Tag Archives: Barron’s

still majoring in mismanagement

Last fall, I blogged about possible ways to disrupt and improve our vastly overpriced and underachieving higher education system. One of my bright ideas went as follows:

[T]here’s no reason [Harvard] shouldn’t build more campuses in other locations, increasing enrollment even more. If its product is so great, why not scale it out?

Fast forward to this week when I opened the latest Barron’s and discovered that Harvard’s biggest rival is already doing just that:

Yale University has done something that no other Ivy League school has attempted: built a new version of itself halfway around the world, in Singapore.

I believe we’ve got things backwards in this country when it comes to higher education. In my opinion, a university’s reputation shouldn’t be based on how exclusive and expensive it is–that is, how much it costs and how few young people it educates. I think we should reverse that equation and judge our elite institutions by how many quality educations they provide, and at what value. Yale’s experiment in Singapore is a good first step in the right direction (even if it is in China), but it’s not addressing the biggest problem in higher education today:

It costs too damn much!

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bad connection

[Note: this post originally appeared on the CFA Institute’s Enterprising Investor blog.]

Recently, Barron’s ran a short item on New York City’s plan to convert more than 6,000 remaining pay phones in the city into “digital kiosks” that emit Wi-Fi signals and contain charging stations for mobile devices. I’m sure most readers had a similar reaction to mine: “Wow, there are still 6,000 pay phones left in New York City?!” But that’s not what made the article interesting — and potentially valuable to novice and professional investors alike.

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green shoots

We are definitely living through the financial equivalent of the steroids era on Wall Street, with celebrity fund managers jacking up their assets under management and posting (allegedly) too-good-to-be-true returns. But beyond the ego-driven corruption of places like Manhattan and Greenwich, there are hopeful signs that things might be getting better in my industry. Not surprisingly, two of the best examples of this trend come from a place regular readers of this blog know I am quite fond of: Texas.

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is it time to buy big cap tech?

Way back when I started managing money in the 1980’s, technology company stocks were revered by institutional and retail investors. The perception was that tech had a much better growth outlook than the overall market. Not surprisingly, tech stocks sold at premium valuations, often twice the price-earnings ratio of the overall market. Back then, and into the 90s, technology companies rarely paid quarterly dividends, and only a handful had stock buyback programs. Investors were content to let them reinvest cash in their businesses. But after the dotcom bubble went supernova, tech valuations crashed and stayed depressed for a long time, even as the strongest survivors of the meltdown grew fantastically and consolidated their holds on their respective sectors.

Despite this trend, I stayed away from big tech stocks like Apple and Cisco and Oracle. After the collapse, I was gun shy, and I’ve historically been suspect of famous stocks with massive market caps. They’re just too heavily covered for comfort. Every analyst and trader from Berlin to Beijing pores over every syllable of every statement they issue. And as the old saying goes, “When the microscopes come out, returns get microscopic.”

But I think it might be time for me to join the herd.

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