Optimism Hits a Record High in Australia

It's probably hard for my American readers to imagine this is possible. I guess because we missed out on any kind of recession really (so far), just had a bit of a slowdown, when most of the rest of the world went into recession, has made Australians ultra-optimistic. We haven't had a recession for 19 years now...

HFRI August Numbers are in

About a week earlier than normal:
They confirm the general picture shown by HFRX but the overall index came in stronger as did many styles such as macro.

Initial Hedge Fund Performance for August 2009

First off the blocks HFRX reports a 1.25% gain for hedge funds in August. The distribution across "styles" is pretty similar to that in July:

More Unisuper Glitches

I was actually sent a statement by Unisuper yesterday, but the glitches continue. I noticed that my account was about one month behind where it should be given the contributions that have gone in. In July, I just assumed they were behind a bit in crediting things. In preparing this month's accounts I noticed the same thing and went in to examine the transactions in detail. I found negative transactions exactly cancelling all my June contributions! They told me that they will investigate this. The average person who ignores their superannuation statement (as people have told me) would never catch this kind of thing. We can't assume that this will be automatically corrected at some stage. That this whole company seems so "buggy" I think is a sign of lack of competition. They have a monopoly over providing superannuation services in the university sector.

Carbon Planet

More details of the scandal. I'm glad I didn't invest in it.

There's Been No Recession in Australia

According to the official data.

Snork Maiden's Investment Account

It's doing pretty well (in AUD):



Most of the gains are savings of course but net profit is now $A1,166. Against the MSCI World Index in Australian Dollars beta is 1.23 and alpha 2.2%. The allocation is as follows:

Moominmama Performance August 2009

Equities, bonds, and hedge finds had positive returns. The MSCI World Index was up 3.62% this month and the S&P 500 seems to have had a similar gain, so all but Moominmama's Brazilian fund underperformed the markets, which is a bit disappointing.

Moominmama hasn't been feeling well recently, but tomorrow she is scheduled for a cataract operation. Hopefully, it will go smoothly and then when she can see properly again she'll feel a lot better.

Long-Term Under- and Out-Performance

As things continued this month to bounce back from the depths of the GFC I thought it was time for an update on how we're performing relative to the market:



The chart shows the average annual rate of out- or under- performance relative to the MSCI World Index of money we invested in the month given. This is the rate of return of the entire portfolio since that month relative to the market. So investment from mid-2004 to mid-2008 has underperformed the market. Investments since the the the peak of the crisis last northern Autumn have strongly outperformed the market. The 1998 to 2004 period also was one of out-performance in retrospect. We've slightly underperformed the market (-1.31%) over the entire almost 13 year period.

Annoying Changes to Australian Immigration Rules

After the previous government raised the residency requirement in Australia to 4 years from 2 for those seeking to become Australian citizens, this government has now lowered it, but only for athletes it seems. Travel rules might have been relaxed more generally for other potential migrants - details aren't clear. I'd like Snork Maiden to become an Australian citizen as fast as possible. The change to travel rules is sensible, but why should athletes wait less than others just so Australia can win more medals. It's a cynical move. They should just slash the period back to what it was for everyone who qualifies to be an Australian citizen.

OpenOffice

Following EnoughWealth's suggestion I downloaded OpenOffice. Well, at least it lets me manipulate the shape of the charts in my old Excel files. If you doubleclick on the chart it pops up and the spreadsheet pattern behind it disappears. I could manipulate some but not all of the features of these old charts. Printing to a pdf also resulted in nice images. There are some gains over Excel 2008 but looks like more losses, so I won't be switching, though I really didn't spend much time looking at it. As soon as I found something I couldn't do that I wanted to do, I stopped.

Snork Maiden's Team Gets Another Year of Funding

Good news - the research team that Snork Maiden is part of got some more funding but less than they asked for, so either:

1. They need to find more money from other sources.

2. They have to cut out part of the team.

3. They can use the funding for one year instead of two.

But at least that is a very good start. At the moment I'm thinking it is unlikely that I am going to get a job for the first half of 2010 unless I go outside academia but that will reduce my momentum in getting research done and reduce my chance of getting an academic position. The grants I'm planning on applying for won't provide funding until the beginning of 2011 if I get them. No-one knows whether our current project will get any continuation funding. The whole research centre was funded for 3 years upfront. It looks like I can get expenses to work in Sweden for a month in early 2010 but not clear if I can get any salary. I still have a chance to get an academic position starting in the second half of 2010 which would work out well.

A "Solution"

I have found a temporary solution to my Microsoft Excel woes. I moved Excel 2008 into a folder I labeled "disabled applications" leaving the rest of Office intact. I set my account up things so that Excel 2004 opens on login. This means that if I click on an Excel file it will open in Excel (unless Excel is open already clicking on the file just fails to open anything) and then I instructed Firefox to open downloaded Excel files in Excel 2004. This restores my functionality except I must always have Excel 2004 open or otherwise open it before opening a file. This is all on my laptop. I'm seriously thinking of getting my IT guy to reinstall Office 2008 on my office computer without Excel and get him to reinstall just Excel from Office 2004? Will that work seamlessly? I'll keep my copy of Excel 2004 at work on my own personal external hard-drive in order not to violate the university's licencing issues (they are being audited by Microsoft right now).

The chart problem is not so bad with new charts but it is a total disaster with all charts I previously created in Excel 2004. They just appear as small images in the middle of a big grey area and can't be resized.

I just tried Apple's Numbers spreadsheet program and it also screwed up charts in an old file I opened. So it's not a solution.

P.S.
"Zoom to selection" in Excel 2008 kind of does something similar to "View Sized with Window" in Excel 2004, but I still can't find a way to reshape the the dimensions of the chart created - the grey area on the left and right sides of the chart stays there and covers the extra area of your chart so now you have to scroll backwards and forwards with your mouse to see the whole thing...

Microsoft Office 2008

Because the equation feature in Word 2004 wasn't entirely compatible with with Macintosh OS 10.5 (some notation appeared incorrectly though it is fine using OS 10.4) I "upgraded" today on my university computer to Office 2008. Wo"rd seems to be fixed and looks manageable, but I found that Microsoft have completely mangled the charts feature in Excel. When you want to create a chart you no longer get a dialog box but instead the "elements gallery" expands from the top of the window you are working in. It seems that the default now is to insert the chart into the worksheet that is currently open (something I never do, I always put the chart in its own sheet). So then you have to move it to its own sheet. That is still tolerable though annoying. But then I found that Microsoft have disabled the "size with window" command. The menu item is still there but does nothing and is slated to be removed. Trying to expand the chart myself by dragging its border resulted in a mangled mess. I'm going to have to go back to Excel 2004. Seems I'm stuck with Entourage 2008 though and I may as well use Word 2008 on my laptop and office computer. So I'm going to have to run Office 2004 and 2008 together. Trouble is my laptop is not recognizing my Office 2004 CD and unfortunately I already (stupidly) deleted it from my laptop. Hopefully, my office computer has no issues with the disk (my laptop has a temperamental CD drive).

