Rich People Magazine: Summer 2014 Edition

The summer edition of WSJ. Money is out, AKA, Rich People Magazine (or as editor Mike Miller put it, the magazine “for people who are voyeuristically interested in the high end and are at the high end”), and it doesn’t disappoint.

For example, did you know that we’re running out of places to park private jets?

Indeed, the litany of potential headaches is only growing for the jet-setting set, as these fleets are increasingly flying to locales that don’t have enough parking places, hangar space or landing times. “We’re all competing for airspace and parking space,” says Lex den Herder, vice president of government and industry affairs for Universal Weather and Aviation, a Houston-based trip-management company.

And here’s a column about investment advice (that doesn’t only pertain to the rich!) — the likelihood of getting rich from picking stocks at random is probably the same as paying a professional to do it for you:

If you have a professional portfolio manager, you are probably paying him a lot in fees. If you hold money in hedge funds or private equity, the actual fees you are paying are probably much higher (and, sometimes, harder to detect).

But are you getting value for your money? How are your investments actually doing, and how should they be doing? Every year, you receive a glossy performance review, complete with multicolored charts and impressive tables, along with notations on things like “alpha” and “beta” and “Sharpe ratios.” But it isn’t always easy to find the bottom line — or to know what you should compare it with. This is where my made-up fund comes in.

If you want to understand how well your investment manager really did last year, try comparing him to a selection of global stocks picked at random. If that’s too racy a benchmark, try this variation: Compare his performance with that of a fund made up of 80 percent random stocks, and 20 percent Treasury bills. Wall Street won’t tell you so, but these are the best performance benchmarks to use. And the reason Wall Street won’t tell you so is because these benchmarks make a lot of money managers look pretty bad.

Or just do what Warren Buffett wisely says and put your money in some index funds.

Why would you buy a yacht when you could buy an English football team?:

Less exotic than Indian professional cricket, but with much more upside than established American sports, European soccer teams, especially English ones, have become almost as popular as yachts for higher-end buyers. What’s intriguing about this investment strategy is that it isn’t just for show — many of the people plowing cash into the beautiful game are also making some serious dough.

And another that may pertain to you! Do you own any priceless antiques? Maybe something that was passed down to you through several generations? Do you know what priceless means?

“I can’t tell you how many people I’ve had walk through the door — divorcées, wives of finance guys whose jobs went down — wanting an estimate of their ‘priceless’ collection of silver or Empire furniture,” says Gary Leon, owner of Leon Vanderbilt Antiques in Charleston, S.C., and a dealer of about 40 years. Most items, he says, get 20 cents on the dollar from the original price.

Those in the antiques business know that, for the most part, “brown furniture” — Victorian highboys, pieces from throughout the Empire period and, really, any article whose defining characteristic is brown wood — continues to tank in value. Unlike art, which has held its worth, antiques have drooped, experts say, for reasons both familiar (the economy, a surplus of older boomers selling them) and surprising. Among the X factors: (a) a surfeit of fakes and forgeries from England and France have glutted the market, often fooling even discerning buyers; (b) dealers have closed shops because of high rents; and (c) lacking easy access to reputable dealers, more folks are relying on their own instincts to judge antiques at auction houses.

Stay away from brown furniture, got it.

Photo: Shine 2010

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