Monday, January 9, 2012

University of Missouri Investment Research

Or what passes for research these days.

As a Mizzou alum, I offer my sincere apology for the absolute waste of taxpayer money spent on this assistant professor’s salary.  I apologize to anyone who has sent their child to MU for an “education” in the last thirty years – but I’m not in a position to refund your expenses or pay off your ill-advised loans.  I also suggest that the professor shut her Yao-p and find a job she’s qualified for – maybe a barker at a carnival sideshow or a salesman at a used Yugo lot. 

Such brilliant investment advice:   Just stop worrying about the fact that you only have a few years to recover from a significant market correction and keep pumping your money into an inflated market.  That makes perfect sense.  

I am no prophet of profit, that’s for sure.  The markets are going to rise and fall.  Equities, right now, have recovered somewhat from their 2009 lows.  There is no clear indication of the direction it will take from here.  There is possibly at least a 25% chance the Dow could go to 6000 or lower.  There’s also probably a 10% chance it ends 2012 over 15,000 then crashes.  It is quite likely that it continues to flop around between 10,500 and 12,500 for several more months. 

Professor Yao’s advice could be:  
  a)  (whispered conspiratorially) bought and paid for by the Wall Street/Pennsylvania Avenue elite; 
  b)  the result of bad anchovies on her Shakespeare’s pizza;
  c)  too many trips to Harpo’s;
  d)  all of the above.

Note, I am not questioning the professor's actual research findings that, "Age has a pragmatic relationship with financial risk".  That does not really require a PhD or surveys to determine.  The professor is also correct when she says, "In addition, individuals approaching or in retirement may shift focus from asset accumulation to asset preservation. These individuals may become relatively more concerned about potential loss of money when they are closer to retirement or no longer have a steady source of income."  True but trivial is how I would classify that.  It is well-known and very common common-sense.  What is it MU is paying this person for?

But look at this statement:  "Investors should not let the economic climate affect their risk tolerance."  In other words, folks, do not allow reality to harsh your mellow.  Fire up the bong, baby.


  1. "Rui Yao, an assistant professor of personal financial planning in the College of Human Environmental Sciences at MU"

    Well, that's part of the problem right there. Why does such a position even exist?

    If we didn't have so many Yao's to feed we may be able to save a little more.

    Anyhow, this made me think of folks I catch on the radio like Ric Edelman, He's a great finincial advisor for the status quo. I just think we ain't gonna have a status quo no mo. Folks like that can't contemplate such a situation. It would destroy their world, they would have no function, therefore they tend to downplay the DOOM scenarios.

  2. You are right. What is "Human Environmental Science"? Why does it need its own college? Do we have a Non-human version, or are we being specist?

    I have respect for advisers who look at the current situation and suggest that maybe it won't be as bad some of us think it could be. Spengler/Goldman being a good example. He thinks China will save us and the euro crunch is no big deal. Still, good advisers are not going to tell you to hang onto high-risk investments. Goldman, for example, has been saying for quite a while that there is no reason to hold any European bank stock.