Snork Maiden's Taxes 2008-9

I just completed Snork Maiden's tax return. As it is pretty straightforward and I have a spreadsheet set up from last year as well as last year's return to refer to it only took me 3/4 hour to do. See last year's figures for a comparison.



Last year's salary was much lower due to us only moving to Australia after the tax year started. Snork Maiden's non-salary income increased as her savings built up. Unfortunately, for the first time ever she owes money on her tax return :( I don't understand how this can be. 2/3 of the way through the year we started making salary sacrifice contributions to superannuation which should have lowered our total tax bill for the year. That means that tax should have been withheld at too high a rate for the first eight months of the year. I expected that to roughly cancel out with the tax due on investment income. But apparently her employer withheld too little tax all year.

Her average tax rate was 23.56%. Her marginal tax rate is 31.5%. This covers all taxes as there are no state income taxes in Australia.

Asset Class Update

Time for an update on recent asset class and target portfolio performance:



This chart is in USD terms with all investments as they would appear to a US investor without any currency hedging. Australian and international shares have seen the nicest rebound as might be expected. The Australian Dollar has also risen (this series includes interest as well as exchange rate movements) and hedge funds and bonds have performed positively albeit a lot weaker than stocks. Managed futures, real estate, and gold have seen a negative performance in this period. The levered portfolio consists of:

17% MSCI
30% Australian stocks
14% Hedge funds
14% Managed futures
10% US Real Estate
10% International Bonds
5% Cash

Then it is hedged so that 63% of the portfolio is exposed to the Australian Dollar and then 50% is borrowed against the equity to lever up the portfolio. That is our target portfolio. It has also bounced back nicely and is currently at the levels of late 2006.

This is what things look like for an Australia based investor. The hedge funds and managed futures are hedged into Australian Dollars but the other asset classes are unhedged. The target portfolio is the same levered portfolio exposed 63% to the Australian Dollar:



The impact of the GFC was offset by the fall in the Australian Dollar. The subsequent rise in the Australian Dollar has resulted in a loss in the foreign bonds, accentuated falls in foreign real estate and gold, and slowed the rise in foreign stocks. As a result the target portfolio that declined gradually into the GFC hasn't recovered much either yet. This is why I wanted to have only 50% exposure to the AUD but haven't managed to keep things that low.

Dividend Imputation to Continue

The head of the Australian Treasury Department, Ken Henry, said that his tax review will not abolish dividend imputation. Dividend imputation passes on credits for corporation tax paid by companies on profits earned in Australia to shareholders. Only New Zealand still has a similar scheme. Foreign shareholders are not supposed to be eligible for the credits and profits earned outside of Australia don't generate credits. The system ensures that there is no double taxation of profits as long as those profits are paid out as dividends. But if the company reinvests them and shareholders end up with capital gains then double taxation does result. Dividend imputation, therefore, introduces several distortions:

• Discouraging foreign investment in Australian companies as long as share prices reflect the credits that foreigners don't get.
  
  
• Discouraging investment overseas by both Australian companies and shareholders.
  
  
• Encouraging the payout of dividends instead of reinvestment in the business. Or encouraging debt as a source of investment after paying out the profits.

Despite all this I like dividend imputation as an investor, especially when using margin loans. Margin interest can be deducted from the value of dividends resulting in surplus credits that can be used to offset tax on other income. If you had enough investments that paid "franked" dividends you could avoid paying any income tax at all.

Final Hedge Fund Performance for July 2009

HFRI: 2.62%
Credit Suisse/Tremont: 2.54%

Inefficient Markets

With all the talk about the supposed negative effects of the "efficient market hypothesis" that supposedly caused the GFC it's worth pointing out how the markets are often blatantly inefficient. Oceania Capital Partners (previously Allco Equity Partners) has a big stake in iSOFT (ISF.AX). Based on my calculations it is currently worth $A3.10 per share. The company also had 43 cents per share of cash as at 30th June and 24 cents of "realisable securities". Liabilities were 7 cents per share. That totals $A3.70 per share. Yet the stock trades for $A2.77. We'd have to believe that their two private equity holdings have a negative value of almost a dollar a share instead of the $A1.25 per share that they claim for that to be a rational price. Yeah, we should probably take something out for the cost of future management fees but still the stock trades at a ridiculous discount.

I've persuaded myself not to sell any yet :)

Fund Purchases

I just put in a bid to buy 2000 shares in the Challenger Infrastructure Fund (CIF.AX). The annual results came out and they seem OK to good to me. This will take our holding to 5000 shares which is 2% of net worth. The NAV is $A2.89 per share and the share price is $A1.59. This will reduce our borrowing capacity by less than the cost as the fund is marginable with CommSec. I'm also thinking of adding to our holding in the Aurora Sandringham Dividend Income Fund (AOD.AX). I received a letter to buy more units as an existing shareholder without paying commission direct from the fund. Their strategy has held up well through the GFC. The fund has a low correlation with my portfolio (0.14). I'd look to move that one towards 2% as well. Eventually, some of our other alpha oriented single-manager funds are going to have to come down towards the 2% mark I think. OCP.AX, CAM.AX, TFSMX, and PMC.AX are all above 2% of net worth currently. I'll be prepared to keep TFSMX and PMC.AX at 3% or so or more as these managers have proved themselves through the GFC to be pretty robust. I'm also thinking of doing some buying in my US based account soon too.

What People are Looking for on Moomin Valley?

From search terms provided by Google Analytics.

EAIT Withdrawal Offer

In the ongoing Everest Financial Saga the next event is the EAIT withdrawal offer. Everest will allow investors to withdraw part of their investment in the EAIT fund of hedge funds that was once listed on the ASX. Like many unlisted hedge funds you cannot redeem units any time you like from the fund but only at specific windows and only then in specified amounts. This is due to lock-ups in the underlying funds. This is an additional early withdrawal offer in addition to the previously announced December 2009 withdrawal. However, any withdrawal you make now in September will be deducted from your December 2009 maximum withdrawal allocation. The maximum number of units you can withdraw is 22% of your holding. A decision must be made by 7 September. The September offer is at a 5% discount to NTA while the December offer is at a 7.5% discount.

