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Career Advice: Could You Outperform A Slightly Smaller But Spunkier Index?

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Are you in the financial sector, overworked, and worried about layoffs? Are you willing to relocate for the right job? Are you aware that there's a market where prospects are good for job growth, you won't have to work too hard, and they're more relaxed on age-of-consent issues than in Greenwich? It's called Cambodia and it's calling your name.

All the nonsense that's keeping you busy in New York - watching the markets, reading research, analyzing companies, making trades? Is going to be way, way less pressing in your new surroundings.

It’s impossible to invest with any of the companies listed on the Cambodian stock exchange because there are no companies listed on the Cambodian stock exchange.

And don't worry that you'll be taking a step back in your career. Neighboring Laos's stock exchange is booming, insofar as it lists two companies:

[I]n the first days after opening the Laos exchange zoomed more than 80%. It dropped precipitously afterward, and remains volatile. Still, those bumps in the road are expected in such spunky places; it’ll be a long time before they are grown and tamed.

World’s smallest stock exchanges can only go up [MarketWatch]


The Smart Indexes Are Even Worse Than The Dumb Ones*

You may have heard that the Dow hit 13,000 today before subsiding to a shameful 12,965.69. You may not have heard this, or cared, because the Dow is for morons, being a price-weighted index of thirty semi-random companies that, gah, aren't even "industrial" any more.** There are alternative theories but those theories are wrong: Joe Weisenthal in defense of the Dow has been noting its very high correlation with other, broader, more sensible indexes. I see this as further undermining the Dow's legitimacy. If it's very different methodology were leading to some kind of meaningfully different result, then we could perhaps argue that it's adding value in some kind of way. But instead what's going on is that the Dow's creators are hand-picking which stocks to include in the index specifically with an eye toward constructing an index that mirrors the other, better indexes out there. Apple and Google, for example, aren't in the Dow and aren't doing to get in any time soon because their very high share prices would skew the index in weird ways. This just goes to show that the Dow's creators already "know" the right answer (from looking at the S&P 500 and the Wilshire 5000) and then are trying to assemble an index to create the predetermined result. Maybe! An alternative theory is maybe suggested by [Occam's razor and] this piece from the Journal this weekend about index funds that I just loved and so am now going to inflict on you at unnecessary length: