Scanning 15 Million Books

Epic interesting website:   

http://ngrams.googlelabs.com/

"Of 129 million published books since the invention of the printing press, Google has about 15 million so far with more than 2 trillion words in 400 languages." You can type in a word to see the number of occurrences by year.  This website was so welcoming after spending Saturday afternoon in the library going over Futures and Forwards contracts and its relationships with IRP and PPP. 

 

 

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Commodity prices are setting new highs.  Some people say it is too late to get on the wagon and some say buying gold or silver now is the best bet because the inflation in the US will be astronomical in a few years.  But is buying silver or gold really a good idea for investors like you and I?  I'm sure having 5% of your portfolio allocated to commodity index is good but some recommend putting 50% or more to silver or other precious metals alone.

According to Ronald G. Layard, over the last century, the long term geometric return of the average commodity was close to zero but the geometric return of the commodity index was strong.  This is because the index volatility is lower than the average volatility of its constituents.

Also, over the last century, spot commodity prices have fallen by 1.5% per year.  The prices decline because of new technology and the introduction of substitutes.

Commodity markets are a natural complement to capital markets and provide diversification to your portfolio (CFAI Level II Vol 5 Reading 50).

Level II = :(

Today, I went over volume 5 Readings 54-57 of the curriculum.  The binomial interest rate tree is pretty tricky and most importantly I am running out of steam.  The test is more than 6 months out and I have been studying for 2.5 months already.  Read through all of CFAI readings, highlighted, and took 100 page notes..... Now I am going over my notes to try to understand and solve all the examples in the CFAI books.  I need to focus and get on it.