Ben Bernanke is the guy who, if confirmed, will be the most visible individual and listened-to voice in regards to the United States economy. So his portfolio should tell us a little about his market philosophies.
Here’s his financial disclosure form from 2003. Henry Blodget analyzed his portfolio and discovered:
- He’s rich, but not as rich as Alan Greenspan.
- His and his wife’s retirement accounts are worth $1 million to $5 million. (They both worked in Princeton, one at the University, the other at Princeton Day School).
- Bernanke owns a lot of Altria (aka Philip Morris).
- His other holdings are mainly actively managed mutual funds.
On that last point, Blodget says …
This is interesting because Bernanke is an academic economist, and most academics believe that the market is so efficient that stock-picking is usually a waste of time and money.
... and offers several explanations for the congnitive dissonance:
- Bernanke possesses less intellectual rigor than is commonly thought.
- Bernanke has the brainpower necessary to find the truth but lacks the willpower and decision-making discipline necessary to put it into practice.
- Bernanke, like most people, is overconfident about his own abilities, even as he recognizes the limitations of others.
- Bernanke is an easygoing optimist who views life as too short to worry about 1 or 2 percentage points lost to active management and full-service brokerage fees.
The other explanation I could see is that we are all wrong and those with actively managed funds are better situated for the future over time, but I doubt it. I’d stick with the fourth option.
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7:00 pm (reply)
You’re a posting madman today!!! :)
Good article
Hazzard
http://www.everybodylovesyourmoney.com