Summer is over. Fall has begun. Christmas is not yet upon us. Thus it is a good time to clean up personal investments.
One thing that I recent did was close all of my accounts with firms that do investment banking and IPOs. There is an inherent conflict of interest between wanting to collect fees from companies selling shares to the public and providing impartial advice to individual investors. A typical example of where the conflict arises is the July 28, 2003 settlement between the SEC and JP Morgan and Citigroup (source). It seems that the two firms assisted Enron in defrauding investors by manipulating its financial statements. A more direct example was furnished by the great “stock analyst scam” of the 1990s, which resulted in a $1.4 billion settlement in April 2003. A good archive of stories about this settlement is available at http://www.washingtonpost.com/wp-dyn/business/specials/wallstreetprobe/.
Hear are the firms involved that agreed to pay the SEC to settle conflict of interest charges:
- Citigroup/Salomon Smith Barney
- Credit Suisse First Boston
- Merrill Lynch
- Morgan Stanley
- Goldman Sachs Group
- Lehman Brothers Holdings
- J.P. Morgan Chase
- Bear Stearns
- UBS Warburg
- U.S. Bancorp Piper Jaffray
(source: Washington Post). If you have an account with one of these organizations and you’re not yourself a corporate criminal or wanting to execute an extremely complex leveraged buyout… perhaps it is time to ask yourself why. If they have to choose between your best interest and that of a Fortune 500 company from whom they stand to earn $100 million per year in fees, how can they possibly choose you?
Sometimes there is no alternative but to deal with an organization that has been convicted of violating federal law and cheating its customers. For example, if you want to send your kid to an Ivy League college you will become a customer of an organization that was prosecuted for tuition and financial aid price-fixing in violation of antitrust laws. If you want to listen to your favorite musician and don’t have time to waste on Kazaa you’ll be buying a CD from a record company that was very likely guilty of violating those same antitrust laws. If you want to run the same software as everyone else you’ll be a customer of Microsoft, no stranger to the Federal court system.
In the world of personal finance, however, plenty of pure alternatives are available. Vanguard and Fidelity offer a huge range of investment instruments. Suppose that you move your money to Vanguard, a company that is actually owned by its investors and that does no investment banking. You don’t have to scrutinize every communication from Vanguard to figure out if they’ve colored their message to benefit one of their big corporate customers. Vanguard’s instruments are 0.5-1% lower in fees than those offered by the typical investment bank/full-service brokerage. When people were making 8% after-inflation annual returns it didn’t seem ruinous to pay an extra 1% in fees. However, we live in an age where investors might consider themselves lucky to earn 2% above inflation; do you really want to give up half of your return to a stock fund manager, financial planner, or whatever?
What’s worth buying these days? This blog seems to be mostly a techie hangout so let’s consider the challenges of middle-aged techies (like me!). If you are a computer programmer over the age of 35 you should probably plan like a retiree and figure out how to live on whatever money you currently have. Remember that retirement doesn’t necessarily mean that you’re old or that you’re rich; it could simply be that you’re no longer a useful component of the labor force.
For any retiree, inflation is the big risk and we seem to have all the makings of a couple of inflationary decades right in front of us. George W. “Hoover” Bush may need to invade quite a few more countries in order to win the 2004 election. We only attack poor countries because it minimizes the chance of getting our ass kicked. Then we start feeling sorry for the defeated inhabitants because they are so poor. So we have to spend $200 billion “rebuilding” until whatever country we invaded reaches the standard of living of Arkansas. The government is going to get the $200 bil by borrowing. The easiest way to pay back the borrowed money, especially to foreign suckers who bought our bonds, is by inflating the U.S. dollar so that a $7 trillion debt isn’t scary anymore (because $7 trillion might be a typical annual salary for a Walmart cashier if we go for Latin American-style inflation).
Regular bonds are a terrible choice when inflation starts to gallop. With a bond you have a promise from the government or a company to pay you, for example, $1,000 in 2030. But what if $1,000 in 2003 is only enough to buy a Big Mac? Tough luck. You could buy real estate on the theory that Americans will keep adding working longer hours and outbidding each other until a typical mortgage is for 80 percent of a three-job couple’s income. The problem with real estate, however, is that municipal governments will attack your investment with savage real estate taxes and by every estimate the price of U.S. real estate is absurdly high right now.
