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Tue, 10/30/2007

Fallen Stars by Daniel R. Solin:

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The Morningstar “star” system is often used by brokers and advisors to pitch hot mutual funds. A five star rating means huge inflows for mutual funds. A one or two star rating can mean significant outflows as investors flee these funds.

Over the years, there has been considerable research demonstrating that high Morningstar ratings are not predictive of future performance. Some of these studies demonstrated little difference between the performance of five star and three star funds in the years after the rating was given.

A new study by Professors Morey and Gottesman of Pace University concludes the opposite. The study looked at Morningstar rated, domestic equity funds for the three year period from July, 2002-June, 2005. They concluded that “higher rated funds, for the most part, significantly outperform lower rated funds.”

So, should you run out and buy five star rated funds?

Not if you are interested in superior returns.

With minor exceptions, the study found that, in all star categories, index funds outperformed all of the rated mutual funds.

This finding is not mentioned in the “Conclusions” to the study, which focuses on the predictive power of the higher rated funds, thereby missing the point. Why should investors care if five star funds outperform four star funds, when index funds outperform five star funds?

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Tue, 10/30/2007

Slouching Towards Hyperfitness, One Squat At A Time:

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So the verdict is in: I am not Hyperfit. I would say, judging from my performance in the gym yesterday, that I am not Decentlyfit, or even Slightlyfit. By the end of my forty minute workout, I was a sweating, gasping mess, bewildered and stunned by how Sean Burch’s seemingly innocuous exercises had so quickly demolished me. This was playground stuff, I had thought, the sort of things that six year olds did for fun; things like jumping around, crouching and clapping your hands. Easy.

I should have known better. Sean Burch, the author of Hyperfitness, is a fitness guru who quit his job in finance to pursue his dream of scaling Mount Everest. He did so in 2003, reaching the peak with barely any use of bottled oxygen, and then proceeded to jump rope for a minute—at an altitude of 26, 181 feet. But that’s not all—to warm up for that incredible feat, he scaled mountains in Greenland, Alaska and Tibet, being the first to ever scale a large number of those peaks. Not content to rest on his laurels, he then set Guinness World Records for the fastest Arctic Marathon and the fastest ascent of Mt. Kilimanjaro. Why on earth had I thought that his workout would be easy?


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Mon, 10/29/2007

Penguin Group (USA) Weekly Update - 10/29:

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Dutton Acquires New Trilogy, The Century Trilogy, by #1 Bestselling Author Ken Follett

Ken Follett, who debuted in the #1 slot on The New York Times, The Wall Street Journal and Publishers Weekly lists, as well in the top five on international bestseller lists for his already critically-acclaimed novel, World Without End, will write a new epic trilogy, The Century Trilogy. The news was announced last week by Leslie Gelbman, President of Mass Market Paperbacks, Penguin Group (USA), and Brian Tart, President and Publisher of Dutton. Paperback editions of the trilogy will be released by New American Library one year later after each hardcover edition.

As in his record-breaking international bestsellers, The Pillars of The Earth and World Without End, this new trilogy will focus on intense personal dramas set against the vast looming background of world-changing historical events, including the Great Depression, the rise of Adolf Hitler, the legendary battles of World War I and II, the development and deployment of the atomic bomb, the space race, and the Cuban Missile Crisis.

The first book in the trilogy, which Dutton will publish in hardcover in 2010, will take place before and up to World War I. Book Two, set to be published in 2012, will encompass World War II, and Book Three, due out in 2014, will conclude during the Cold War.


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Sun, 10/28/2007

It's So Easy, Your Broker Could Do It! by Daniel R. Solin:

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When The New York Times reviewed The Smartest Investment Book You'll Ever Read, the headline was "A Stubborn Insistence On One Way To Invest." The reviewer went on to somewhat begrudgingly concede that "it is clear he is on to something."

Actually, I am only partly guilty. I do not believe there is only one way to invest. I do believe there is only one way to invest intelligently. Here it is:

1. Determine your asset allocation. You can do this by taking a free risk capacity survey. There are many of them on the internet. I admit to a bias for the one at the web site for my book.

2. Buy three low cost index funds from Vanguard.

  • - The Total Stock Market Index Fund (VTSMX). Put 70% of the amount allocated to equities in this fund.

  • - The Total International Stock Index Fund (VGTSX). Put 30% of the amount allocated to equities in this fund.

  • - The Total Bond Index Fund (VBMFX). Put 100% of the amount allocated to bonds in this fund.

