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In investing, it can be good to be a little bit lazy.  To do well, you don't need to trade every day or watch the prices fluctuate by the minute.  You can just pick a few well-chosen mutual funds, contribute regularly (preferably with a monthly automatic investing plan) and rebalance just once, or twice a year at the most.

Paul Farrell, of Marketwatch, has been tracking a few Lazy Portfolios for a few years now.  They vary from having as many as 11 mutual funds in a portfolio to as few as 3.  All of these portfolios have beaten the standard S&P 500 benchmark for the last 1, 3, and 5 year periods ending July 2006.

One thing to consider though, the more funds your lazy portfolio has, the more transactions you need to do.  Be careful that your transaction fees don't add up to too much.  Also, it may be easier to implement a lazy portfolio in a 401(k) or other retirement account.  For non-retirement accounts, consider something even simpler, such as a targeted date retirement fund.

 

Posted by spotsearch at 09:49 PM | Permalink | Comments (0) | TrackBacks (0)

 The FujiFilm FinePix F30 has a remarkable feature- it is the first compact sized camera that can take full resolution ISO3200 pictures.  This tops the ISO1600 of the previous Fuji F10 and F11. I ran some tests to see how good it is.   So, is it good enough to use?  That depends- read the full review and find out.

The main reason I bought the Fuji F30 is that I love taking natural light pictures.  Natural light pictures just look so much better than flashed pictures.  I almost always find myself taking pictures indoors, in low light, and my bulky digital SLR and lenses are just not always convenient to carry around (I certainly don't have them with me all the time).  The Fuji F30, however, is small enough to carry around with me at all times.

First the basics- the Fuji F30 is a 6.3 megapixel camera, with a 1/1.7" CCD.  Basically, it's good enough for most purposes, and has high enough resolution for high quality 8x10 prints.  It has a 3x zoom lens (36-108mm), with the widest aperture being f/2.8-f/5.0.  In addition, it supports shutter speeds from 1/2000 to 15 seconds.

Turning on the F30, it feels fast and responsive, quickly extending its zoom lens.  The Fuji F30 is reasonably compact (3.6" x 2.2" x 1.12" and 6.5 ounces) - not the smallest in its class, but it fits in a pocket.  Its edges are more rounded than the older F11 and F10, but is very similar in size to them.  The 2.5" LCD is very nice though it has an ever-so-slight lag when panning very quickly (nothing that is enough to worry about though). 

It has an amazing battery life (claimed at up to 500 shots).  In fact, it's so good that for most situations, you may not even need to get an extra battery.  I used the F30 on a trip to Asia for nearly a week, taking many pictures every day, without needing a to recharge.

 The movie mode on the Fuji F30 is happily much better in low light than the F10.  Now movies in low light come out quite well!  The 640x480 30 frame/second movie mode is wonderful (it also supports a lower quality 320x240 mode).  Pictures are clear, motion is smooth.  My only criticisms are that movie files are very large (only 14 minutes of video at full resolution on a 1 GB XD card) and the audio quality is not very good, and the microphone seems to pick up a lot of stray wind-like noise even if there is no wind.  A sample movie I did was recorded at 1 megabit/second, and audio was 128 kilobits/second (but only 8 bit samples).  I also wish there were some other frame rate choices besides 30 frames/second, such as 20 or 10 fps to save space.

In terms of low light photography performance, I'm happy to say that the Fuji F30 performs even better than the F10 and F11 that it replaces.  Subjectively, ISO 800 looks good, in fact, I have no problem using ISO 800 for any situation.  Of course, it's not quite as clear and noise-free as lower ISO levels, but, it is quite usable and most people will be satisfied with pictures at ISO 800.  ISO 1600 is definitely grainy and looking a bit pixellated.  It's usable if necessary, and I do end up using it quite a bit.  Finally, ISO 3200 is very grainy and somewhat soft looking.  Detail has been definitely lost at ISO3200.  Nevertheless, when necessary, I would (and do) use it.  I would say that prints up to about 5x7" look usable (not great, but, certainly far better than not getting a shot at all).

Below are some examples of the F30 at various ISO levels:

Fuji F30 ISO 800:

 

Fuji F30 ISO 1600:

 

Fuji F30 ISO 3200:

Other comments on the F30- I think that (as with most compact digital cameras) in scenes with high contrast (such as bright sunlights and dark shadows), highlights tend to get blown out.   I also think sometimes the pictures come out looking a bit flat- they don't quite have the punch and vibrancy (saturation) of other compact cameras I've used.

