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Investor Cookbooks wrote a new blog post titled Tax Cut & Jobs Act creates winners and losers
The Tax Cuts And Jobs Act has created winners and losers - sometimes on the same team.  Take Sally Beauty Holdings (ticker: SBH).  This is a company whose 37% tax rate should fall to 23% under the new law.  This should boost their after-tax profits by roughly 25% or $50 million.However, much of SBH’s rural sales reps will be on the losing side of the new tax law.  A typical SBH traveling sales rep might earn $55,000 per year, but will incur $20,000 in unreimbursed travel expenses.  Thus, this rep really only earns $35,000 per year. Under the old tax code, the...
592 days ago
Investor Cookbooks wrote a new blog post titled NCRS Pension and Treasurer Folwell
Bottom line: NC Treasurer Dale Folwell is headed in the right direction. But, progress is never a straight line.  Treasurer Folwell impressed me by freezing new commitments to alternative investments.  He further impressed me by quickly firing a dozen active equity managers. But, I was disappointed that the $7 Billion of equities was liquidated instead of being transferred to index managers.  This lowered the equity exposure of the pension portfolio from 44% to 37% at a time that equities rose 10-15%. However, to be fair, the self-described longterm target allocation to...
663 days ago
Investor Cookbooks wrote a new blog post titled Picking Stocks is Hard, Picking Mutual Funds is Harder
Princeton Economist Burton Malkiel, author of "A Random Walk Down Wall Street" famously pointed out, “If picking stocks is a random walk down Wall Street, picking mutual funds is an obstacle course through Hell’s Kitchen."The editors of Kiplinger's personal finance magazine have validated that statement.  Kiplinger's regularly publish "The Kiplinger 25" - a list of Kiplinger's favorite mutual funds.  I dug up a 10-year-old Kiplinger's magazine from January 2007 and analyzed the 10-year-old Kiplinger 25 with the help of Morningstar. Here's what I...
901 days ago
Investor Cookbooks wrote a new blog post titled Nevada Does Not Gamble With Their Public Pension
The Wall Street Journal recently ran an article about the Nevada Public Employee Retirement System pension investments.  The entire pension investments are managed by one single person who invests 100% in passive index funds.  The entire investment process costs a paltry $18 million per year.  Compare that to North Carolina's annual costs of $595 million per year (see page 10). Now compare the investment results ending June 30, 2016:           NV           NC 1-year 2.3% 0.8% 3-year 7.8% 6.1% 5-year 7.7%...
946 days ago
Investor Cookbooks wrote a new blog post titled 42 Years of NC Pension Investment Returns
There has been a lot of hand wringing over the North Carolina Retirement System Pension Fund investment returns - as well there should be.  As I've documented previously on this blog, the returns could have been substantially higher had Richard Moore and Janet Cowell not squandered billions on a failed foray into alternative investments. In Treasurer Cowell's most recent investment performance report, the pension earned an annualized return of just 5.8% per year over the last 15 years ending 6/30/2016.  This return is far below the actuarial assumed rate of return of 7.25%....
946 days ago
Investor Cookbooks wrote a new blog post titled North Carolina Pension Fund Sure Misses Harlan Boyles
Last week North Carolina State Treasurer Janet Cowell posted the Government Investment Operations Report for the North Carolina Retirement System Pension Fund for the fiscal year ending June 30, 2016.  The report says the treasurer spent $595 Million managing the $87 Billion pension fund investment portfolio.  That's up from just $57 Million when the pension was $59 Billion when Harlan Boyles retired in 2000. NC Retirement System Pension Fund 2000 2008 2016 Harlan Richard Janet Boyles Moore...
946 days ago
Investor Cookbooks wrote a new blog post titled Index Fund Returns Crush North Carolina Pension Returns (Again)
North Carolina Treasurer Janet Cowell recently released investment returns for the state pension fund.  The press release touted the returns as being slightly better than average over the past 5 years (45th percentile).  However, it is important to keep in mind that the NC pension fund fails to beat a simple mix of low-cost Vanguard index funds.The table below shows the annualized returns of the NC pension fund compared to a simple portfolio of 5 Vanguard index mutual funds. Annualized Investment Returns as of 6/30/2016 North Vanguard Carolina...
946 days ago
Investor Cookbooks wrote a new blog post titled Payroll Adjustment Calculator and Take Home Pay Estimator
It's tax season and many folks will realize they are getting a huge refund.  While this might be considered good news, it also means you've given the government an interest free loan all year.  Alternatively, perhaps you discover you underpaid your taxes during the year and find you even owe a penalty for underpaying during the year.  Click here for a handy payroll adjustment calculator.  Grab your latest pay stub and use this tool to help figure out what changes you need to make to your tax withholding.  If your pay stub does not include information about the...
1689 days ago
Investor Cookbooks wrote a new blog post titled The Key to Lower Healthcare Costs
The key to lower healthcare costs is high-deductible health insurance plans combined with websites like this one--> (click here).  The cost-sharing aspects of high-deductible health insurance plans like those attached to healthcare savings accounts (HSA) encourage patients to shop around for the best care at the best price for non-emergency care.  The website above shines a light on certain hospitals and doctors that charge more than twice what similar hospitals and doctors charge for similar care.  I'd like to see the website above add patient reviews.  Reviews...