A reasonable inflation-protected choice is a standard common stock mutual fund. You’re buying shares in operating companies. Even if inflation runs wild as it did in the late 1970s, owning 1 percent of General Electric will still make you a very rich person. The latest gimmick in stock mutual funds is the “tax-managed” fund that tries to minimize capital gains distributions by (a) selling the big losers every year to get capital losses, and (b) penalizing people who pull their money out after a year or two. Research shows that careful tax management can beat an ordinary index fund by about 0.5% in after-tax returns (I once looked into a JP Morgan tax-managed index fund; its expense ratio was 0.8% higher than the standard Vanguard index fund and therefore all of the benefit of the tax management would have gone into JP Morgan’s pocket; fortunately Vanguard has a few tax-managed funds of its own).
The ultimate in inflation protection is an inflation-indexed bond from the U.S. government. You can learn about these in this Motley Fool article. They can be purchased through Vanguard or Fidelity. If you don’t have enough money to hold the individual bonds, both Vanguard and Fidelity offer inflation-protected bond funds.
To summarize… (1) consider voting against the Wall Street criminals by moving your assets to a non-criminal non-conflicted organization such as Vanguard or Fidelity, (2) if you’re someone whose performance is evaluated by a clueless MBA and whose job could conceivably be done by a guy sitting at a computer in a low-wage country, plan for early retirement by investing in assets that won’t wither in the face of inflation.
Using Fidelity or Vanguard doesn’t mean your money won’t be _invested_ in corporate criminals, however. But I agree that you won’t be directly screwed, rather, money for you children’s health care will be taken away by the goverment to give these thugs tax breaks they do not need as a thank you for moving their business overseas. But I guess you can’t change that and because short of starting your own ethicaly operated (and succesfull!) company, this is the only way to pay for retirement and you just have to look after number one…
Another very reasonable option for retirement investment (ie: long term) is simply choosing index tracker funds and spread your investment acros the globe. As opposed to managed funds, which can give a higher return, and index tracker fund maintains the same ratio of stocks as makes up the index it is tracking. As historicaly the stock market (and so the index) doubles, on average, every 7 years, this is much safer. Inflation adjusted, you can safely expect a 6% return. Put in $500 a month for 40 years and you will have yourself a million (in _then_ dollars, not today’s!), this is enough to continue a good 60K a year income (remember your house is likely paid off by then) from just interest paid on that, without having to touch the actual million, as you never know how long you will live.
If $500 a month sounds like a lot for a 25 year old, well, then I guess you will just have to buy a smaller TV, drive a smaller car and that dual G5 with 23″ cinema screen will just have to wait…
Some of this is a matter of ‘buyer beware’. If you’re picking your own stocks, you can choose to ignore your broker’s recommendations. If you invest in mutual funds, you can research the fund manager and the fund’s history.
Yes, these guys ought to be in the trouble they’re in. I’m going to stick out my neck and say that all such companies have been involved in this stuff to varying degrees, and it just happens that a few weren’t caught at it.
Personally, my Bear Stearns guy has always given me decent recommendations and not screwed me around, so I’m sticking with him.
Webwench: I think I didn’t state my point very clearly. “All such companies” do not include Vanguard and Fidelity. It is not that Fidelity, for example, is in the same business as Merrill or Bear Stears and didn’t get caught. Fidelity is in a completely different business. Fidelity has investors as customers. Bear Stearns has companies as customers (for I-banking) and some investors as customers too, on the brokerage side. Hence Bear Stearns has a conflict of interest because these two groups of customers have conflicting goals. Fidelity doesn’t have to struggle with a conflict of interest because they don’t have the I-banking business to begin with.
Bond choices for those worried about inflation include (1) TIPS held in tax-deferred accounts (their value increases with inflation), (2) savings bonds (they do not lose value if inflation increases) and (3) short-term bonds (when rates rise you benefit more from higher yield than you lose from lower principal).
For equities, index funds at Vanguard are the way to go. Other mutual fund companies are too expensive – do the math on what 1% a year in fees do to returns. Active management means more turnover which increases cost – trading is expensive and results in more tax to the holder. The total advantage of a Vanguard broad market index fund over a typical active fund is probably somewhere around 2%-3% a year (a bit less if you’re holding in a 401(k) or IRA).
>>owning 1 percent of General Electric will still make you a very rich person>>
current market value of 1% of GE is about $3 billion.
