A roundup of what The Globe and Mail's market strategist Scott Barlow is reading this morning on the World Wide Web.
According to author and investor James O'Shaughnessy, mammoth asset management firm Fidelity Investments studied all of its client accounts in search of which investing styles were the most successful. The conclusions confirm even the worst fears about average investor returns – the Fidelity accounts that did best were the ones where the investor forgot they had an account with Fidelity.
The two main takeaways from this: One, almost all of us stink at making investing decisions; Two, we should all apply the famous medical maxim – "first, do no harm" – when it comes to our portfolios. If negligence is the path to investing riches, the fewer investment decisions, the better.
"Fidelity reviewed which investors did best and what they found was hilarious" – Business Insider
The Financial Times' Alphaville blog's Matthew C. Klein presented a Reserve Bank of Australia chart yesterday proving that, if I were asked to guess the fastest-growing developed world economies over the past 10 years, I would have been almost completely wrong.
The chart showing per capita inflation-adjusted gross domestic product growth shows Australia in the lead (I might have gotten that right) but then the surprises begin. For Canadians, the stunner is that Japan's economy has actually grown faster than ours.
"Real GDP per capita growth over the past 10 years: not what you'd think" – FT Alphaville (registration required)
Commodity trading firm Glencore Xstrata PLC is arguing that the commodity super cycle is not over, it's just being suffocated by excess production. Glencore CEO Ivan Glasenberg goes on to warn about an imminent correction in mining stocks:
"A tsunami of fresh seaborne [iron ore] supply has hit the water this year, driving the price of the key steelmaking ingredient down by 37 per cent to a five-year low… However, this has yet to be reflected in the share prices of the big three global iron ore suppliers… Over the past three months, shares in BHP [Billiton] have gained 0.8 per cent, Rio Tinto had risen more than 4 per cent while Vale is down just 1.3 per cent."
"Miners' shares lag behind iron ore price plunge" – Financial Times
Kevin Ferry, futures trader and co-founder of Cronus Futures Management, brings up a terrifying prospect – the hacking of financial networks will eventually threaten the stability of the banking system.
He writes, "the banking system and the exchanges are under constant and systemic sophisticated attack. A fiat system sits on a foundation of faith. Behind the scenes, balances are reduced by hackers and magically replaced by insiders. The biggest offender is the Fed… One day, impossible to say when, a breach will occur big enough to shake the US consumption machine."
"Black swan rising" – Ferry, Contrarian Corner
Tweet of the day from @b_judah: "I felt honestly those who emigrated after Putin crushed the opposition were alarmist. Now I see they were merely better informed."
Diversion: Grantland profiled the late, great comedic genius Phil Hartman and I can't recommend it highly enough.
"The Glue" – Grantland
Follow Scott Barlow on Twitter @SBarlow_ROB
Scott Barlow