Trovena Weblog

Real Estate Applications

I don't know if you have been shopping for residential real estate lately, but if you have, and you aren't using the Zillow or Trulia mobile apps, you are missing out. (You may also be missing out on some great deals!)

Imagine pulling up in front of any home and instantly accessing photos, price history, comparable recent sales, and contact information. You can do that now on your phone as you cruise your favorite neighborhood. No more calls to realtors or printing sheets of information prior to your drive. It's all right at your fingertips. You can call the realtor after you've narrowed your search considerably.

You may also want to see what zillow.com and trulia.com have to say about your house. If any information is incorrect, you can "claim" your home and update the information. When it comes time to sell, you'll be glad you did it.

- Christopher

Home Buyers Check Out Apps

Smart-Phone Tools Use GPS Technology to Provide Local Housing Information

Just in time for the spring house-hunting season, smart-phone applications that provide information to home buyers are proliferating.

Real-estate firms have long vied to have the most engaging Web site to attract people searching for homes. Now they also feel compelled to have an "app" for Apple Inc.'s iPhone and other smart phones. Rather than being moneymakers—brokers tend to offer their apps for free—the apps are seen as a tool to make the home-buying process easier.

Read the rest at WSJ.com ...

The Lesson Learned

This is a nice article by Mr. Zweig who says that bubbles don't do much for investors but have latent benefits for the economy. The one thing I take from this is that the thing to do with any bubble asset (Be it tech stocks, real estate, or bonds perhaps) is to sell it using a systematic, disciplined re-balancing investment process. Simple as that. 

- Christopher

Ten years ago, investors knew that technology would change the world, and they were right. But you can be 100% right about the future and end up with zero to show for it if you overpay in the first place.

When Bubble Burst: Companies Won, Investors Lost

On March 10, 2000, the Nasdaq Composite index closed at a record of 5048.62, up 24% since the beginning of the year, after an 86

% gain in 1999. And many were calling for the Nasdaq to hit 6000 within a year or two.

It closed Tuesday at 2340.68.

What went wrong? Looking back with 20-20 hindsight, you might think that millions of investors had gone insane. Americans in every walk of life—barbers, taxi drivers, waiters, air-traffic controllers—were convinced that they could get rich quick by trading Internet stocks.

Read the full WSJ article "When the Bubble Burst" »

Clinton and Bush

San Diego partner Christopher Van Slyke gets the opportunity to meet both former Presidents at a Florida conference earlier this month!

Wall St. Out of the Gambling Closet

Well, many of you who know me have heard me say that Wall St. firms are really analogous to casinos. Like Vegas casinos, these firms (Merrill, Smith Barney, Goldman....etc.) don't really care if you make money.

They merely want you to take a bet so they can take a small piece of the action (on billions of transactions of course) After all, if gambling or stock picking worked, they would be sitting at terminal or card table with you taking their own advice.

Finally, they have taken off their disguises and are entering the casino fray in earnest...

- Christopher

Whether Bonds or Touchdowns, They're Still a Gamble
Firm Engineers Vegas Wedding Between Wall Street and Sports Betting

By ALEXANDRA BERZON

M Resort

The betting area at M Resort was designed to look like a trading floor.

LAS VEGAS—Investors are sometimes accused of treating the stock market like a casino. Now, one Wall Street firm wants to treat casinos like the stock market.

Bond-trading specialist Cantor Fitzgerald in March took over the management of sports betting at the M Resort, a new 390-room hotel and casino on the Strip's southern edge.

Read the full article here....

Trovena is featured in The Beach Reporter, a paper covering the Los Angeles communities of Manhattan Beach, Hermosa Beach, Redondo Beach and El Segundo.

Business Profile - Trovena by Jennifer Evans (Updated: Thursday, December 17, 2009 10:25 AM PST)

Scott Leonard, co-founder/owner of Trovena in Redondo Beach. (photo by Anita Manriquez) Since his high school days Scott Leonard, co-founder/owner of Trovena has been described as an entrepreneur. The Southern California native first started his own firm 12 years ago at the age of 28, but soon realized that in order to take his business to the next level and offer more comprehensive services, he needed to turn his individual firm into a business. Read the full TBR article "Business Profile - Trovena"

Buffett vs The Market: Which Worked Better During the Crisis?

I was reading the Journal this morning and while reading the article below, I had some thoughts. It's so fun to be able to look backward now at the 2008-9 crisis and see how various investment strategies performed. One such strategy is Warren Buffet-style active management where a "wizard" is chosen by the investor to use his powers of prognostication to "outwit" that dopey old market. The recent meltdown was a perfect chance for these wizards of active management and especially the king, Warren Buffett, to show his skills. The Journal takes a look at how he did starting at the beginning of 2008 through this week.

Unfortunately, they compare Berkshire Hathaway's performance to the Dow Jones Industrial Average which is an inappropriate benchmark. It's actually a bit unfair to Buffett in some ways. For example, he only took 62% of the market risk that an owner of the Dow took. Warren holds cash and bonds sometimes. Still, investors who simply held the Dow outperformed Warren by about 8% over this period.