EAIT is currently our biggest hedge fund holding as shown in this table of shares of gross assets:



Any fund that engages in hedging exposure to the stock market is classified as a hedge fund here whether the manager classifies it as such and whether the manager receives performance incentives or not. Our total hedge fund allocation is below our 14% target. Whereas TFS, Hussman, and Platinum are all single manager funds, EAIT is a fund of hedge funds invested in a variety of strategies. Our biggest exposure to a single manager is Platinum. Given that the stock market is beginning to recover and we don't have a need for cash I'm inclined to at least wait till December and probably longer. I don't see why we should redeem units below NTA. Offers in coming years will be at NTA.

There is also a 7.6 cent a share income distribution to be paid in September. I'm really not going to be able to do my 2008-9 taxes until the last minute I think.

P.S.
EAIT has reduced there leverage to 31% and so our exposure is lower than in the above table and our total hedge fund exposure is down to 12.6%. It's time to look for new hedge fund investments :)

Spendthrifts and Tightwads

Snork Maiden and I are complementary in spending attitudes to some degree. I am more "tightwad" and she is more "spendthrift". On the other hand, she is more frugal in some areas where I am willing to pay for convenience. Overall though I don't think our attitudes are that far apart - generally we can compromise.

Research Discussions

I had the meetings with the potential collaborators and they went well though there are no definitive outcomes yet. The first meeting I found that though we are both interested in similar questions our approaches to how to address them seem a long way apart. We'll continue to discuss things but not sure if much practical will come out of it in the long term. The second meeting with the more senior (in position) person I think went well. Most of the time it seemed like he was telling me about his research. He's happy for me to use his model and for a student in his unit to work with me on it potentially. Looks like I can get involved with his research network and maybe down the road submit a proposal (to the government research agency) to be located in his unit which is where really the only program in my area in the country really is located. This seems to make sense, but I'm not sure about the politics of the whole thing. I'll have to continue to take it step by step. In the next couple of days I want to improve my proposal further and then I really need to get back to work on the project I'm supposedly being paid to do. I'm going to have to do that as full time as possible from now on.

Psycho-Economic Environment in Australia

Following up on the comments on a recent post things feel a lot different here than in the US.

EDIF

In the ongoing Everest Financial saga, the "direct investments" in the EAIT fund of hedge funds is being separated out into a standalone fund as of 31 July. 62% of this new fund is invested in Babcock and Brown European Ports Investments and the other investments are also in infrastructure or real estate. Therefore, I'm classifying this as a real estate investment as well as a "passive alpha investment" and as the investment is in my understanding hedged I'm going to continue to count it as an Australian Dollar investment.

July 2009 Report

It was a great month. The MSCI World Index gained 8.84% in USD terms and the SPX gained just 7.56%. The Australian Dollar again appreciated against the USD from 80.54 US cents to 83.36 US cents. We gained 13.00% in USD terms (9.38% in AUD terms and 10.57% in currency neutral terms). Our spending was at the baseload level.

The following is based on the available data as a couple of funds as usual won't report till near the end of the month. As usual everything is in US Dollars unless otherwise stated.

We spent $3,173 ($A3,806), which is approximately our "baseload" level of spending:



Net worth reached $308k ($A370k). Asset allocation moved away from our target but there were no dramatic changes this month:



Australian stocks moved further above target while foreign stocks remain considerably below target. The target is a very long term target, I don't plan on selling Australian stocks soon, but I do plan to keep adding to foreign stocks as much as possible. We added to private equity investments (3i) during the month. The following is estimated performances for this month (net of forex movements) by asset class:



Oceania Capital Partners (formerly Allco Equity Partners) performed very nicely driving the private equity return. All stock classes did well. The above market returns this month boosted estimated alpha and beta. Alpha measured against the USD MSCI was 4.3% with a beta of 1.22 currently. Beta remains very high and will have to come down at some point:

Meetings Lined Up

I have meetings lined up now to discuss my research and potential for collaboration on grants with a couple of people next week. One of them is one of the top economists in Australia by any measure. Hopefully, something productive will come of it.

Hedge Fund Performance for July 2009

The HRFX gained 1.59% in July. Convertible arbitrage continued to outperform with a more than 6% gain:

The Recession Must be Over :)

Both of Snork Maiden's investment accounts - retirement and non-retirement - are now showing a profit. Given that the former started in November 2007 and the latter April 2008, that's not too shabby. The effect of dollar cost averaging... And Commonwealth Bank sent us a letter suggesting we increase our credit card credit limit from $A6,000 to $A10,000! Of course, I * took the opportunity, I can't see a downside (?).

* The account is officially in Snork Maiden's name but I do all the financial management in our household.

Unisuper Still Not Quite Right

So Unisuper finally managed to put me into the accumulation plan (defined contribution) but for some unknown reason 54.51% of the account is in the "Balanced" option and the remainder in the "Growth" option. I originally requested to be in the "Growth" option. Well actually it depends on which page on the website you look at. On a different page it says 100% of my account is in "Growth"

Another Paper Rejection

Had a paper rejected again today - this was the second attempt on this one. The good thing is that they only took 1 1/2 months to reject it, which is lightning speed in the economics world. One of the reviewers was clearly one of the same people who reviewed it at the first journal. His comments really don't make sense as everything he wants is already in the paper. The other reviewer was this time someone who seemed very knowledgable about the methods, which is good. Hopefully this will make the paper, which I am about to start revising, somewhat stronger. The first two journals I submitted to were in my specialised subfield of economics. After ending up with the same obtuse reviewer twice I am this time going to submit to a more general journal. It might help that one of the editors (based in NZ) is a coauthor of two of the papers I cite. Unfortunately, the journal is lower down the ranks in terms of how often its articles get cited, but that should increase my chances.

So, since trying to get back into academia since last November I've made six journal article submissions (five distinct papers). I've had three rejections and three are still in process. At this rate I'm going to be lucky to get anything published in 2010 even :(

Moominmama Report July 2009

July was another great month in the World's stock markets with the MSCI World Index gaining 8.84%. Moominmama gained 4.3% overall with the best gains coming in non-US equities. The US Dollar declined and these returns are measured in USD so it's not surprising. As you can see Sterling Cash gained 1.67%. The portfolio beta is estimated at 0.47 so this result is right in line with expectations. After losing 31% from peak net worth in June 2008 to the low in February 2009, net worth has bounced back by 23% which results in being exactly half way back to the top in Dollar terms.

On the other side of the world in Moomin Valley we gained something around 12.5%. A full report coming in the next few days. Our net worth fell 62% from the peak in May 2008 to the low in February 2009 in USD terms. We've now bounced back 68% from the bottom. In this case we're not quite half way back yet...

