8 Fascinating Reads

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Happy Friday! There are more good news articles, commentaries, and analyst reports on the Web every week than anyone could read in a month. Here are eight fascinating pieces I read this week.

Things change fast
Blockbuster is shutting down its 300 remaining U.S. stores. Quartz gives a rundown of what the video rental chain was not too long ago: 

1992 -- Blockbuster is the undisputed video rental leader, with over than 2,800 stores worldwide. The company's growth is driven by acquisitions of other retailers such as Britain's Ritz and US chains Major Video and Erol's Video.

1994 -- Viacom buys Blockbuster for $8.4 billion.

2000 -- Blockbuster takes in almost $800 million in late fees, which accounts for roughly 16% of its revenue, according to the Associated Press.

2004 -- Blockbuster is at the peak of its powers, with about 9,000 stores globally

Jim Sollisch writes a great piece in The New York Times on financial priorities:

My friend, who has everything, is working his tail off, making maximum contributions to his 401k and buying rental properties, so he can afford to have the life of someone who has none of the trappings of success.

Then I thought about what I want to do when I retire. My plan is pretty much the same as my friend's. Basically I want to do what I did when I was in my 20s, before I "succeeded." I want to write novels and teach part-time at a university. And travel, which I don't have time to do now but managed to do when I was young and poor.

Nobel Laureate economist Robert Shiller asks if economics is a science

Critics of "economic sciences" sometimes refer to the development of a "pseudoscience" of economics, arguing that it uses the trappings of science, like dense mathematics, but only for show. For example, in his 2004 book Fooled by Randomness, Nassim Nicholas Taleb said of economic sciences: "You can disguise charlatanism under the weight of equations, and nobody can catch you since there is no such thing as a controlled experiment."

But physics is not without such critics, too. In his 2004 book The Trouble with Physics: The Rise of String Theory, The Fall of a Science, and What Comes Next, Lee Smolin reproached the physics profession for being seduced by beautiful and elegant theories (notably string theory) rather than those that can be tested by experimentation. Similarly, in his 2007 book Not Even Wrong: The Failure of String Theory and the Search for Unity in Physical Law, Peter Woit accused physicists of much the same sin as mathematical economists are said to commit.

With markets at all-time highs, you might think investors are going crazy for stocks. But that's not always the case, writes CNNMoney: 

According to a recent Citi Private Bank survey of more than 50 representatives from large family offices, which manage assets on behalf of high net-worth families, nearly two-thirds of wealthy investors think it's more likely that the stock market will go up at least 10% over the coming year than lose value.

But these investors have, on average, almost 40% of their portfolio allocated toward cash. Stocks only averaged 25% of their portfolios. The rest are in bonds and alternative investments such as commodities and real estate.

Eddy Elfenbein gives a quick take on Twitter:

What if I told you I had a company that last year generated $4 in sales? The problem is that I had $5 in expenses so we actually lost $1.

The good news is that things got better this year. For the first half, we generated sales of $3. But again, we spent heavily. We had expenses of $4 so lost lost another $1. We have $5 in debt.

How much would you pay for this company?

If you said $1,700, congratulations. That's Twitter.

Carl Richards writes a must-read piece on diversification: 

I also understand why it's tempting to think that we don't need diversification. It can be difficult to watch portions of our portfolios climb sky-high while others seem to be lost in the wilderness. But until the day that markets become predictable, we're in for a bumpy ride if we dismiss the benefits of diversification. Of course, diversification doesn't eliminate all risks, but it's one fantastic shock absorber. So it frustrates me when I hear of investors being advised to leave this valuable tool on the sidelines.

Changing tides
China's manufacturers are being squeezed by rising wages, reports The Financial Times:

After skipping the fair for a couple of years, Ms Lin returned this year in the hope that the 2014 football World Cup would boost demand. But the 4 per cent rise in the renminbi against the dollar during her absence has intensified cost pressures from double-digit annual wage increases that are common across Guangdong.

"This is a problem and the workers' salaries are rising too . . . [but] customers insist on the older price," says Ms Lin.

Finance meets art
A composer wanted to mix stock trading with an opera. What happened next is pure genius: 

Enjoy your weekend. 

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Read/Post Comments (3) | Recommend This Article (9)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On November 08, 2013, at 3:21 PM, slpmn wrote:

    Great NY Times piece...

    On wealthy families and their investments - it makes sense when you think about it. Why would you risk your money in the stock market if you didn't have to?

  • Report this Comment On November 09, 2013, at 7:06 PM, GrCelt wrote:

    Except physics can explain basic things and Economists cannot.

  • Report this Comment On November 10, 2013, at 8:59 PM, boogerface02211 wrote:

    I enjoy your Friday - eight articles. Keep ém coming.

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