3. Rebalance your portfolio once or twice a year to keep your asset allocation intact or to change it if your investment objectives or tolerance for risk have changed.

That's it. You are done.

Depending on your asset allocation, the long term average annual returns of these portfolios have ranged from 9.06% to 10.86%. The portfolios with the highest allocation of equities have yielded the highest returns.


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Fri, 10/26/2007

Daniel R. Solin, author of The Smartest Investment Book You'll Ever Read - our blogger for the week of 10/29:

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Daniel R. Solin is our guest blogger during the week of October 29th. If you have any questions for Daniel R. Solin, add a comment to any of his posts. Here is some brief information about The Smartest Investment Book You'll Ever Read: The Simple, Stress-Free Way to Reach Your Investment Goals:

Daniel Solin cuts through financial propaganda to show readers exactly how assets should be invested, using trusted, brand name fund managers like Fidelity and Vanguard. Solin's easy-to-follow plan allows investors to create and monitor their portfolios in 90 minutes or less a year, explaining how to assess risk and how to allocate assets to maximize returns and minimize volatility. Readers will also learn how to avoid the biggest mistakes investors make, from buying into media hype to giving their hard earned cash to hyperactive brokers and investment advisors.

About Daniel R. Solin

Daniel R. Solin is a leading securities arbitration lawyer and a principal in Academic Wealth Management, LLP, a Registered Investment Advisor. The author of Does Your Broker Owe You Money?, Solin has testified before a congressional subcommittee investigating the fairness of the mandatory arbitration system imposed on all investors by the securities industry. He has appeared on The O’Reilly Factor, MSNBC’s Week-end Economic Review, CNN’s Money, and Bloomberg Television. He has been interviewed on more than 40 radio programs, including USA, CBS, ABC, and a number of regional NPR affliliates. Formerly the host of his own financial cable television show in southwestern Florida, he is a much sought-after speaker for groups of investment professionals, lawyers, and accountants.


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Tue, 10/23/2007

Top Colleges and New Options by Elizabeth Wissner-Gross:

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“What do you mean by “top” colleges?” people often ask when they come to my book signings or college admissions talks. “Your college book’s subtitle is ‘272 Secrets for Getting Your Kid into the Top Schools.’ What constitutes a top school, and aren’t you only talking about the Ivies?”

No, I explain emphatically. A top school in my book is a college that offers the best opportunities for the student applying—according to that student’s interests and dreams.

If, for example, your child is interested in film animation, some top schools might include NYU, USC, UCLA, CalArts and RISD—none of them an Ivy. If your child is interested in robotics, top schools might include MIT, Caltech, Stanford, Carnegie Mellon, Johns Hopkins, Harvey Mudd, Olin, Rensselaer Polytechnic, or Rose Hulman. Or for a student interested in Peace Studies, some top choices could include Swarthmore (Peace & Conflict), Wellesley (Peace & Justice), UC Colorado (Peace & Conflict), Brandeis (minor in Peace, Conflict & Coexistence), and Bryn Mawr (Peace & Conflict).

How about a college where the students travel around the world—Global College—gaining firsthand experiences? While some colleges may offer semesters abroad, or even entire years abroad, Global offers four solid years of travel. In the first year, students live in Costa Rica.

What I want high school seniors to know is that many, many wonderful programs exist outside the Ivies—an important concept in this most competitive year of college admissions—and new opportunities are opening up in various parts of the country.


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Tue, 10/23/2007

Penguin Group (USA) wins 2007 Quill Awards "Book of the Year" Award for Second Consecutive Year:

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Nora Roberts took home the prestigious “Book of the Year” award for her book, Angels Fall (G. P. Putnam’s Sons), at last night’s third annual Quill Book Awards, presented at a star-studded gala at Lincoln Center, hosted by NBC News’ Al Roker and Hoda Kotb, with a special guest appearance by Stephen Colbert. This is the second consecutive year that Penguin Group (USA) has won “Book of the Year,” an award that was voted on by consumers via a month-long online voting system this Fall. Tyler Perry claimed the prize in 2006 for Don’t Make a Black Woman Take Off Her Earrings (Riverhead).

