Monday, January 28, 2008

Bill Gates and capitalism

Gates highlighted some fundamental problems with capitalism, including how innovation and technological advancement create an ever-growing economic disparity between the bottom third and the rest of the world's population. When businesses earn more profits in regions that are already economically stable, innovation tends to bypass the world's poor.

In what he calls "creative capitalism," Gates hopes to banish some of this disconnect by encouraging a new system of business. This new system would promote economic incentives for global powers to have a bigger presence in areas of the world stricken by disease and poverty, particularly Africa. When doing business there would not present profitable opportunities, using a company's reputation to pull in money is one way to use the marketplace to help the poor.

Tuesday, January 22, 2008

Get the Most Out of an Annual Report

Some annual reports are pretty, color-filled documents that, although helpful, function more as a marketing and communications tool than anything else. What you really want to dig into is the annual 10-K, the boring (and, at times, long) black-and-white document containing the information that public companies must file with the SEC.

Friday, January 11, 2008

eating your own cooking

According to a study recently published in The Journal of Financial Economics, there is a direct correlation between the amount of money a mutual fund manager has invested in his fund and its performance. No huge surprise there, particularly if you've spent any time reading about the importance of "eating your own cooking."

But wait, it gets better. The study cites that the amount a manager invests in his fund is the most accurate indicator of how well the fund will perform over time.