Canberra is Like Tuscany with Nicer Weather :)

Most Australians seem to hate Canberra and think it is terribly cold. They'd probably be surprised to learn that the average temperatures (daily high and low) in the coldest winter month are pretty much exactly the same in Canberra as in Florence (Firenze) in the heart of Tuscany, Italy. Our hottest summer month has about the same temperatures as Firenze's June, so we miss out on the hottest extreme. We also get less rain, particularly in the winter.

I was just writing an e-mail to someone in Italy who wished me good holidays (they were going on holiday for all of August) noting it was winter here. I said it was probably like northern Italy but I was wrong. It's cold there. Here it is more like Tuscany

Challenger Infrastructure Fund Removes FX Hedging

Challenger Infrastructure Fund (CIF.AX) announced today that it has closed its foreign currency hedges yielding a profit. As it is now unhedged and invested entirely outside of Australia (mainly in the UK) I will now regard this investment as part of my "global currency" investments (not AUD or USD). This is good as our AUD exposure is rising (though the investment is just 1.3% of net worth). The investment is included in our "real estate" investments and under the "passive alpha" category as I don't expect it to be highly correlated with the stock market in the long run.

Fellowship Program in Stasis

I just heard today that the fellowship program I was planning to apply to may not actually run again. If it doesn't I wouldn't be too surprised. Last November was the first year it ran and they won't announce the results till this September (Many grant programs here have similarly long processing times). They planned on giving out a surprisingly large number of fellowships over the next five years. So they may be rethinking that commitment of funding and maybe the quality of the first round of applicants wasn't as high as they had hoped for. I was told that the government minister responsible hasn't decided whether to run another round of applications or not. I'm going to meet with my research officer as soon as possible to discuss what opportunities I have.

Shopping my Proposal

We accidentally bumped into a former colleague who is now a professor in another department at my university while shopping. Actually, this guy was originally hired to replace me after I didn't re-apply for my job back in 2001. We then overlapped for a year as I searched for the position that eventually took me to upstate New York. Anyway, he agreed to take a look at my proposal. He already got back to me and says it has all the elements needed for a successful proposal: "It's in a key area, you clearly have published on the topic and there are important gaps that you identify that should be funded." I agree that these are the key things a proposal needs. They want to give money to people with good track records of doing research in the areas that are of interest to the funders. The bit about identifying gaps refers to discussing recent top level research on the subject and pointing out where it could be extended. A weak proposal would come from someone who doesn't have a strong track record in the area, shows that they aren't really up to speed on the debates in the area, and is anyway in an area that is somewhat peripheral to what the funders are interested in.

I still don't know if I am actually eligible to apply for grants in these areas. I'm having a hard time tracking down the liasion guy.

Anyway, I now have more confidence in approaching a big name person who might be able to collaborate and/or provide feedback. Hopefully, I can raise awareness that I am doing research in areas of interest whether I am eligible for a specific grant or not.

Some Funds in the Black

This month is shaping up as another good one with three trading days to go. Several of the funds we invested in in Snork Maiden's Colonial First State account have now returned to profitability:

CFS Geared Share Fund: $A190
Platinum International: $A131
Souls Small Australian Companies: $A72
Generation Global Sustainability: $A30
CFS Diversified Fixed Interest: $A80

Overall the account is still down $A260 but it is now worth $A15,291. So that's not too much of a percentage loss given what we've been through. We started investing in April 2008. I guess it's the power of dollar cost averaging.

I just got the annual tax statement from CFS, so soon I should be able to do Snork Maiden's taxes.

OK, I Exaggerated a Little...

When I wrote in yesterday's post that I'd need to have enough cash to buy a house to be happy to do so if my income was very uncertain. On a single slightly above average salary it's a bit of a stretch to afford to pay rent and live a nice lifestyle here for two people. At least we found that to be the case until I started my current job. You have to be reasonably frugal. Forget international travel and the like (remember our parents and most other relatives all live in the neighboring large continent). Paying a typical mortgage is out of the question. To get your housing costs down to the same level as paying rent you need to put down a downpayment of 50% approximately. So you do need $A250k for that purpose and after that you're living paycheck to paycheck more or less. So I don't really think this is still a very wise financial decision.

Of course if you have secure employment consisting of either two average salaries at least or one salary at twice the mean (say a full professor) then you can go for homeownership without too much concern. It might not be good economics, but if that's what you want to do you can. I'd still put down the traditional 20% and have cash reserves for repairs etc.

Houses are really expensive in major cities in Australia.

How Long Can We Live without Working?

Asked Snork Maiden today (at our current standard of living). If we don't make any big expenditures like buying couches or travelling we spend about $A4,000 per month. Half of that goes on rent. Our net worth outside of superannuation and retirement accounts is $A156,000. $A10,000 of that is our car. So the rough answer is 3 years. A couple of years ago it was nearer 5 years. I don't believe in the idea of a 6 month or whatever "emergency fund". The more savings we have the better. If we wanted to buy a house we'd need to make a $A100,000 downpayment probably (as houses cost at least $A500,000 around here). That's only leave us with $A40k in savings. As neither of us has a long term employment contract. We couldn't maintain the mortgage payments for long if either one of us didn't work or we both worked at lower salaries than today. Our salaries are near the mean for Australia, temp work or whatever will pay less. So we either need to have permanent contracts or really in my opinion enough is savings up front to buy a house outright, though we'd still buy it with a mortgage. The latter would make me feel much more comfortable with such a purchase...

Pension Funds, Endowments, and Us

I've been thinking whether anything needs to be done with Moominmama's portfolio and benchmarked the broad asset allocation against a bunch of pension and endowment funds:



UniSuper Balanced and PSS(AP) are the default choices for two Australian superannuation funds. The Future Fund is an Australian Sovereign Wealth Fund. CALPERS is of course the California Public Retirement system and then there is the average US university endowment and three Ivy League endowments. Excepting the Ivy's the average for the two US funds is very close to that for the three Australian funds: 42% equity, 23% bonds and cash, and 35% alternatives (hedge funds, real estate, private equity etc.). Retrospectively the Ivy's had too much in alternatives and too little in cash to meet their needs. Nobody though has as much as Moominmama has in bonds and cash. As I've often said, it's hard to imagine bonds performing as well in the future as they have in the past when they were boosted by capital gains due to declining interest rates since the early 1980s. She receives government pensions and even if she didn't she has many years worth of expenses in cash alone let alone bonds. Even if her medical costs rise I still think there is plenty of cash. Long term I think it'd make sense to head to say 30% in bonds and cash. Some time soon I think it would make sense to sell some shares in bond funds and increase other investments.

What am I Doing on the Investment Front?

