Ello ello.

We mothballed the site back in — what was it? February? — but have returned, triumphant. We’re turning the dials and flipping the switches to bring all the old content back, exactly as it was. Hard to believe the most recent post was the annual Christmas-music thing.

So we’re back, but with the expectation of being even less active than before. The project for which we put the site on hold in the first place has become a full-time commitment. And we’re committed to being committed.

It’s time again, almost past time, to spin some Christmas tunes. Our annual tradition is to recommend a couple songs that help spread the joy. It’s a fun post to write each year, though challenging — because there’s so much Christmas music, and so little of it is to our liking…

It’s the Most Saccharine Time — Of the Year!

We also like to do some genre-mixing every year: orchestra and slow rock in 2007, syncopated a cappella and melancholy Britpop in 2008. (See our previous recommendations: 2007 and 2008.)

Our top picks this year are a Charlie Brown Christmas carol and some other easy listening. First, Vince Guaraldi’s Christmas Time Is Here (vocal version). Happiness and cheer. And It Doesn’t Have to Be That Way, by Jim Croce.

Merry Christmas. ♦

Brandon Wendell provides a good, high-level technical analysis of the major global equity markets: Lessons from the Pros. (Skip to the third paragraph.)

Global stock markets appear poorly positioned for additional gains sufficient to justify the current economic and political risks, in our view. ♦

We might direct the reader to Robert Rodriguez’s recent letter to shareholders, in which he urges a rational approach to the management of the national budget. Mr. Rodriguez is a fund manager at FPA Funds.

The comments of interest begin on page 2, with the paragraph beginning “One final thought….” ♦

An article in hedgeweek asserts that funds of funds are “defying predictions of extinction” (link to article). Sounds like good news.

If anyone can provide a citation of such a prediction — that every fund of fund (FoF) would someday cease to exist — we’d like to see it. Who made that prediction? We think a strawman.

Swensen at Yale and others certainly think that FoFs add no value, and would probably like to see them join the fossil record. But whose prediction is the industry defying? Googling some relevant search terms just turns up more Internet articles in the same vein — articles discussing how this invisible “prediction” that the industry would cease to exist was so, so wrong. So a citation would help.

In any case, the degree of upheaval and change in the funds-of-funds industry has probably not been exaggerated at all. Or if so, by what measure? The article doesn’t say. Funds of funds clearly have “become one of the principal casualties of last year’s” market upheaval…

To measure the degree of change here, look at the steps these shops are taking to define new business models for themselves. Many FoFs are redefining the range of services they perform for both investors and managers. Also look at the sheer number of funds that have already closed down. (Wish we had fresher data on this but last time we checked — about two months ago — it was a significant percentage of the total — north of 15%. And that was only the second chorus of the redemption song.)

Here’s an idea for an article worth writing: Call ten FoF managers and ask them how they’re redefining their business models. Probe, question, discern any real trends, and write about it. Now that would be interesting. There’s a story there because the business model is undergoing radical change at many shops, and the people pushing for that change are generally product and market experts, and worth paying attention to.

That’s the good news: Not that the industry is defying some nonexistent prediction of its extinction, but that many in the FoFs crowd are real pro’s — they’ve seen it all, end to end, and they know how to pick up the pieces and play a pivotal role connecting managers and investors. Many will survive, many have already become part of the fossil record.

It doesn’t take a strawman to make this interesting. ♦

Portmeiron

Back in January, we asked if anyone could help us think of the name of an alternative-investment site we used to visit years ago (see the bottom of our Resources for Job Hunters post).

We found it!… Albourne Village, an eight-year-old hedge-fund and alternative-investing community targeted at accredited investors and institutions.

We remembered the site as using the metaphor for “a café or an island or something like that.” Not quite. Despite the fact that we’re enjoying 1967’s Prisoner TV series on DVD, the village metaphor somehow slipped our minds. It even has its own mayor. If you’re accredited, check it out. ♦

Unable to see the appeal of MyFace (is that what it’s called?), we decided to create a more professional networking profile.

If you are interested in global asset allocation or portfolio modeling, be the first to connect with us on LinkedIn. Our profile is at: http://www.linkedin.com/in/stracia.

It’s where all the cool kids hang out. ♦

Ow, stop hitting me.

Have you ever had an idea that was kicking around in your head… for two years?

On New Year’s Eve 2007 we announced our global asset-allocation model, which by that time had been in development for months. We searched high and low for a global-macro allocation index, finally determining that there was no such thing (see our rant here). So we did what MSCI, Dow Jones, FTSE and all the other global index providers failed to: We created our own global asset-class index by solving the unique set of data-collection and manipulation issues that a global portfolio presents. And we took it one step further with “smart” indexing technology.

How Many Trials Can You Do in a Millisecond?

Based in Excel/VBA, the model rips more horsepower out of that software than any Microsoft engineer ever intended. Somewhere in the world, someone is using VBA to perform one thousand Monte Carlo simulations per second on a deep data set, and then delivering the results to a graphic-rich spreadsheet that auto-formats an analytical dashboard on the fly.

But if so, chances are they’re using the wrong software; and so are we.

It’s Always a Good Time to Get Serious

So we are in early discussions with a custom software-development company to see about porting the solution from Excel to an interactive, Web-based application environment. We are looking either to outsource the development or to manage it internally, and merely outsource the programming. We’ll let you know how it goes.

At the Risk of Gushing Vinaigrette…

In the meantime, we want to give some credit where it’s due. The good people at Balsamiq Studios let us try out their software-whiteboarding program, Balsamiq Mockups. We promised them we would let our readers know about our experience with the program, good or bad.

One of our mockup screensIt was good. In fact, Balsamiq Mockups is one of the most intuitive and useful applications we’ve used in 25 years. (Coincidently, 25 years is how long balsamic vinegar is aged for. It’s what the mystics call coincidence.)

Never having even heard of the program before yesterday, much less used it, we were able to completely map out a fairly complex user interface in one day. With zero training and zero headaches, we created thirteen mockup screens for discussion with a software engineer.

If Bill Gates could provide software like this, we might have finished that textbook on financial modeling by now. But Balsamiq has an advantage on Microsoft: It’s got two full-time employees. (Judging by Vista, Microsoft has at least twice as many.)

Lots of people are leaving the financial-services industry these days. Even those leaving involuntarily seem to be doing so with relief; we note John Thain as an exception.

Some of these emigres are starting their own businesses, including new software ventures — recognizing that applications used in finance are too often clunky and out-of-date, two or three technology generations behind in terms of user-friendliness and operability. Such applications are not only difficult to use, but difficult to train on — and that means expensive to maintain. Especially when your turnover is high and shrinking margins mean embracing “younger” (ageism for cheaper) “talent” (euphemism for automaton).

The world doesn’t need more software. It needs more good software. And it needs more entrepreneurs. Got a software concept? Take a look at Balsamiq Mockups. After two years (and 25), it feels good to get our idea down on “paper.” ♦