I was in the mobile phone industry earning big bucks, but now with the downturn I am earning nothing. Can
I am an over-35 computer programmer working for a large software company in the Pacific Northwest. One alternative to waiting around for my job to be moved to India, which I am considering, is to join a small consulting firm that builds AI systems for the Dept of Homeland security. The drawback is that this would involve moving to a congested east-coast city where the price of an ugly, 1200 sq foot brick rambler within an hour’s commute of the city is about $650K.
As my financial advisor, Philip, what do you recommend?
You know…they say more than %50 of Americans are stock owners now. Heck, I’m in that class of people. That said, the last thing I care to read about is how to manage scads of money. Philip, I wish that we lived in a time when “financial advisers” would make the exact statements you have made in this posting. Unfortunately we do not. So I cannot say here that this posting is without merit, because it’s sort of filling a gap.
But to blog about management of your finances is a most egotistical thing to do. It sort of upsets me. I want to read here about the topics of Computer Science and other related techo-stuff.
This post smells Philip. Sorry. I love your work.
Haha – Philip, not unlike myself, is an ego maniac! I love the post and rather wish he’d get back to his roots a little more often: http://philip.greenspun.com/narcissism/narc-today-89.pdf
Poo on you Randall,
Philip, thanks for sharing your insight on investing. I’m quite sick of one tracked web sites and blogs. Your experience as an educator, innovator, entrepreneur, photographer, pilot, geek, story teller, dog lover, etc. etc. etc. have had a significant impact on many people throughout the years.
After doing my own research on personal finance, I’d have to say you are right on. I don’t have time to critically manage my own investments. I don’t trust corporations which have conflicting interests between me and a larger “more valuable” customer. You offer some valuable insight from someone who has been inside of a company working to IPO. Most of us will never have the type of experience you have gained.
Please, continue to offer us a broad range of topics. Thanks for sharing your life and experiences. Thanks for being egotistical :). Thanks for being honest.
Phil, good article. However, there’s really no getting away from paying real estate taxes unless you plan to hover 3 feet off the ground indefinitely. In real estate investments, real estate taxes should be completely paid for by your tennants. Otherwise, the investment is a lost cause anyways.
As a tech worker, no matter how old, it’s best to plan and work as if you won’t have a job tomorrow. That’s just the nature of this business. That said, it isn’t all bad because it spurs you to think and plan for early retirement.
As for needing millions for retirement, that’s just what the captains of the investment business want you to believe so that you would fork over all of your money to them for them to earn their 1%. If you read the typical articles on retirement in Kiplinger’s or Money, they all parrot the fund industry’s golden rule of $2 million is the minimum you would need for a comfortable retirement. What they don’t say is that by comfortable, they really mean affluent — jetting to Europe every few months, buying the latest luxury car every two years. Most of us don’t live like that even when we have full-time jobs, so I doubt any of us are going to be so foolish in retirement. My personal estimate is that $30K a year would make a very decent retirement. For that kind of money, a conservative 5% yield on a $600K nest egg would be more than enough. If you’re still worried, you can always save a bit more and use the extra yield for continued savings during retirement or move to cheaper places such as Mexico or Canada.
I highly recommend this book “Get a Life: You Don’t Need a Million to Retire Well” by Ralph Warner.
http://www.amazon.com/exec/obidos/ASIN/0873378377/qid=1065645982/sr=2-1/ref=sr_2_1/103-6335568-8520653
Who cares whether there is conflict of interest at your securities company unless you plan to ask them for investing advice … which only an idiot would do. The guys at securities companies are generally not experts in investing.
I do have a tip for you on dealing with inflation and living within your means: how about losing the airplane, dude?
The problem with comments like “real estate is too expensive now … taxes are too high” is that you can’t generalize about real estate like you can with the stock market. When you say “real estate” my question is What real estate?–where?–which building? It really is completely dependent on what you buy, where, for how much. Since real estate is not a fungible liquid market, you can make excellent investments by studying the field and spending the time (and you can’t do it all on the web sitting on your butt in your Aeron) finding cheap properties in good locations. It does take a lot of work however, so perhaps it’s more accurate to call it a side job rather than an investment.
Maybe techies should pray for disaster. If there’s massive inflation, foreigners aren’t going to want to hold dollars/US equities/US Treasury Bonds, and the dollar will devalue against other currencies, so the ultra-cheap techies in India will no longer be ultra-cheap.
Picture, if you will, a land beyond time and space, a land where America is a normal country with people who actually do their own productive labor.