I haven't posted much on investments recently. We're in recovery mode from the GFC and will likely be for a couple of years before making any really major moves or changes. The last new investment we made was AOD. We continue to invest $A500 per month in each of Snork Maiden's and Moom's Colonial First State accounts. These are diversified investments across Australian and foreign stocks, real estate, fixed interest, and in Snork Maiden's case hedge like funds. We also invest in our superannuation funds - Unisuper and PSS(AP). Again these are very diversified investments. Otherwise I have added some extra money to Snork Maiden's CFS account and paid down some of my margin loan with CommSec. I also have bought back a couple of investments that I had to sell in margin calls for less than I sold. One is 200 shares of 3i - the UK private equity firm and the other is a $A5,000 in CFS's Global Resources Fund. The latter isn't quite all the units I sold but good enough for the moment. We are underweight foreign stocks so these investments make sense. I expect there'll be a little more of this kind of thing going forward. Our automatic investments are increasing out foreign stock exposure in any case.

Wikinvest Data Platform

Wikinvest have a new finance data platform. It looks pretty nice in terms of graphics etc. though they exaggerate how much this improves things over platforms like Yahoo. Yahoo does have a competitors analysis as well as an industry page that provides some context of how a company compares to others in the industry. To tell the truth though I mainly have used it just to find alternative potential investments.

1 July 2010 Planned Start Date for Post-FIF Regime

The Australian government hopes to have new foreign investment rules in place by 1 July 2010. This will include new more targeted anti-tax-avoidance rules to replace the abolished FIF rules.

Final Hedge Fund Performance for June 2009

Final hedge fund returns are now in for the month and they largely confirm the earlier HFRX results. In other words, performance was flat overall. HFRI returned 0.23% and Credit Suisse/Tremont 0.43%. Managed futures and systematic trading did poorly (as did short-bias). Convertible and related arbitrage strategies did best.

Next Steps in Job Search/Creation

As I commented on the last post, I didn't get the job I interviewed for on Monday in a major Australian city. The chairman already phoned me on Tuesday to tell me. They decided to go with people who could cover their areas of particular need in teaching (at the graduate level). At first he said they liked everything else about me. But when I said I wasn't surprised because I think I messed up the presentation he then said that I was right that it was rushed and confused people and they didn't get a strong idea of what I was doing though they were impressed that I was energetic, enthusiastic, and knowledgable.

Back here a friend/colleague has been talking with someone in a position of authority to see what can be done about creating a position for me or extending my current position. This would be on the basis that I could raise money from students or grants in this position. While junior teaching positions are almost always advertised in academia that isn't true of research positions (including my current position) and to some degree more senior positions. As in other industries, if you know the right people you have some opportunity to be creative in this regard.

I'm sitting in the airport terminal on my way back from my interview here today. The process was very traditional on the British model of academic interviews - presentation, lunch with other candidates, and panel interview. The American model has no panel interview and involves many one on one meetings with faculty or groups of graduate students over a two day period. My previous interview in Canberra was a hybrid of the two models. Those guys recruit heavily on the American market. I met a new faculty member at lunch who just completed a PhD at a US university, but the department can't be systematically trying to recruit new PhDs from the US. Three candidates were interviewed today. The other two both came from New Zealand. As they told me they will complete the interview process today that probably means, given how fast this process has moved, that there are only three candidates for two positions, unless there are also internal candidates. The reason for the huge rush is that they have two more searches to conduct this semester.

My presentation was OK-ish - I tried to cover too much stuff and due to a misunderstanding on the timing we ran out of time for questions at the end. There were questions along the way though, as is usual for economics seminars. People seemed skeptical which wasn't surprising as I tend to do unorthodox things. And I had maybe the top guy in the field in Australia sitting in the front row and a specialist in some of the techniques I use in the back row (and on the selection panel). The panel interview went better. I didn't have any problems answering their questions or asking them questions.

I should hear today or tomorrow. If I get an offer we'll have to figure out how to move Snork Maiden workwise. I didn't raise that at the interview because I don't want to put any obstacles in their way before they make a decision.

Another Interview

I just got an e-mail inviting me to interview on Monday for the job I applied for last week. This is one of the top departments in the country. The university is on this list. I've never seen an academic job search move that fast. It probably won't be much work to update one of my presentations. I've asked for more details of what kind of presentation I need to give. I also want to be back home for a local one day conference on Tuesday. We'll see what can be worked out.

HFRX Performance for June 2009

The HFRX Global Hedge Fund Index was flat for June, returning 0.04%. Macro and 'Systematic Diversified" did poorly losing more than 3%, while convertible arbitrage and event driven strategies did relatively well. HFRX is, however, based on a small sample and may not reflect the performance of the broader indices which will be available around mid-month.

Phoned Unisuper

So I phoned Unisuper and told them I'd sent the form in twice to switch to defined contribution (or "accumulation" as they're calling it) and I'm wondering why I'm still in the defined benefit scheme. The guy I got on the phone told me that everyone starts in Defined Benefit (so they just ignore the initial membership form despite it asking which plan you want to be in) and that they got my switch form in May but "it takes a long time for the switch to happen" and he doesn't know why that is.... He said it was "fair enough" that I was wondering what was happening. So I suggested I'll check in another month whether the switch has happened. Which he said "makes sense".

June 2009 Monthly Report

The following is based on the available data as a couple of funds as usual won't report till near the end of the month and as 30th June was the end of the financial year here in Australia we're waiting for the final reports from Australian mutual funds which should improve a bit the data reported here due to the distribution of tax credits - even though there were big capital losses this financial year most large companies continued to pay dividends with the attached "franking credits" for Australian profits or "foreign tax credits" from non-Australian firms. As usual everything is in US Dollars unless otherwise stated.

The MSCI World Index lost 0.52% in USD terms and the SPX gained just 0.20%. The Australian Dollar appreciated at a slowing rate against the USD from 79.91 US cents to 80.54 US cents. So foreign exchange rate changes did not have a big impact on this month's results. At one point during the GFC the Aussie fell to 60 US cents. That was probably undervalued and today's exchange rate is likely a little overvalued. We gained 3.67% in USD terms (2.85% in AUD terms and 3.07% in currency neutral terms).

Performance was strongest in Australian stocks both small cap (ror = 6.09%) and large cap (3.86%). Commodities (estimate = -3.7%) and real estate (-3.27%) probably performed worst - I only have very partial data on hedge funds at this point. Alpha measured against the USD MSCI was 3.6% with a beta of 1.14 currently. Though performance for the month was above the risk-adjusted expectation.

