US Stocks
By John Schroy, on May 31st, 2006 |

The Sarbanes-Oxley Act of 2002, by discouraging companies to go public, will exacerbate the shortage of equities, with a negative effect on the US stock market, although this was not the intent of its authors. Poorly drafted, ill-conceived, and unfair this law does little to protect investors.
Morningstar ratings
By John Schroy, on May 28th, 2006 |

Mutual funds are sold primarily on the basis of ‘performance’ measured by historical ‘total return’.
The famous Morningstar ’star’ rating system is based on ‘total return’, in this case ‘risk-adjusted total return’ relative to funds of the same asset category.
A general’s stars are a clear indication of rank. People presume that ‘five stars’ are better than ‘three stars’, just as they presume that a ‘five star general’ is higher ranked than a ‘three star general’.
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