Conclusion:
The Fuji F30 is an excellent general purpose digital camera.  It has improved upon the F10 and F11 in almost every way, although the improvements are slight.  It is a good balance of compactness, speed, and quality.  It makes an excellent carry-around camera.  It's also a great complement to a digital SLR for times when you can't or don't want to carry around a much larger camera.  However, as good as the F30 is, it's not perfect.  If Fuji make a few more improvements, it could be the perfect compact camera.  I'd like to see improvements to ISO 3200 quality, better movie mode sound quality, support for image stabilization, and a slimmer case. 

- For reference, compare with my
Review of the Fuji F10
Review of the Canon EOS Rebel XT (350D)

See also:
PhotographyBlog's F30 Review
DPReview's F30 Review

 

Posted by spotsearch at 09:05 PM | Permalink | Comments (0) | TrackBacks (0)

One of the key principles in building a portfolio of investments (stocks, bonds, mutual funds, ETFs, cash, etc) is managing the amount of risk you're willing to take.  Risk is a difficult thing to measure, but, a number of web sites and tools attempt to do that.  I'll briefly outline a few I have used:

RiskGrades - is a web site that provides risk evaluation.  Currently it's a free service, you just need to sign up for it.  It lets you enter your investments, such as stocks, mutual funds, etfs, or cash, and it calculates the risk from them.  It also lets you simulate events (such as 9/11, Black Monday, and more) to see how your portfolio would have performed under stress.  It is a nice tool but the web site seems rather slow and sometimes is a bit flakey.  The user interface needs a lot of work.

ETrade Risk Analyzer - this risk analysis tool is licensed from RiskMetrics, which makes the RiskGrades tool.  However, I think ETrade's version has a simpler, easier-to-use interface, and is more robust and better organized.  Also ETrade's risk analyzer is free for ETrade customers, and lets you easily assess the risk of your portfolio.  It can plot your risk compared to various standard benchmarks and lets you simulate stress events as well.   Highly recommended.

FinancialEngines - provides monte carlo simulations of your portfolio.  It's a very nice site that lets you gauge the likelihood that you will reach your target goals for retirement with a given portfolio.  Whereas the other sites mainly measured risks of your portfolio, FinancialEngines simulates the likelihood of reaching a retirement target date with the desired amount of assets.  It provides nice ways to let you explore different variations on your portfolio too.  It costs some money to subscribe, unless you get access through your employer 401k plan if they have a subscription.  The site is nicely designed, easy to understand, and useful.

Morningstar Risk Analyzer - This tool is the simplest of the risk analysis tools.  It's available to you if you have a paid subscription to Morningstar.  It shows you the risk of each component of your portfolio.  You can adjust the amount of risk you want and the tool then shows you the allocations that would be needed to meet the chosen risk level.

Morningstar Instant XRay - Although not quite a risk analysis tool, it does help you get the big picture of your portfolio.  It's an excellent tool that shows you your overall asset classes.  If you're a paid subscriber to Morningstar, you can also see their automated computer analysis of your portfolio.  What's neat about this tool is that if you own a a portfolio of mutual funds and/or ETFs, it will use the underlying stocks, bonds, or other assets to calculate a true snapshot of what is in your portfolio.  Overall an excellent tool.

 

Posted by spotsearch at 12:14 AM | Permalink | Comments (0) | TrackBacks (0)

iTunes 7 was just introduced last week, along with Apple's enhanced Video iPod and G2 Nano.  iTunes has always been the shining star of how music management and purchasing can be done.

The main new attraction to iTunes 7 is movies.  Movie downloads from the iTunes store are priced at from $9.99, $12.99, and $14.99 depending on the title.  In addition, movies are at a very nice 640x480 resolution (they call it near-DVD quality). 

I think 640x480 is a very good compromise between download size and quality.  Apple, however, very disappointingly bungled their movie feature by crippling it.  Unlike music, which can be burned to audio CDs, movies can not be burned onto a video DVD!  They do allow movies to be burned to a data DVD for backup purposes, but those DVDs are unplayable on most normal component DVD players.  However, Apple does have a plan..... they are releasing a new device next year, the iTV, which for around $299, will allow you to play downloaded movies on a TV.  Great- I get to spend $299 on another device to work around the crippled iTunes which prevents me from burning the movie on a DVD to play on my tv!  Well, it is possible to also play movies on your TV by connecting your video iPod to it.  However, Apple in their infinite wisdom did not give me a video cable with my video iPod, instead, I had to buy one separately!  If I'm paying $299+ for a video iPod, I'd expect at least the basic cables to come with it.  Anyways, back to iTunes....