>>My personal estimate is that $30K a year would make a very decent retirement. For that kind of money, a conservative 5% yield on a $600K nest egg would be more than enough. >>
You need 5% above inflation, not 5% nominal.
>>how much money you need to retire at 35>>
Probably something in the range of 25x-35x desired annual spending from the portfolio (including taxes).
paulb: Your idea of working either for the government or a government contractor is an excellent one. Surveys always show that government employees get paid far more than comparably skilled people in the private sector and obviously the job security is far greater. You need to have a tolerance for soul-crushing bureaucracy but of course any large commercial enterprise requires that as well.
Lowell: thanks for the tip on ditching the airplane but my personal airplane is only a small extravagance. The total cost is probably less than $50,000 per year and will decline further once my DA40 depreciates to its asymptote and I decide that it isn’t entitled to live in a hangar (a shocking $6000/year). Certainly cheaper than a wife and kids and the beauty of the airplane is that it effectively prevents you from acquiring the burdens of a family! (Women are few and far between at general aviation airports and typically react with horror at the idea of traveling in a 4-seat aircraft.) Airplanes get expensive when you stick a jet engine in, which is a shame because they are never going to reach a mass market with piston engines (1950s technology is too noisy and uncomfortable for a 2003 yupster).
Peter: the “real estate is too expensive now” idea comes from a study by the Economist magazine comparing the current cost of buying real estate to expected rental income. This ratio, sort of like a P/E ratio for stocks, is much higher than its long-term average. But of course if you are an expert on an area and find a building that is a good deal and can manage to work the local government to get permission to develop it you will make far better returns than investors in public equities.
Cheaper than a wife and kids, LOL. Many wives manage to be self-supporting at least, and I’d question what kind of private schools you intend to send your kids to that would total anywhere near $50,000/year.
That said, why the heck shouldn’t you have toys, if you can afford them? Not only is consumption the American way (cynic’s view), but anything that helps keep general aviation industries afloat is good in my book.
As an aside, you might find that women pilots hang out less at airports, but are still a presence. I know in my flight-instructing days I had several female students, and although I was the only female CFI in our little operation, most larger flight training operations seem to have at least a couple.
Phil, >>my personal airplane is only a small extravagance. The total cost is probably less than $50,000 per year>>
The median household income is less than $50,000 per year. And that’s before taxes.
Enjoy – don’t be defensive.
webwench, >>I’d question what kind of private schools you intend to send your kids to that would total anywhere near $50,000/year.>>
Two kids at Dalton would cost about $50,000/year. Welcome to NYC 🙂
If you want some wise investment advice, I’d personally recommend some of the http://www.agora-inc.com newsletters, which are mostly reasonably priced, and fairly helpful.
For example, just following two of these newsletters (Outstanding Investments and Penny Stock Trader), I’ve made 44% in the past six months (only playing with a few $K, but the percentages would be the same with larger monies).
Plus, the Daily Reckoning newsletter (also available from Agora) is a real scream.
And, yes, they’re goldbugs, too, which is the only real asset that makes sense in the face of the likely screaming inflation. They’re also doom-and-gloomers about the American economy, but for good reason.
Loads of fun! 😉
richard, I expect people in NYC to be insane anyway so… it’s all good 🙂
webwench, Philips and Exeter would be about $55-60,000 for two. What does that say about MA and NH?
There are a couple of answers to that question. The northeast as a whole is insane, and if you people had any sense, you’d move south? The wealthy up there have more money than sense and make middle-class moms buying SUVs for status look like misers? I guess Phil might have to consider public schools? What would you say?
If I had kids I’d definitely think about moving to Canada or somewhere in the U.S. where public schools were better and real estate prices were cheaper. The $228,000 cost of my airplane, for example, wouldn’t pay the difference in cost between a 2BR and a 3BR condo in my neighborhood. The public schools here are some of the worst performing in the state of Massachusetts so you’d be looking at $20,000/year for private school for each kid. Places like the Bay Area and the big cities of the Northeast only make economic sense if you have the kind of job that is only available in these areas. Of course there are other reasons to live in Cambridge, e.g., if you enjoy learning new things and running into people who can teach you stuff.
we do seem to have answered the question “what kind of private schools you intend to send your kids to that would total anywhere near $50,000/year” (for two kids) 🙂
also, these schools draw students from all over the country, so the issue is more widespread than you might hope.
i’d say an airplane is an excellent toy.
