So, they shut down the U.S. Government…again. While those of us in the money management business are more focused on the potential impact of Congress not raising the debt ceiling, the fact remains that for a few days, weeks or perhaps longer, parts of our federal government are on an involuntary vacation. I started thinking about what else we could shut down…things that are far less important than our Government, yet they remain in operation.

In order to avoid getting too P.O.’d (that’s either a slang term for angry or a pun on the Post Office, take your pick), I asked the Sungarden investment, operations and marketing teams to provide me with their opinions on what else to shut down. I combined their thoughtful work with my own thinking on the topic and here is our top 10 list:

  1. Some Wall Street firms and their enormous executive compensation packages
  2. The rap music industry (except for PitBull and FloRida…those guys are kinda cool, and they are from my part of the country)
  3. Fannie Mae and Freddie Mac…though it may not take too much wishing on this one
  4. Legal pyramid schemes a.k.a. multi-level marketing – (that one was from a team member who hails from Grand Rapids, MI, home of Amway)
  5. Closed-End funds that trade with more than 25% leverage – t here are many but I will provide one example here. One of the most prominent bond managers in the world has one that currently is about 50% levered and also sells for a large premium to its net asset value. That is, you are paying a mountain price for a molehill of assets when you buy it. The problem is that the yield is so high that people are attracted to it, often unaware that such a yield is a high-risk investment.
  6. Cable News – (quoting) because they confound the public and their only goal is to ‘fill’ air time with whichever content is most panic inducing. Every time I turn on CNN/MSNBC, etc my Fight or Flight instincts engage!
  7. Faux-duciaries – TV, radio and internet investment “experts” who the public very often mistakes for fiduciaries. That is, they are obligated to put their clients’ interests first. Well, in the mass-media, your listeners are not clients and according to the tiny print or quickly-read disclaimers provided, none of what they say or write should be construed as investment advice. But human nature is to assume that if someone has a pulpit, they have passed the smell test. I know better, my clients know better, but does everyone know better. Apparently not. More on this in an upcoming blog.
  8. Miley Cyrus – the pre and post-twerking version
  9. Baseball managers who obsess over the lefty-righty thing – Games go on forever when pitchers are brought in to throw to one batter, simply because their track record against batters of one type of handed-ness is slightly worse than those who hit from the other side of home plate. As with most things in investing, this should not be such a black-or-white issue.
  10. And as long as we are at it, how about shutting down all forms of racism, everwhere. OK, that’s not something any one person can control, but my wife and I saw the movie “The Butler ” this week and it shows you two things: how far we have come, and why there cannot be any reversal in that progress. See the movie.

This list is shut down for now, but please send along anything you think we missed. We will use it the next time the U.S. Government closes for business…

© Sungarden Investment Research

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