Other things new in iTunes 7- its UI look and feel have changed very slightly.  It's pretty much the same as iTunes 6 though.  It now organizes your library by information type (movies, music, podcasts, tv shows, audio books, radio).  When viewing your video library, it is now much smarter about creating a video thumbnail representing the movie or video if it didn't already have one. 

iTunes 7 has introduced a feature to get album artwork for your songs that might not have the album covers- a really nice touch!  Another touted feature is "CoverFlow" which lets you flip through your music visually or videos (by album cover, or movie thumbnail).  It's a very cool, showy feature.  This works fine for songs, but, unfortunately, this works rather poorly for videos, as, the thumbnail images don't show up unless you stop for a few seconds, instead of showing the flipping of images in real time.  The image lag is very noticeable with videos, but not too noticeable with music album covers (unless you haven't downloaded album art already- wherein it will pause to download album art).  My computer is a 1.7Ghz Centrino, which is reasonably fast, modern processor too, so that shouldn't be an issue.

Download progress reporting is greatly improved.  I guess this was necessary since downloads may take much longer with movies.  Now it has a separate display tracking the progress of all your downloads.  I should also mention that, during a download, my computer crashed.  After rebooting and restarting iTunes, I tried repurchasing that movie, and it recognized that I had already purchased it and let me download it, so, I'm quite happy about that.

Another nice feature is the breakdown of space usage on your iPod.  It shows you how much space is used by movies, music, photos, etc.  And one other feature worth mentioning is a "backup" feature that lets you back up your iTunes content to CD or DVD.  Another useful addition is the ability sync your content from an iPod to your computer.  This feature is almost great, but again, Apple has decided to cripple this feature.  Only content that was purchased from the iTunes store can be uploaded to your computer. 

iTunes is a very nicely build content management system that seamlessly integrates managing of your movies, music, and podcasts.  It does a beautiful job of handling purchases and managing your library, and is very polished and easy to use.  All in all, iTunes 7 is a good update.  Desplit its success and great interface, there is still room for improvement.  Apple needs to stop deliberately crippling its software.

UPDATE: iTunes 7.0.1 and 7.0.2 has some major bug fixes.  Coverflow works better now.  Also, it seems to have fixed the problems with crashing on starting up when using third party audio utilities.

See also: 

iLounge's review of iTunes 7
Review: iPod Nano 2nd Generation
Review: iPod video (5G)

Posted by spotsearch at 11:54 PM | Permalink | Comments (0) | TrackBacks (0)

I just upgraded to iTunes 7.  What could be more annoying than having it fail to start up with the error "I tunes could not be opened - unknown error (Ox666D743F)"?  It turns out iTunes has a problem if you use 3rd party sound enhancement software or 3rd party sound recording software.  You can temporarily work around this problem by disabling your 3rd party software.  This can be done by going to:

Control Panel --> Sound and Audio Devices --> Audio

and selecting something other than your 3rd party software for the "Sound playback" and "Sound recording device" options.  Or you could uninstall the 3rd party sound software completely.

UPDATE: iTunes 7.0.1 and 7.0.2 has some bug fixes, it seems to have fixed the problems with starting up when using third party audio utilities.  So, try downloading the latest iTunes.

Posted by spotsearch at 10:10 PM | Permalink | Comments (0) | TrackBacks (0)

The original Video iPod (i.e., 5th generation or 5g ipod) has just learned a few new tricks.  Apple recently unveiled the enhanced 5G video iPods.  They're mainly an incremental improvement over the original video iPod released a year ago in the fall of 2005.  For those that bought the original video iPod, Apple has released Firmware version 1.2 that gives you some of the features of the new iPod.  Firmware upgrading is now integrated directly into iTunes 7 (or later), and when you sync your iPod, it will allow you to upgrade your iPod's firmware.  Here's what you'll get if you upgarde:

 640x480 movie support:  The iPod screen is fixed at 320x240, so there's no changing that, however, now the built-in movie playing software can support playing of movies that are encoded at up to 640x480 resolution.  This is important if you buy movies from iTunes, which now support this higher resolution, giving near-dvd quality video.  At last, a reasonable movie resolution!  It was inexplicable why Apple's original software would not play much higher resolution videos.

Games:  The new firmware brings support for new games that can be purchased on iTunes.  These games include classics such as PacMan, Tetris, Bejeweled, Mahjong, and others.

Gapless playback:  Support for playing back with no pauses between files.

Adjustable screen brightness.