>>Places like the Bay Area and the big cities of the Northeast only make economic sense if you have the kind of job that is only available in these areas.>>
on the other hand, in which reasonably priced city can you be in walking distance of a museum of the quality of the metropolitan?
That’s why it says “economic sense”, Richard. Culture has no economic value. Allude to any work of literature that you care to in front of a crop of Harvard MBAs. Note the blank stares. The business executives whom I’ve met don’t read Virgil and their taste in art tends more toward the motivational poster than Raphael’s School of Athens.
Randall: Here’s a quick tech tie-in. Eaton Vance does tax-managed mutual funds. The application EV analysts use to organize and disseminate their research to portfolio managers is a database-driven web app, PANDA-style, with Scheme as the embedded language.
Phil, “Culture has no economic value” is incorrect, IMO. People will pay for it. Economists will tell you that just about everything has a quantifiable value.
Culture certainly affects my choice of where to live (although I have a job that’s only available in the area) and where to travel. My thinking on where to live in retirement often revolves around the tradeoff between the cost of living in NYC and the benefits of easy access to the Met, etc.
I work with corporate types, investment bankers, lawyers, etc., as I’m of that ilk. Some of them are interested in culture, some are not. How many people in the population at large read Virgil or like Raphael?
Re culture and choices of where to live: I’ve found that if you “enjoy learning new things and running into people who can teach you stuff,” you can find such people virtually anywhere, certainly in any medium-to-large city. To suggest this is only the case in the northeast is shortsighted.
Hey Phil,
Article request: could you outline _all_ the costs of your DA40 on your plane page? I’m always interested in bringing it down to per-hour costs, but however you think of it in your mind it probably pretty good.
Oh, and the pie-in-the-sky request: you talk about the visibility over the wing as being a major factor in choosing the DA40, could you take a couple of shots from your eye’s point of view looking over that wing at scenery on the ground? In general, is it possible/easy to take shots of the ground without serious forward slips and without the wings in the picture? It’d be great if there was one of those quick-time 360 degree shots from the inside of a DA40…
I’ve thought again and again about buying an airplane – almost to the point of distraction. I’ve been saving about 20-25% of my tech-industry salary for the last few years. Part in a maxed 401K and the rest pretty liquid. Naturally, I look at the liquid part of the pie and consider trading it in to get rid of the plane-rental shackles. But that’s a pretty big chunk of change….
Not to mention that it gets about the same gas milage as an SUV. (jab)
🙂
webwench, sure, but I’m making a much narrower point. If you want to be near a museum of a certain world-class and diverse quality, you’re pretty much limited to NYC, London and Paris. What other places have that high a degree of concentration of art and artifacts of that quality?
Rudy: the DA40 gets better mileage than an SUV! Something like 18 mpg. An SUV that will impress the neighbors is down around 14 mpg, I think. I think the DA40 costs around $30/hour for gas ($3.25 x 9 gph), $10 for the engine reserve, $20 for 100-hour inspections (not required but I like to do them anyway), and maybe $10 for misc. So that’s $70/hour marginal cost. The fixed costs are $6000 for a hangar, $2000 for insurance, $2000 for the annual = $10,000. Then there is the big cost of depreciation. Right now the plane is probably dropping at least $20,000 per year. Someone who bought a 10-year-old plane therefore would be looking at more like $10,000 in fixed costs (tie-down instead of hangar, little depreciation, lower insurance because cheaper hull value) and maybe slightly higher marginal cost due to more things vibrating loose and breaking. Buying a $50,000 Rotax-powered Katana and keeping it tied-down would be really cheap. Ditto for an old C172. A plane that you’d trust for single-pilot IFR (requires good autopilot, modern avionics, no squawks) is a lot more.
Unless you enjoy spending a lot of time in hangars talking to mechanics (nice folks and generally much happier than desk-bound programmers!) I think it is much better to rent planes as necessary. If you are going on multi-week trips, of course, you really don’t have a choice.
I can’t help too much with aerial photography. But sure you can take ground shots out the little window. Any single photo won’t come close to capturing the experience of being in the airplane, surrounded by sky and ground sights. I don’t think the DA40 is the right plane for serious aerial photography. Something like a Cessna Cardinal RG (no gear, no strut) would seem to be a better choice. Or any of the older airplanes that have STCs for little camera windows in the floor. Or a Robinson R22 if you have a second person at all times and you don’t mind the constant prospect of a sudden death 🙂
richard, a person with any sense would live somewhere sensible, and travel a few times a year to the museums. By airplane, perhaps.
as an aside, as someone who’s done some aerial photography, you should always have one person driving and one person shooting. Trying to do both means crappy pictures done unsafely.
