Although I didn’t do the analysis myself, I read a report that the month-end ramp job, defined as the three days before the end of the quarter to the Thursday before the employment report, accounted for all the return in the market last year. During the jam-job period, for the first three months of 2005, the Nasdaq 100 is cumulatively up 3.2%, when the actual performance is down 8.1%.

A quote from Bill Fleckenstein worth recording:

“Isn’t it interesting that certain stocks comprising big proportions of popular mutual funds always manage to see large price changes a couple days before quarter-end. I’m sure that must just be a coincidence.

SEC: Wake Up & Smell the Mark-Up

I have complained about this practice publicly for going on 10 years now. It’s mind-boggling to me that it has not been stopped when it would be so easy to do so. I can’t understand why the SEC refuses to put an end to one of the greatest open secrets on Wall Street (with managing one’s earnings to beat the number being the second most open secret).”

Fleckenstein Capital

The mainstream press seems finally to have realized that real estate speculation is in the mania stage. Hence the following article from the Los Angeles Times. The bizarre personal note is that I know the lead interviewee, Chris Boome.

“SAN FRANCISCO — Chris Boome, an insurance agent in the suburb of Burlingame, doesn’t want to work the rest of his life. Who does? But at 58, Boome knows he hasn’t saved enough to retire. So a few weeks ago, he revamped his retirement accounts. He sold most of the mutual fund shares and used the cash to buy an $83,500 chunk of land in the Nevada hills, a stretch of ground he had seen only in a photograph. “This is more exciting than a mutual fund,” Boome said. “It feels safer too. You buy a piece of dirt, you feel you’ll always have a piece of dirt.”"

Putting Stock in Property

Here’s an excellent article from CBS Marketwatch by Paul O’Farrell, who points out the impact of fees on your retirement income. He observes that the combination of (even average) fund fees and adviser fees can reduce your potential income from your retirement assets by more than half. He suggests doing your own management and using low-cost index funds.

His basic point is that Wall Street’s advice isn’t worth what you pay for it. Good thing that few people notice this, or else the lavish lifestyles might be in jeopardy. Nobbling a few examples like Mr. Potato Head and Grasso is all very well, but it doesn’t get to the root of the problem which is the lack of real competition and transparency.

Earn 57% more in retirement