Improved scrolling speed - Scrolling through very long playlists is improved.  Also, as you're scrolling, it superimposes a large letter representing the first letter of the songs it's currently at.

Note, some people on the web have reported problems when upgrading to 1.2, so be cautious.  My iPod upgraded with no problems.  One feature that IS missing is the search-by-letter feature of the enhanced 5G ipods.  There is really no good reason why Apple left that feature out.  We can only hope that they'll change their minds and add it to a future firmware upgrade.  Overall though, this upgrade adds a few nice features and it is worth getting.  Also, as an owner of the original video iPod, with the new firmware, I feel that there is not compelling need to buy the enhanced  5th generation video iPod.

Note, see also:  my iPod Video review (5th Generation version)
How to fix: "I tunes could not be opened - unknown error (Ox666D743F)"

 

Posted by spotsearch at 09:02 PM | Permalink | Comments (0) | TrackBacks (0)

Lately I've been finding that doing my taxes is becoming a big chore.  Tracking of individual stock transactions and mutual fund transactions is a big pain!  For non-retirement accounts, if you are trying to build a diversified portfolio of stocks, mutual funds, bonds, and ETFs, doing dollar cost averaging every month, and doing occasional rebalancing, it generates a LOT of transactions.  That's why I've lately been thinking about simplifying my life, to get just ONE FUND that provides total diversification and simplicity.  Well, I'm too much of a do-it-yourselfer to totally commit to one fund, but, perhaps for, say, 66+% of my non-retirement assets, it might be something I'd consider.

There are a couple of choices I've come across, each with its own merits.  First, there are the "life cycle" or "target retirement" funds, and second, there are global allocation funds (those will be the subject of a future article).  With life cycle funds, you pick your retirement date, and the fund that most closely targets that date, and the fund has a diversified portfolio targeted for your age that gradually changes from risky to conservative as you approach your retirement age.  My target retirement date is about 2035.  The three top contenders I found are:

TRRJX - T. Rowe Price Retirement 2035
0.84% Expense Ratio
Returns:  2006 5.9%, 2005 8.1%

VTTHX - Vanguard Target Retirement 2035
0.2% Expense Ratio
Returns:  2006 5.6%, 2005 6.3%,  2004 12.0%

FFTHX - Fidelity Freedom 2035
0.75% Expense Ratio
Returns:  2006 4.3%, 2005 9.0%, 2004 10.9%

TRRJX is a bit more aggressively allocated (89% stocks)  than FFTHX (81.7% stocks) or VTTHX (75.6% stocks).   Also, TRRJX has a higher weight of foreign stocks (20.7%) vs. FFTHX (19.9%) or VTTHX (14.8%), but the tradeoff is, TRRJX has higher expenses.  Although none of these target retirements fund is my perfect choice, I'd give a slight edge to TRRJX.  I can always augment the core fund with other assets of my choice to round out my overall portfolio.  Personally, I prefer a bit higher weighting in foreign markets, and exposure to some more alternative investments such as real estate, emerging markets, and commodities. 

I think these new lifestyle allocation funds are superior to the fixed allocation retirement funds of the past (aggressive, moderate, conservative) because they gradually change their allocations over time.  The simplicity of one core portfolio fund is definitely tempting.  For many people, especially those that don't like to think about asset allocations and investing, it's an easy way to invest (hopefully regularly) in a diversified portfolio.  And even for the do-it-yourselfer, it can help reduce the number of investments to keep track of and simplify tax reporting and record keeping in the future.

References:

One-fund Retirement: Buy and Forget

Target-date funds: Retirement Planning Made Easy?

Posted by spotsearch at 10:33 PM | Permalink | Comments (0) | TrackBacks (0)

There are quite a few opportunities for networking with tech entrepreneurs in Silicon Valley and San Francisco.  A lot of these events have talks, demos, and unstructured time to establish connections.  Here's my short list of events and organizations:

SDForum - software development forum
SFWin - San Francisco Web Innovators Network
Stirr - the Emerging technology network
TechCrunch Party
SVASE VC Breakfast Club
San Francisco Entrepreneurs Meetup
Santa Clara County Entrepreneur Meetup
Silicon Valley NewTech Meetup
SF NewTech Meetup
TagCamp
BarCamp

 

Posted by spotsearch at 10:02 PM | Permalink | Comments (0) | TrackBacks (0)

I like thinking about asset allocations, and I innovative ideas, so, this is my attempt at creating an aggressive income and dividend portfolio.  You usually don't see the word aggressive combined with income and dividends.  A portfolio like this might be good for those with a medium to long time horizon and an appetite for high risk and high returns, and also wish to generate a steady stream of income. 

