Variable Annuities: Death Pay

So here's a new scheme that may seem morbid, but actually works: Investors Recruit Terminally Ill to Outwit Insurers on Annuities (from WSJ)

In short, the investor pays the terminally ill to enter a V.A. (i.e. $2,000) and then the investor puts $1,000,000 into the annuity, which pays the beneficiary after the terminally ill person passes away. Worse case scenario the investor loses $2,000, best case is infinity return, as the VA is guaranteed to pay the initial $1MM at the time of death.

Wall Street meets The Strip?

Article about sports betting and bond market techniques, and how they are coming together to form live sports beting using bond market risk management techniques.


Cantor Fitzgerald Takes Wall Street Trading Software to Las Vegas - WSJ.com

University Endowment Losses

CNBC had a list of the Largest 2009 Endowment Losses (out of the 250 largest universities):

15. Principia College: -28% ($206 MM)

14. Univesity of St. Thomas : -28.16% ($98.8 MM)

13. Florida State Univesity: -28.22% ($161 MM)

12. Yale Univesrity: -28.6% ($6.5 B)

11. Fuller Theological Seminary: -29.1% ($123 MM)

10. Carnegie Mellon: -29.4% ($313 MM)

9. Harvard Univesity: -29.8% ($10.9 B)

8. Farnklin W. Olin College: -30% ($141 MM)

7. Bates College: -31.2% ($83 MM)

6. Samford University: -31.22% ($96 MM)

5. Ithaca College: -31.7% ($75 MM)

4. Regent Univesrity: -31.9% ($87 MM)

3. Baylor College of Medicine: -33% ($360 MM)

2. Syracuse University: -33.2% ($327 MM)

1. Haverford College: -35.5% ($185 MM)


As a Portfolio Manager, this makes me feel good about what we are doing. In 2009, we had a great market rally, and even the smartest of people predicted it was going the other way. In 2009, none of our portfolios that we run lost money, yet these teams were losing 1/3 of theirs.

Regulations

This from the Upside Trader:

"Maybe oil companies are next because they make too much loot or maybe some of the food companies will get levied because they are putting too many chocolate chips in their cookies. The markets hate regulation of any kind, they especially hate regulation on a sector that we just threw hundreds of billions at to try and save and then months later try and tear down. Counter intuitive at best. It causes confusion, markets hate confusion."

The January Indicator

This is a chart of the January indicator. This theory hypothesizes that when January finishes in positive territory, and vice versa. I do not buy into this theory whatsoever as there are many other factors that drive markets. If you look back at the last 10 years 6 time the theory has held true, 4 times it hasn't. Now looking back further, it seems as though it is right more often, but I think it is wise to only consider the recent pieces of data, as those are the economic conditions most similar to ours today.