Index Funds Put the Fun in Fundamental Stock Investing

Next to Cat Fancy, I think The Economist is the best magazine on the stands. (Or "newspaper," as "Sir" would have it-- read the letters page sometime!) It's better-researched than anything, well-written, and even funny. And I think my mail carrier is reading my copy!

Usually I get it on Saturday, but this week's didn't arrive until Monday. The carrier had a mischievious grin on, too. I think he must have been jonesing on the Special Report all about asset management in this week's issue. It describes the radical changes in the mutual fund industry, explains hedge funds, demystifies some of the arcane jargon ("alpha" versus "beta"). Smart, smart, smart.

It also confirms what Bogleheads, those oddly-named devotees of John Bogle & Vanguard's indexing options, already know. Mutual funds are a loser's game, because you're paying for a fund manager who gets paid based on last year's performance, which may not be replicable. Even if the manager does well, taxes & fees will each up your profits. It's kind of scam, really.

Index funds just try to replicate the market. I have a core of my investments in Vanguard index funds, and then a (smaller) discretionary fund which I use for individual investing. Not at all sexy-- not at all something to boast about down at the club (if I were in the club!). But long term, it works.

And I feel smarter having read The Economist. Seriously, a couple of hours with this magazine is better than a week's worth of people yelling at you on CNBC.

MARKETING: Craigslist SEO

SEO is "Search Engine Optimization," and Craigslist is the quirky, uniquely Netty classifieds service. It reaches gazillions of people every 0.5 seconds and has a Google PageRank of like 1 or 2 so all the marketing gurus are freaking out about how to use it all the time. I've run across a number of blog posts claiming sneaky ways to get on it so your PageRank will explode and you'll become rich and sexy. Some guys even sell eBooks about how to do it.

But it doesn't want to be used for marketing. It's a free-for-all, but the people there have an idea of what it should be. They hate spammers, hate it when people try to screw with the system, and like it when it's just real people connecting with other real people to give away a musty couch or a lava lamp. It's not like getting 20 seconds free on ESPN.

Don't believe me? Browse the Best of Craigslist for ads selected by the users. My favorite? The one that summed it all up.

So, even though the SEO gurus say Craigslist is where it's at, think twice before diving in there. It's too much like showing up at a circus in admiralwear.

As a bonus, check this out, from the New York Times:

Craigslist Meets the Capitalists

If Craig has a cat, I bet it's not monetized at all!