We spent $5,843 ($A7,255). Major expenditures were new couches ($A3,054) and a suit ($A683). The couches arrived today and they are very nice. So apart from that we only spent $A3,500 which is good (as our rent is $A1,955):



After a month where Snork Maiden's employer managed to stuff five contributions into her retirement account this month they only managed one. They are very erratic.

Net worth reached $270k ($A336k). Asset allocation moved away from our target but there were no dramatic changes this month:



Hedge fund allocation increased due to buying AOD and private equity allocation fell due to the AEP capital return.

Sorry that there are again no pretty charts in this month's report. I don't fell like posting them until we have a substantial rebound in net worth to report or something dramatic happens. At this point we're making a nice but moderate rebound from the worst of the GFC inflicted damage. In AUD terms net worth is currently 36% below its all time high in August 2007. That turns out to be exactly the average financial loss suffered by Australians from the GFC.

Update on Carbon Planet

Last year I wrote about a company called Carbon Planet that was raising funds. I didn't like the look of the information provided and decided not to invest. Now an anonymous commenter has updated me on Carbon Planet and it still doesn't look good. What kind of CEO just says "he isn't having this conversation"?

Unisuper "Fail" (so far)

They still haven't switched me to defined contribution despite me requesting this on my initial application and then sending the switch form in again, weeks ago. I'll phone them tomorrow and investigate.

Moominmama Performance June 2009

Moominmama had a 1.06% gain in June while the MSCI all country stock index fell 0.52% (beta to this stock index is estimated at 0.47). US stocks were the worst performer closely followed by commodities while bonds and hedge funds did well. Part of the bond performance is due to the rise in Sterling, which along with Asian and Brazilian stocks were solid performers. The loss in USD cash is due to investment management fees being charged in US Dollars on one of the accounts.

Moom and Snork Maiden's rate of return is currently looking to be about 3.7% due to the strong performance of Australian stocks this month.

Career Update

Am applying for another academic position here in Australia. I only saw it advertised this morning and the deadline is Friday! The rank is Associate Professor which is I believe the appropriate rank for me (I'm currently at the equivalent of Senior Lecturer level) and they are looking for two people. The preferred specializations are not in my area but they encourage all areas of economics to apply and the economist I most admire in Australia is on the faculty there.

I'm still also working on developing a grant proposal but the deadline is still way off on that and it still isn't clear if I'm even eligible to apply. Also I have started a professional blog with the aim of attracting more traffic to my professional website and getting more people to download and read and cite my papers... As a result there'll be a bit less general economics content on this blog. But I'll still post personal finance and investment stuff on this blog.

Endowments Update

Barrons' has updated the portfolio allocations for Yale, Princeton, and the average US educational endowment:



Compare these to a previous table they produced. Yale's allocation has shifted very little so maybe it isn't very up to date. Princeton and the average endowment has been forced to increase the allocation to private equity and real assets and reduce the allocation to stocks due to the moves in the markets.

Income Replacement Rates of Mandatory Retirement Schemes

The table is from a paper by Richard Disney presented at a conference on taxation held as part of the Australian tax policy inquiry. It shows the percentage of income replaced by mandatory retirement programs at different levels of average earnings. The Australian data includes both the means tested age pension and the 9% superannuation guarantee! The two together are estimated to replace only 52% of average earnings. Australia's outcomes are very similar to those of the US which only has one mandatory program: social security. With Australia's government worrying about the tax benefits provided to superannuation and raising the age of eligibility of the age pension to 67, you can see just how unsustainable the US program must be. I won't even talk about some of the European schemes :)

Bottom line: You probably need to save more than the 9% superannuation guarantee.

Couches

Today, after much searching, we finally bought a couple of couches - a two and a three seater. Yes, they are leather but not the ones in the picture - I couldn't find a picture of exactly the ones we got. Over the last month we've seen the price decline from a deal of about $A4,000, through $A3,500, to $A3,000 today for the two couches from the showroom floor. We could still have ordered some at $A3,500 but decided that these two suited us. They are some of the more comfortable couches we've tried. They won't actually fit in our apartment in a traditional L-shape configuration - not with room for other furniture or for people to get through, but we won't always live here and we've figured a couple of different set ups that will work. Up till now, we've only had the one futon sofa we brought with us from the U.S. It's quite nice but not so great for sitting on for extended periods and it'll be good to have more seating for guests.

We'll Call You (or Not)

I haven't heard back from the headhunter so I guess I wasn't shortlisted for an on-campus interview. The department I interviewed at before here just advertised four senior positions. I doubt it makes sense to apply after I was rejected for a more junior position but I guess that means the local hiring freeze is off.

George Friedman Thinks the Iranian Election was Fair!

My opinion of him and Stratfor sank even lower.

Conspicuous Blogging

An interesting article about changes in the ways people are signalling status - a switch from conspicuous consumption of material goods to online signalling through the number of Facebook friends say. I'm not sure quite how important this is as a trend in quantitative terms but there is certainly something in it. It fits in with similar news from Japan. Of course those of us in academia have long signalled our status through publication, citation, winning research grants etc. and the same has been true of other professions such as art or music. Conspicuous production rather than consumption. The paradox is I'd love to tell you right now about an article I wrote where I referred to this issue 12 years ago. But I can't without revealing my identity. An anonymous blog is very unconspicuous production in it's nature. Maybe I should go down the road of other non-anonymous academic bloggers :)

TFS Market Neutral Fund Closes to New Investors

The TFS Market Neutral Fund which I've often blogged about and am invested in, is closing to new investors. The fund's assets stand at around $US600 million. It's not a complete closure. Financial advisers and 401k, 403b plans etc. who have clients already in the fund will be allowed to open accounts for new clients. And, of course, existing investors will be allowed to add to their accounts. So the aim is to slow down the influx of capital. The fund has doubled in size in the last year I believe.

You have till 30th June to invest in the fund if you are not already invested.

HFRI Performance May 2009

HFRI came in with a 5.58% return for May - one and a half percentage points more than Credit Suisse's estimate - and positive returns for all sub-categories.

Face to Face Interview

So I went out to the airport today to meet the partner of the recruitment firm at the Qantas Club (=Lounge). I think the interview went well and that there is a good chance he'll put my name forward at the meeting with his client on Monday where the short-list of candidates to be interviewed on campus will be composed. The taxidriver on the way there told me he studied accounting but the economics part was hard. I told him I found it hard the first year or two as well, the concepts took a while to sink in.

Credit Suisse/Tremont Returns for May 2009

Credit Suisse/Tremont hedge fund indices have now reported for May. They are reporting a 4.06% gain for the month, which they say is the best month for hedge funds since some time in 2000:



HFRX reported somewhat lower returns. HFRI is still to report. Most strategies did well apart from short bias. Managed futures were rather mediocre.

