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<\/a><\/p>\nAccording to Bloomberg, Verizon is expected to make an offer for Yahoo next week (probably Monday). The report says Verizon is willing to buy both Yahoo’s core internet business (which Yahoo values at at least $8 billion) and its stake in Yahoo Japan. Verizon would replace Yahoo CEO Marissa Mayer with AOL CEO Tim Armstrong and Verizon’s executive vice president, Marni Walden.<\/p>\n
In the old days, both AOL and Yahoo thrived as ways (basically the only ways) to get onto the Internet. But then Netscape invented the browser and none of us needed AOL or Yahoo any longer. Now, both AOL and Yahoo eke out a living throwing up dubious “content” in the hotpe that someone (anyone?) will read it and companies will want to advertise. I haven’t visited AOL or Yahoo in years. And I bet you haven’t, either. In fct, the funny thing is that the first and biggest ad on today’s AOL is from Verizon (its owner). That tells you how difficult it is for AOL to sell ads.<\/p>\n
All this is thoroughly depressing (at least to me) that Verizon, which has a perfectly fine wireless and FiOS telecommunications business would now play the publishing\/content business — when the Wall Street Journal, BusinessWeek, the New York Times and a million other places do a far better job. If you don’t believe me, look at the two idiotic stories AOL (which Verizon owns) is leading off with today:<\/p>\n
I’m kicking myself…. I just read the transcripts of Verizon’s last two earnings conference calls. I expected some heavy duty “Vision” for what why is spending billions on a business it knows nothing about. All I found was granular financial data on its wireless business and the data on how they’re changing they way they peddle smartphones to their customers.<\/p>\n Do I think Verizon’s 4.35% dividend yield is in jeopardy? Not for now. Do I think the billions Verizon is wasting on AOL and Yahoo will affect the price of Verizon’s stock? The answer is most definitely Yes.<\/p>\n Yuch.<\/p>\n Another story on badly performing mutual funds.<\/strong><\/span> This time from the Financial Times:<\/p>\n US mutual funds have underperformed the equity market by the greatest margin in nearly two decades as a turbulent first quarter wrongfooted many traditional asset managers in another blow to their dominance of the industry.<\/p>\n Investors had already been shifting to cheaper, passive investment strategies that merely replicate the market’s return. The deteriorating ability of highly paid professional asset managers to navigate the stock market is expected to accelerate the seismic shift in investment management towards low-fee alternatives, such as exchange traded funds and index-tracking mutual funds.<\/p>\n “Investors are voting with their feet,” said Jeffrey Ptak, the head of fund manager research at Morningstar, the data provider. “The flows into passive strategies have been torrential and have mostly been funded by redemptions from active funds.”<\/p>\n Equity markets staged a comeback in March, clawing back all losses from a turbulent January and February, with the S&P 500 ending up 0.8 per cent over the quarter. But the ferocity of the tumble and subsequent bounce tripped up many stock pickers.<\/p>\n Just 19 per cent of US mutual funds that invest in “large-cap” companies, such as Apple, IBM, JPMorgan and AT&T, managed to outperform the S&P 500 in the first quarter, according to Bank of America Merrill Lynch, the lowest quarterly hit rate in its data, which stretches back to 1998. The average large-cap fund, which typically invests on behalf of retirement plans, lagged behind by 1.9 percentage points, also a record level of underperformance.<\/p>\n The “beat rate” – the ability to outperform the market – was even worse for growth funds, which target typically smaller, younger and more rapidly expanding companies. Only 6 per cent of growth funds outperformed their index, the worst since at least 1991, and the average fund lagged behind by 3.5 percentage points, BofA said.<\/p>\n Value funds, which aim to buy companies trading at an unwarranted discount to their real worth, did somewhat better but only 19.6 per cent beat their benchmarks. Nearly 30 per cent of so-called “core funds” – which pursue a blended strategy – outperformed their gauges but their success rate dropped every month this year.<\/p>\n The persistent inability of asset managers to outperform their indices – even before their fees are subtracted – has led to a dramatic change in how many investors manage their money, leading to a shift of capital into passive strategies that aim to mimic cheaply a benchmark, rather than beat it.<\/p>\n ETFs took in a record $US372 billion of net new assets last year and the industry now controls nearly $US3 trillion of assets.<\/p>\n There is also mounting appetite for next-generation passive strategies called “smart beta”, which tweak benchmarks to lean more towards specific attributes that have been shown to be positive over time, such as lower-volatility stocks.<\/p>\n Here’s your weekend reading. <\/strong><\/span>This stuff is good. I handpicked it from the mass of stuff I read. + How America Made Donald Trump Unstoppable.<\/strong> He’s no ordinary con man. He’s way above average — and the American political system is his easiest mark ever. By Matt Taibbi. Click here.<\/strong><\/a><\/p>\n + Merle Haggard’s Life Advice<\/strong> by Sean Woods. Click here.<\/strong><\/a><\/p>\n + Legalize It All. How to win the war on drugs<\/strong>. By Dan Baum. Click here.<\/strong><\/a><\/p>\n + How to Stop Over-prescribing Antibiotics<\/strong>. Click here.<\/strong><\/a><\/p>\n Totally gorgeous video of hummingbirds at work.<\/a><\/p>\n
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