Tuesday, July 15, 2008

The G.I. Joe with the kung-fu grip

A recent Morningstar study, picked up by papers across the country, suggests that mutual fund managers should invest in their own funds to demonstrate their confidence. Here's the money quote:

...the best way to demonstrate a commitment to shareholders is to join them.


I'm not quite sure if that is the case. Not that I'm defending the mutual fund industry, but I don't want my fund manager making investments in order to directly affect their personal net wealth. When things are bad, I want a focused, data-driven geek, not a pork belly speculator in 1983 as depicted in Trading Places:

Randolph Duke: Exactly why do you think the price of pork bellies is going to keep going down, William?

Billy Ray Valentine: Okay, pork belly prices have been dropping all morning, which means that everybody is waiting for it to hit rock bottom, so they can buy low. Which means that the people who own the pork belly contracts are saying, "Hey, we're losing all our damn money, and Christmas is around the corner, and I ain't gonna have no money to buy my son the G.I. Joe with the kung-fu grip! And my wife ain't gonna f... my wife ain't gonna make love to me if I got no money!" So they're panicking right now, they're screaming "SELL! SELL!" to get out before the price keeps dropping. They're panicking out there right now, I can feel it.
[on the ticker machine, the price keeps dropping]

Randolph Duke: He's right, Mortimer! My God, look at it!


Mr. Vanguard Fund Manager, don't make trades to get your kid the G.I. Joe with the king-fu grip.