By the way, I just realised that my last post about the suit was my 1000th!

Suit

I bought a suit for my interview today. Only the second suit I've ever bought. We went to Myer because there are sales on. But the suit department was a bunch of racks behind the escalators there and nothing appealed to either Snork Maiden or me and there was no salesperson in sight. So we headed to David Jones next where there was a salesperson in the much larger suit department. I liked all the lighter colours and Snork Maiden darker ones with stripes preferably. She soon despaired of the process. So I phoned a friend who lives nearby whose taste I trust and I know has bought lots of suits. He came over and his first piece of advice was: "There are only two colors: Charcoal and navy blue". "What about lighter greys?" I asked. "You won't be taken seriously". Pretty soon I was trying on a couple of suits by Anthony Squires (the only ones in my size - I'm 6' 3" (1.9m) and around 108kg (240lbs)). They were both comfortable and both were originally priced around the $A1200 mark. The first one I didn't like so much and only had 10% off. I preferred the second one and it was going for $649. That's the one we bought. Alterations which should be done by Monday afternoon will cost an extra $34. We went and had some coffee with my friend and invited him to dinner this evening. Preparation now under way...

Coldest Day in 43 Years

A couple of nights ago it hit -6C here in Canberra which is near the coldest I've seen here (-7C). The record low for Canberra is -10C. And then today was the coldest day in 43 years with the temperature reaching just 4.1C at Canberra Airport and only 2.6C in Tuggeranong. I felt like I was back in America today :) Though of course the bad days in Troy NY were when it wouldn't get above -18C which was once or twice (and that was the coldest night time temperature I remember from Boston where I lived in 1990-93 and 1995-96).

The Phone Interview

The phone interview with the headhunter went well. It started with me asking questions about what the job really is. He said that they basically just posted a standard description for a full professor though this job is somewhat different. It is a research chair and may include teaching in a masters program. The direction of research sounds a lot more applied than I would really be comfortable with. If we go to another level of interview I think I will tell them that they need a mix of basic and applied research if they want to have a good research profile in terms of publication and citation and getting grants from more prestigious sources. If that's not their goal it probably doesn't match me well. The job sounds less daunting than the description that was sent to me which sounded like it would solve all of their problems.

After that he went through my CV and got me to expand on each item. That included explaining what I did in 2008 and more about the nature of my current position. He seemed to be OK with my explanations. "So if you had stayed with your Australian employer of 1996-2002 you'd probably be a full professor now". I said yes either Associate or Full and if I'd stayed with my US employer I would be seeking promotion to full professor about now. So he said he sees merit in me as a candidate and he might be in town in the next couple of weeks and would like to meet for a chat then. I should also send him Snork Maiden's CV...

Now I need to go buy a suit. My current one doesn't fit any more. I bought it in 1996 for an interview at Ohio State University. I had it reduced in size in 1999 after I lost a lot of weight. But now I've put most of that weight back on... I could get it let out again I suppose, but having more than one can't hurt?

Preparing for Interview

I've been preparing for my phone interview with the headhunter tomorrow morning. I'm not sure what to expect as I've always been interviewing with the people I will actually be working with before. I did some searching on the web about how to deal with such interviewers and came up with more tips from headhunters about how to interview with employers. The little I gleaned suggested headhunters are more likely to throw off the wall psychological questions and ask what you would do in different situations. Makes sense, because they can't ask you anything technical. Academic interviews at research universities are mostly technical discussions of your research with a few questions thrown in about what you would like to teach. At least at more junior levels. Anyway, I've done a quick analysis of the research weaknesses and strengths of the department in question as I've been told this position is to some degree to be a research coach/mentor/coordinator. They've mostly been pretty busy publishing research but generally they publish it in low ranked journals and don't get cited a lot. Maybe this is a product of the Australian government's past policy of rewarding research quantity over quality. When I worked here before in 1996-2002 universities received base research funding according to a formula that awarded one point to a refereed journal article and half a point to a book chapter in an edited book. It didn't matter how prestigious the journal was (the rest of the funding was based on how many PhD students they could graduate). This is still the case for the smaller part (10%) of research funding based on publications. The largest portion (60%) is now allocated on the basis of competitive research grants won. My impression is that in the near future the system will shift towards assessing research on the basis of citations. This is a positive direction.

Government Job?

I heard yesterday about a position in a government department here doing more or less on the public policy side what I do in academic research now. They want someone immediately as an internal transfer in the public service or on a contract basis, so my guess it is to replace someone. I have my current position till the end of February... The e-mail said that they may be wanting to hire more permanent positions in the near future. So I'm thinking to e-mail the guy in charge of the section who sent the e-mail and whom I know reasonably well and say I may be interested in those positions and that he should keep me in mind? My first preference is for an academic research oriented position. This would be a second best from my perspective as a long-term situation but it could be interesting as a shorter-term thing. In which case I should apply for the current position. But I don't need a job now and am in a contract to deliver something to my current sponsor. This whole job timing thing is a dilemma....

May 2009 Monthly Moomin Valley Report

I finally worked out the fault in my accounts: a minus sign instead of a plus sign in front of the gain for Platinum Capital for the month! The following is based on the available data as a couple of funds as usual won't report till near the end of the month, when I'll give a final asset class performance report. As usual everything is in US Dollars unless otherwise stated.

The MSCI World Index rose 10.08% in USD terms and the SPX rose 5.59%. We gained 8.84% in USD terms (-0.34% in AUD terms zand 2.73% in currency neutral terms). The Australian Dollar again appreciated strongly against the USD from 73.17 US cents to 79.91 US cents.

Performance was strongest in Australian small cap and foreign stocks and weakest in real estate and private equity. Alpha measured against the USD MSCI was 2.1% with a beta of 1.11 currently. Though performance for the month was good in USD terms it was below par in risk adjusted terms. The fitted rate of return from the model was 11.4% while we only returned 8.8%.

We spent $3,570, which is surprisingly low given that we and the Snorkparents went to Queensland in May. Most of the Queensland expenditures had already been incurred up front though. In Australian Dollars we spent $A4,468. Since Snork Maiden and I have lived together there have only been six months with lower spending (14 with higher spending). So it really is near the low end:



Non-investment income was boosted above our regular salaries by a $A900 stimulus payment from the Australian government and $A1,200 in cash that the Snorkparents insisted on leaving with us rather than taking back to China to exchange...

Net worth reached $261k ($A327k). Asset allocation moved away from our target but there were no dramatic changes this month:



I plan on trimming the allocation to Australian large cap stocks if and when the stock market recovers further while increasing allocations to managed futures etc. In the meantime we are trying to rebuild our allocation to foreign stocks from the bear market devastation we suffered. Leverage again reduced a little mainly due to paying off $A2,000 of my CommSec margin loan as well as bit of reduction in credit card debt and positive investment performance.

