In case you missed it, I recently wrote a piece for NY Magazine which was a follow-up to Michael Osinski’s piece on toxic assets. The gist of the article was that Osinski, who wrote the software that created many of these products, is now very bullish on these so-called toxic assets. I put together a list of various funds that would give investors pseudo exposure to mortgage backed securities and related products. I also expressly described how there is no “pure play” on what Osinski is doing and that most investors would find it impossible to replicate the strategy via their broker or discount broker. The article also expressly says that it is not financial advice and at no point implies that it is appropriate for any investor to try to replicate what a sophisticated investor like Osinski is doing.
Well, Felix Salmon at Reuters had some choice words for the piece and jumps to some elaborate, interesting and entirely misleading conclusions.
Unfortunately, Felix falsely assumes I am providing some sort of financial advice (which the article clearly says it is not), falsely believes these products perfectly replicate Oskinski’s strategy (which I clearly say they do not) and falsely believes that I think toxic assets are appropriate for most investors (which is never said or even remotely implied in the article). Of course it is not financial advice. Of course Osinski, who says his friend “T” is a guru, has better info and access to product than most. Of course these highly complex and sophisticated products aren’t appropriate for everyone. Why these facts even need to be conveyed, when they are so clearly stated, is beyond me.
On the bright side, Felix managed to use less than 600 words to post the most obvious of obvious facts….On the negative side, I just wasted 10 minutes of my life responding….
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.
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