computers will have developed to the point… Read more

In 1693, as related by economist Moshe Milevsky in his book King William’s Tontine, King William of England (actually a Dutchman and formerly William of Orange) sold to investors an interesting financial product.  Each buyer was a member of a pool of buyers that immediately received a “dividend” on their investment of 10% per year. … Read more