Award winners also included Penguin Group (USA) authors Al Gore, Michael Weinreb and Patrick Rothfuss:


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Mon, 10/22/2007

Penguin Group (USA) Weekly Update - 10/22:

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Penguin Group (USA) Holds Three #1 Slots on The New York Times Bestseller List

For the week of October 28th, Penguin Group (USA) has once again managed to secure three #1 slots simultaneously on The New York Times bestseller list. World Without End by Ken Follett (Dutton) debuts at #1 on the hardcover fiction list; The Three Snow Bears by Jan Brett (G. P. Putnam's Sons) is first on the children's picture book list, for the second week in a row; and Eat, Pray, Love by Elizabeth Gilbert continues to reign at #1 on The New York Times nonfiction paperback bestseller list for 21 straight weeks, 38 weeks overall. The impact of Gilbert's October 5th appearance on "The Oprah Winfrey Show" is still being felt. USA Today reported that Eat, Pray, Love is currently outselling Love in the Time of Cholera by Gabriel Garcia Marquez (the latest Oprah Book Club pick) four to one. More than 2.5 million copies of Eat, Pray, Love have been shipped to date, with more than 575,000 shipped so far in October alone.

The Brief Wondrous Life of Oscar Wao is a Finalist for the 2007 John Sargent Sr. First Novel Prize

The Brief Wondrous Life of Oscar Wao by Junot Diaz (Riverhead) has been named a finalist for the 2007 John Sargent Sr. First Novel Prize. The judges comment: "Diaz immerses us in the tumultuous life of Oscar and the history of the family at large, rendering with genuine warmth and dazzling energy, humor, and insight the Dominican-American experience, and, ultimately, the endless human capacity to persevere in the face of heartbreak and loss."


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Sun, 10/21/2007

Year of the Bulldog by Elizabeth Wissner-Gross:

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We’re in for a dramatic change in the high-end college admissions pattern this year—that’s my prediction—as a result of Harvard and Princeton’s move to eliminate Early applications. The way I envision this year’s admissions process shaping up, Yale will receive a record number of Early Action applications—not just a 10 percent or 20 percent increase. But from my tracking of the situation, I’m expecting the number of Single Choice Early Action (SCEA) candidates to Yale to more than double, maybe triple.

Although a Yale admissions spokesman said that the numbers aren’t in yet and he couldn’t yet quantify the increase, he said the university is indeed seeing increased action this year in the days before Nov. 1, the SCEA application deadline. More students have been showing up at info sessions and inquiring about Yale. And Yale’s website is “strongly” advising SCEA applicants to get their materials in sooner this year, as Yale “will begin reading applications after mid-October,” instead of waiting until Nov. 1 to start.

In a “typical year”—if such a year ever existed—Yale claims to attract more than 20,000 applications for 1,300 freshman spaces. This would seem to translate into a 7.5 percent acceptance rate, and 92.5 percent rejection rate. But actually closer to 1,800 are accepted each year by Yale, and about 30 percent of those choose not to attend. So in a so-called “typical year,” about 9 percent are accepted, leaving a 91 percent rejection rate. But this is no typical year, so expect the rejection rate to increase dramatically.


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Fri, 10/19/2007

Elizabeth Wissner-Gross, author of What High Schools Don't Tell You - our blogger for the week of 10/22:

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Elizabeth Wissner-Gross is our guest blogger for the week of October 22nd. If you have any questions for Elizabeth Wissner-Gross, add a comment to any of her posts. Here is some brief information about What High Schools Don't Tell You - 300+ Secrets to Make Your Kid Irresistible to Colleges by Senior Year

The headlines prove it: Competition for admission to America's top colleges is more cutthroat than ever. Gone are the days when parents could afford to let high school guidance counselors handle the admissions process alone-gone, also, are the days when a student could wait until senior year to prepare for it. As Elizabeth Wissner-Gross, a highly successful educational strategist, knows from working for over a decade with hundreds of middle- and high school students and their parents, if you want to raise a kid colleges will compete for, you must act, early and aggressively, as opportunity scout, coach, tutor, manager, and publicist-or be willing to watch that acceptance letter go to someone whose parents did.

What High Schools Don't Tell You reveals 250 strategies to help parents stack the admissions deck in their kid's favor, gleaned from Wissner-Gross's expertise and from interviews with parents of outstandingly high achievers-strategies that most high school guidance counselors, principals, and teachers simply don't know to share. From identifying exactly which academic credentials will wow an admissions committee to which summer programs and extra-curriculars can turn an ordinary applicant into a must-have, What High Schools Don't Tell You demonstrates how hands-on parental involvement early in a child's high school career is essential to achieving college admissions success.


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