It is possible to take photos in a fixed-gear high-wing airplane with a strut, but it does take some maneuvering and, often, some cropping afterwards.
Phil…
Comments on the viability and business sense of lease back (like to East Coast Aero club) of the DA40? I’m thinking of doing just that – the sales guy is pushing numbers… but I think the financial risk is too high.
PS. We’re building the world’s first all-electric airplane: http://www.aviationtomorrow.com
We’re using a Dynaero Lafayette and a Diamond motor glider as well.
If you have any experience with this… we want to implement a simple CMS for our website. PHPNuke seems too crude – no WYSIWYG text editor. I like Typo3 but it’s complex.
Tnx
…Jeff
Sorry to tune in so late. We have just returned from a short vacation in Spain. Let me offer a few comments from the experience of a techie who has invested successfully for over 40 years, who has already retired, and who lives largely on investment income;
a) I greatly agree with the overall thrust of your post. If I was to recommend one book to persons who invest as a sideline it would be Malkiel’s “A Random Walk down Wall Street” which advocates a similar philosophy and more strongly advocates index funds.
b) I have to take exception to your negative viewpoint on real estate as an investment. Your citing an index in the “Economist” that incicates that real estate is overvalued compared to its long term average is not enough. Equities are also overvalued compared to long term averages. Historically real estate has provided excellent protection from inflation and has done well in post stock market bubble periods like the 30s and the 70s. A balanced portfolio should contain some fraction in real estate – at least 10% and maybe as much as 50% in large portfiolios. If you do not have enough money or time to invest in individual properties, then REITs or REIT funds are a good alternative.
c) You can only learn about investing by actually doing it, making mistakes, and learning from them. The emotional aspects overwhelm the intellectual aspects.
d) Surprise! When you finally reach 65 or so and retire you will have to face up to the fact that your investments need to carry you for another 30 years. Inflation does not disapear as a consideration when you retire. You might as well learn how to invest now because you can not avoid it later.
e) PatW made an excellent point. Financial planning is only part of retirement planning, maybe the least important part.
Jeff: leaseback makes sense if you’re a doctor with a high taxable income. You turn a personal purchase into a business purchase and get all kinds of bonus depreciation, at least through the end of 2003. If you’re buying the airplane for an existing Schedule C business or if you’re living off investments that tend to generate only long-term capital gains there is no real advantage to leaseback.
I haven’t kept up with content management. Someone on my regular site was asking about Bricolage, an open-source Perl thing that sounded okay.
JCM: Malkiel’s book is excellent and I recommend it in old article on investing at http://philip.greenspun.com/materialism/ but recently I’ve seen some statements that the Efficient Market Hypothesis might be wrong and that you can predict the market by looking at past price movements, e.g., that the herd instinct to buy, buy, buy, and then sell, sell, sell is noticeable.
Jeff, although Philip has panned it in the past, I strongly reccomend you take a look at the Zope platform: http://www.zope.org
In particular, Zope has a freely available CMS available for it called Plone: http://www.plone.org
Feel free to contact me if you have any questions.
Michael: I’ve never panned Zope! In fact when people asked me about it I would say “the guys wrote their own http daemon, which shows the right hacker spirit”. I didn’t pay that much attention to Zope because they weren’t attacking the same sorts of problems that I was working on. I’ve not used Zope personally but my friends who have say that they don’t like the fact that there is so much layering on top of the database. They’d rather program in SQL than tweak Zope/Python methods and classes and they found it tough to figure out where to make modifications at all. Presumably this is a challenge that any system with a lot of abstraction on top of the database would present.
If I don’t recommend Zope it is because I haven’t tried it myself nor seen a student use it (we don’t allow toolkits in the current class so that isn’t a criticism) nor had a friend build anything with it.
Philip,
The latest edition of Malkiel, published in 2003, includes a major evolution in his thinking. For the first time, “Random Walk” is a useful investment guide, not just an interesting book. The efficient market hypothesis is no longer the whole story. Among other things, Malkiel would agree with you (and me) that excesses of optimism and pessimism can be noticed and can be taken advantage of.