A fairer comparison would be a broadly diversified passive portfolio that took about the same market risk such as DFA's Global 60/40 fund of funds mutual fund. (DGSIX) This passive (passive means no attempt is made to jump in and out of the market or individual stocks/bonds) mutual fund, which simply trusts the market to accurately price risk and adjust accordingly, trounced Mr. Buffet over this period by a total return of 18% while taking 60% market risk like Buffett. (The other 40% is in high quality bonds)

So why isn't the Journal writing about passive investment performance instead of this laggard? My guess is that it's pretty boring. Imagine the title:  "Market's Work Again, Investors Win." It's like saying there will be traffic in Los Angeles. Duh? This article is an interesting read because it's about a man's life. I think I'll trust markets and enjoy reading about Mr. Buffett's life separately.

-Christopher

In Year of Investing Dangerously, Buffett Looked 'Into the Abyss'

By SCOTT PATTERSON

Warren Buffett believes his best deals during the economy's biggest belly flop since the Crash of 1929 may well turn out to be the ones he didn't do.

Mr. Buffett slammed the door on one opportunity after another during the most harrowing stretch of his storied career. That impulse, he says, left him with the financial firepower he needed last month to strike the biggest deal he has ever done -- Berkshire Hathaway Inc.'s $26.3 billion purchase of railroad Burlington Northern Santa Fe Corp.

Read the full WSJ article "In Year of Investing Dangerously" »

Active Manager Survival

Here's a nice article on active manager failure written by Trovena advisor Charles Stanley.

-Christopher

Active Manager Survival

Posted using ShareThis

Individual Bonds...Not A Good Idea

I've always warned investors about buying individual bonds. Most folks don't understand the that the costs for these transactions are huge and hidden in something called the bid/ask spread. That's the difference between what the bond dealer paid for it and what they'll charge you. (Vice versa if you are selling to them)

Here's a story about how our friends at Morgan Stanley were marking up municipal and corporate bonds between 5 and 25%. Wow! Be smart, use bond funds or professional fiduciary bond advisors to get your bond exposure.

-Christopher

Finra fined Morgan Stanley $90K for unfair trading practices

By Sara Hansard

October 19, 2009

Morgan Stanley has agreed to pay a $90,000 fine to the Financial Industry Regulatory Authority Inc. to settle charges that it traded municipal bonds at unfair prices.

The fine covered 11 corporate-bond trades and three municipal-securities trades made in 2003. Markups or markdowns listed in Finra's complaint ranged from 5.25% to 24.3%. In addition to paying the fine, Morgan Stanley agreed to make restitutions to investors totaling nearly $41,000.

Morgan Stanley agreed to the settlement without admitting or denying the findings. The settlement was reached with Finra in August, but it was not announced by Finra until mid-October.

“We don't comment on regulatory matters,” said Eric Grossman, managing director at Morgan Stanley, when asked about the Finra fine.

Link to Investment News

Profits and Morality

I spend a lot of time in Austin and I love going to the Whole Foods corporate store in the downtown area. If you ever get to Austin, this is worth seeing. Anyway, John Mackey, Whole Foods' founder talks here about why he thinks business is, or can be, a moral thing.

I've never understood why people thought business was "greedy" or immoral in its pursuit of excellence. After all, business success just means that you've successfully solved some human problem. Money is the measure of your success but it isn't necessarily the end in and of itself. Mr. Mackey agrees and I admire his courage for actually speaking about it.

-Christopher

The Whole Foods founder talks about his Journal health-care op-ed that spawned a boycott, how he deals with unions, and why he thinks CEOs are overpaid.

By STEPHEN MOORE

"I honestly don't know why the article became such a lightning rod," says John Mackey, CEO and founder 
of Whole Foods Market Inc., as he tries to explain the firestorm caused by his August op-ed on these pages opposing government-run health care. "I think a lot of people who got angry haven't read what I actually wrote. There was a lot of emotional reaction—fear and anger. I just wanted to get people to think about whether there was a better way to reform the system." 

Read the full WSJ article "The Conscience of a Capitalist" »

What Would Sleeping Beauty Think?

In late September of 2009, Sleeping Beauty is awakened after a long 13 month slumber.  As a modern woman who has been left in charge of her family’s investment portfolio, among other responsibilities, she contacts her fee-only wealth manger, Trovena, to see how her investments have performed in the past year.

“Scott, I am sorry that I have not returned your calls over last year, but I was bewitched, again” Sleeping said, a little embarrassed.  “I am now back awake, and wanted to get an idea as to the value of my investments.”

To which Scott replied, “It is so great to hear from you, Sleeping.   We do not have the exact month end calculations yet, but it looks like your portfolio has gained about 3% in value while you were asleep.”

“Only 3%,” she replied, a little concerned.  “What happened since I have been asleep?”

“Not sure you are going to believe me, but here are the highlights,” said Scott. “As you may remember, before you went to sleep there was the beginning of some trouble around loans made to many homeowners, and there was talk of a recession.”