Tianjin Eco-City

We also visited the area of the planned Tianjin Eco-City on our trip to China last year. We saw even less of the site than these guys did. We did see lots of non-specifically Green development in neighboring Tanggu. Snork Maiden's father knows a bunch of people in the planning department there.

Aurora Sandringham Income Trust

I just bought 5000 shares in AOD.AX at $A1.10 a share. This used about half my available margin. The fund is not marginable with CommSec. I've long wanted to invest in this fund and brought forward the investment due to the CommSec offer of free brokerage. Eventually, I plan to reduce my holdings of other listed funds like Clime and Platinum Capital and this move is aimed at increasing diversification.

I'm classifying this as a hedge fund investment as the fund hedges its stock market exposure. I'll provide more details about this investment soon.

The picture is of the Queen's palace at Sandringham in Norfolk, UK.

From Croesus to Sirius

The news is coming thick and fast this morning. Croesus Mining is to be renamed Sirius Resources and become a base metal explorer rather than a gold explorer which once was a gold miner. There will be a capital raising via private placement. I own 2666 shares which were valued at less than 2 cents each prior to this announcement. The placement is at 0.85 cents - about half price and will increase the shares on issue by 200%. At the same time Croesus is acquiring the nickel assets of a company called Apex Minerals. Apex will receive 67 million shares and 600 million options with an exercise price of 3 cents. Mark Creasy (self-styled (?) "prospector of the century")who currently owns 45% of Croesus and some fraction of Apex will receive 267 million shares. The management of Croesus is also being changed.

The image shows the binary system of Sirius. Sirius A is the brightest star in the sky as seen from Earth. Sirius B is a white dwarf which can be seen at lower left.

IPE Placement and Rights Issue

IPE, a private equity fund of funds listed on the Australian Stock Exchange placed around 6 million new shares with a fund manager for 19 cents each and announced a 1:1 rights issue at 17 cents. The current share price is around 30 cents while net tangible assets are supposedly 84 cents per share. I had been looking to double my position anyway in order to recycle the capital return that Allco Equity Partners will be paying out and rebalance my private equity portfolio. It's good I didn't buy more shares at a higher price... on the other hand this announcement seems to have pushed up the share price, so maybe I should have... I will participate in the rights issue.

The equity raising will be used to pay down existing debt. The fund has negotiated a new $20 million line of credit with National Australia Bank contingent on the equity raising (which is underwritten). The new loan will be used to meet future expected cash calls from the private equity funds that have already been invested in. I suppose, originally they expected to meet these using distributions from other funds, which in the current environment have dried up.

Hidden in the announcement though is a plan to eventually liquidate the portfolio. Of course this is subject to shareholder approval. This would be a pity. I'd prefer them to delist as EAIT has.

P.S. 10:52am
IPE's price is now down on the announcement.

CommSec Special Offer

Commonwealth Securities are offering up to $A500 of free buy trades on a CommSec margin loan if you make the purchases before 30th June. The offer is a little odd, in that you won't be reimbursed until August. I only found out by reading the letter they sent me announcing the new portfolio LVR. As I already knew about portfolio LVR, I'd ignored the letter until today. Seems that the offer applies to existing loans as well as new ones.

I'm having a hard time reconciling my accounts this month and have put them aside for the moment. I can't figure what is wrong but a residual amount (the difference between two ways of computing investment profit), which should equal net interest and other investment fees for the month is out by more than a thousand dollars. There are a couple of other discrepancies. I'll come back to it sometime and report then.

Headhunting Progress

So I spoke with the "senior associate" from the headhunting firm that contacted me yesterday. She tried to downplay the rather ambitious job description and selection criteria, which make it seem like they want someone to solve all their problems, some of which I thought would be the role of the department head. She confirmed what I thought that there really aren't any people in Australia that specifically match the field they are interested in hiring in who have a sufficient academic track record. There are plenty of people working in industry in this area. The courses I can find online tend not to be offered by economics departments. They're in engineering schools. So while stating one area of interest they are trying to recruit people in related areas like myself. The next step is speaking to one of the partners of the recruitment firm next Friday.

HFRX up 3.15% for May 2009

HFRX - Hedge Fund Research's daily hedge fund indices based on a small sample of funds - was up 3.15% for May. By comparison, MSCI World Index was up 10.08% and the S&P 500 5.59%. As you'd expect, therefore, equity related strategies performed well. Macro and diversified systematic (which seems to include managed futures) performed poorly. As usual, these are the first hedge fund results for the month - other indices may produce different figures.

Headhunter Calls

I got a call from a "headhunter" today. That's a first for me, I think. The position is a full professor at an Australian University. They seem to think my profile fits the position though they'd need a pretty wide definition of the position if I'm going to fit in it. Well, it can't hurt to get more information. There are other academic jobs out there being advertised but I'm either under or over qualified or the fields within the discipline they have a preference for do not include mine. At this stage I don't plan to apply for jobs unless they are a good fit or are here at this university (where there are none at the moment). It's the same conundrum I faced in trying to relocate in the US. I'm overqualified for lecturer/senior lecturer positions (= assistant to junior associate professor in the US) which are most commonly advertised. But I'm probably underqualfied for full professor positions where they involve a signficant leadership/management role. And I'm not keen on that role. And those are the second most likely to be advertised. There aren't usually many ads for "Associate Professor" (=senior associate prof to junior full prof in the US).

Another Review of Taleb

I wrote a very short review of "The Black Swan" a little while ago. Here is a good but very long review of Nicholas Nassim Taleb. A summary would be: "Taleb is unoriginal when right, otherwise wrong (especially about option pricing), and a dilettante/crank".

Unisuper & Civic Video

Another two weeks on and Unisuper still haven't transferred me to the defined contribution scheme. Will I need to send in the form again?

Yesterday, I managed to lose a DVD we'd borrowed from Civic Video. I tripped over in the street and it ended up flying out of my coat pocket and down a storm drain! I phoned the store immediately and they told me to go buy one at JB HiFi in the next two weeks and bring it to them, "because that will be cheaper". There is something weird there economically, that it is cheaper for me to buy one in a retail store than for them to replace it themselves and charge me?

Luckily my wallet and keys were inside zipped/velcroed pockets on my cargo pants :)

Most Expensive U.S. Suburbs by State

Business Week has a list of the most expensive U.S. suburbs in each state. What's stunning from an Australian perspective is that in many states the most expensive suburbs are far cheaper than the median prices in all major Australian metropolitan areas.