The theory of the "Waterfall Portfolio" is that a series of income-generating assets cascades income into a cash allocation (money market account) that can then be allocated to investments or used as income to live off of.  The assets are:

Allocation             Asset
-----  ---------------------------------------
13%  Money market account, 4.62% interest
14% WTDHYE - WisdomTree DIEFA High Yld Equity, 4.65% div+3.35%
14% DODIX  - Dodge & Cox Income (bonds), 5% interest
12% WTHYE  - WisdomTree High-Yld Equity 4.05% div +3.95%
15% EGLRX - Alpine International Real Estate 5% dividends +3%
32% prosper loans - 11% interest (mix of A and AA fundings)

Note, I broke the returns into a interest income or dividend portion and a growth portion.  They are derived based on the "return with 3% inflation" estimates from PortfolioSolutions.  I'd expect this portfolio to generate around 8.1% total annual returns over the long term, though anything could happen in reality.  In addition, due to the prosper loan payoffs, a continuous stream of cash amounting to around 2.8% of the total prosper loan amounts is generated, which can be reinvested in prosper or shifted to other investments for rebalancing as needed.  One WisdomTree ETF covers U.S. markets and one covers foreign markets, so that there is some geographical diversification.  Also, the Alpine International Real Estate fund provides further geographical diversification, so a total of about 29% of the allocation above is international.  Since these ETFs and funds invest in companies, they face stock-market volatility and risks.  The other assets, the money market fund, bond fund (DODIX), and prosper loans, provide stability.

 The weightings are based on the dividend or interest portion, as a fraction of the total expected dividends or interest.  Probably a more conservative allocation would be equal weighting in all categories.  I'd recommend rebalancing every half year or year to make sure allocations don't go too out of sync with the targets.  The amount of risk (and returns) can be of course further tuned by selecting higher risk, higher return loans on the Prosper loan segment.

 (DISCLOSURE:  I am considering some or all of the above investments in my own portfolio)

 

Posted by spotsearch at 10:19 PM | Permalink | Comments (0) | TrackBacks (0)

Prosper brings a lot of great things to investors.  It opens up a whole new arena of fixed income investments, promising credit-card like interest rates to investors (and the associated risks as well).  In addition, it allows you to fund peoples' dreams, or help people reach their goals.  It's satisfying to know that your money is really making a difference in someone's life, and it's fun to watch the progress of loan payments.

Loans on Prosper.com are unsecured debt, meaning they're not backed up by any assets, just by the promise of the borrower that they'll pay you back.  First a technicality in terminology. Although prosper refers to people bidding on loans as "lenders" technically, you are a more accurately a loan repurchaser, as Prosper actually puts up the money and does the actual lending and then sells you the loan. Prosper currently has only 3 year loans. The loans can be up to $25,000, and the interest rates are often capped by state lending limits. The first thing you need to know about Prosper as a lender is the risk. Lending to people is RISKY. Just how risky depends on the borrower and his or her situation. The most important thing to look at is the borrower's credit grade. This Prosper link shows the default rate for various credit grades:

Rating Avg. Default 
  AA     0.20%
  A      0.90%
  B      1.80%
  C      3.30%
  D      6.20%
  E      10.40%
  HR     19.10%
  NC Cannot estimate (no credit history)

Credit Grades used by Prosper are based on the Experian ScoreX PLUS credit scoring system. What you'll notice is that High Risk borrowers have a really high default rate, in other words, almost 20% of high risk borrowers are likely to default on your loan, so be careful when considering who you lend to.  Fortunately, Prosper lets you spread out your risk by letting you bid on small fractions of a large loan- in fact, you can bid as little as $50 on a loan.  All bids are pooled together in funding a loan, and the loan is filled by the set of lowest interest rate bids which fully fund the loan.  Thus, you can spread bids across a variety of loans and build up a portfolio of loans.

So what happens if someone doesn't pay?  There are a couple of stages, starting with a late payment, which progress from being late, 1 month late, 2 months late, 3 months late, to being in default.  When a loan goes in default, a credit collection agency (which you chose before bidding on the loan) will attempt to collect.  In addition to the threat of collection agencies, Prosper.com also reports late payments to major credit rating agencies, so lenders can damage their credit by not paying.  It's a well-thought out system, and I'm quite happy with it. 

Once you decide to become a lender, you'll find it a fascinating and rewarding new world.

 

Posted by spotsearch at 10:45 PM | Permalink | Comments (0) | TrackBacks (0)