1698 days ago
Investor Cookbooks wrote a new blog post titled Historical Asset Class Returns 2014
Here's the latest historical asset class returns chart ending 2014.  Overall, a terrific year for investors with all but one asset class rising (I don't consider commodities an investment asset class).It is funny how the financial markets can make smart people do really stupid things.  The top performing asset class in 2014 was long-term bonds which rose nearly 20% in 2014.  In fact, US Treasury bonds with maturities longer than 20 years rose nearly 30% in 2014! This must come as a nasty a surprise, to the North Carolina State Treasurer who sold billions of dollars of bonds just...
1720 days ago
Investor Cookbooks wrote a new blog post titled How to Win at Investing
Below are links to short clips of a fantastic documentary called "How to Win the Losers Game." The documentary, produced by Sensible Investing, basically tells you the nasty truths about investing, but also tells you the very best way to go about investing.  Much of the documentary is focused on the United Kingdom, but most of the data and statistics hold true here in the United States as well the rest of the world.  Regardless of where you live and invest, regardless of your age, EVERYONE should watch these video clips.  In a nutshell, the lowest cost investment strategy will...
1785 days ago
Investor Cookbooks wrote a new blog post titled The Self-Employed Should Open a Solo 401(k)
I ran some calculations on a self-employed retirement calculator, and as the chart below clearly shows, the Solo 401(k) is a superior retirement plan for the self-employed regardless of income level.  The Solo 401(k) allows self-employed individuals to put more money into a tax-advantaged account while reducing taxable income better than any other retirement vehicle.  The one advantage the SEP IRA has, is that it can be opened AFTER the tax year has ended.  A SEP IRA can be created as late as April 15th (or as late as October 15th if you extend your tax return) for the previous...
1796 days ago
Investor Cookbooks wrote a new blog post titled Finance Clippings: Fantastic investigative report into alternatives i...
Finance Clippings: Fantastic investigative report into alternatives i...: Investigative reporting at its best, done by Tom Bullock of WFAE 90.7 - public radio in Charlotte. It's in two parts.  Well worth listening to.
1849 days ago
Investor Cookbooks wrote a new blog post titled Bravo NC Treasurer Cowell! (Yeah, I said it.)
     I was hopeful when the State Employees Association of North Carolina (SEANC) turned up the heat on North Carolina State Treasurer Janet Cowell to make changes to the North Carolina Retirement System (NCRS) pension investment operations and reporting by hiring professional pension investigator Ted Siedle and his firm Benchmark Alert.  I was hopeful when Treasurer Cowell announced the formation of the Investment Fiduciary Governance Commission to evaluate the State Treasurer's management of the NCRS.  I was hopeful when Treasurer Cowell's Governance Commission issued recommended...
1934 days ago
Investor Cookbooks wrote a new blog post titled Jon Stewart holds his own with Tim Geithner
If you are a student of the 2008 financial crisis, this extended interview debate between Jon Stewart and Tim Geithner is worth a watch. Stewart surprised me - he really knows quite a lot about the crisis.
1946 days ago
Investor Cookbooks wrote a new blog post titled SEC: 50% of Private Equity Firms Steal from their Clients
Andrew Bowden, the Director of Compliance Inspections and Examinations recently gave a speech entitled, "Spreading Sunshine on Private Equity."  If you click on the link and read the transcript from Bowden's speech, you would have to wonder why anyone would ever give their money to a private equity fund ever again.  Bowden's speech should be required reading for all pension fund managers.  What follows is a quote from Bowden's speech:"When we have examined how fees and expenses are handled by advisers to private equity funds, we have identified what we believe are violations of...
1954 days ago
Investor Cookbooks wrote a new blog post titled Finance Clippings: How much does the NC Pension Fund pay hedge fund a...
Finance Clippings: How much does the NC Pension Fund pay hedge fund a...: The answer is hard to figure out.  While the pension fund will disclose (reluctantly) the fees paid directly to managers - in many cases tho...
2026 days ago
Investor Cookbooks wrote a new blog post titled Politics Already at Play Within North Carolina Pension
What follows was my letter to the editor of the Raleigh News & Observer that was published on page 2 of the Work & Money Section of Sunday's paper on 2/2/2014.  My letter was a response to Andrew Silton's column from the prior Sunday's News & Observer. Mr. Silton’s Jan. 26th column, “Keep politics out of pensions” was sparse on facts.  I’d like to add some.The last annual report issued by Treasurer Cowell shows the state pension funding status to have fallen from 112.8% in 2000 to just 94% now.  That is to say, it is 6% UNDER-funded.  That’s roughly a $4 billion...
2055 days ago
Investor Cookbooks wrote a new blog post titled A Suggestion for the new NCRS Investment Fiduciary Governance Commission
To the North Carolina Retirement System (NCRS) Investment Fiduciary Governance Committee:I applaud Treasurer Cowell in creating your committee and look forward to hearing your recommendations.  I wanted to share my thoughts.  I see no reason to start from scratch, but perhaps it might be best to essentially copy another state plan that seems to perform well with great transparency. The Minnesota State Retirement System (MSRS) and the Minnesota State Board of Investments (MSBI) could serve as a model for what North Carolina Retirement System should aspire to emulate....
2058 days ago