The Big Picture for the Week of October 17, 2010

Early in the day yesterday Joe Moglia was interviewed about his second career (actually he went back to a career he had when he was much younger). Moglia was was CEO at Ameritrade (current Chairman) and is now an unpaid assistant football coach of sorts for the University of Nebraska Cornhuskers.

The way the interview went Moglia seemed thrilled to have the "job" which was obvious and there was more than an implication that he could get a head coaching job which was not so obvious (to me) even with his experience but maybe he could.

This is a great template (even if unrealistically successful for most of us) for how retirement needs to evolve or more correctly is now evolving. Over the years for all the times he's been interviewed it would be difficult to have missed how much he loved coaching football. He is willing to do it for free and (based on the interview) there could be an opening to a paid gig.

A story like this tying in to sports is an easy one for me to relate to. Depending on where you live there are a lot opportunities, of course the key is willing to do some job for free because you love it that much. When you find something that you feel lucky to be doing for free you will do a great job which then brings the potential for something paid to develop.

On a similar note there was this article yesterday on Yahoo Finance with very short stories about how people are innovatively building their retirement strategy. One little story was about a retired school teacher with no debt who ushers at university sporting events and cultural events which allows her to see things for free and presumably puts a few bucks in her pocket without feeling tethered to a time clock. Also embedded in her story were several references to living below your means.

And as a quick followup from yesterday; the Market Vectors China ETF (PEK). Yesterday I mentioned that the fund is very broad based and heaviest in financials. I also said anyone interested in the fund needs to look under the hood to understand that the exposure is being replicated with derivatives which isn't usually an issue except during times of market trauma. Well PEK appears to be having issues already after only two days and far sooner than certainly I would have expected. With a big tip of the hat to Ron Rowland PEK is trading at a double digit premium to NAV. I mentioned in my post that at times A-shares have traded at huge premiums to shares listed elsewhere in the past (talking the same companies) and at this point I do not know if this has anything to do with that although I doubt it.

This makes for an important reminder about new ETFs that I used to include in just about every article about new funds that I wrote for theStreet.com which is that new funds, especially those that are not plain vanilla, need to be given a little time to trade to let things like this pop up (or not). If this turns out to be an issue with the creation/redemption process (which seems more likely, or maybe it is an arbitrage of some sort that is beyond me) then I would think that this is just a kink to be mostly worked out and if that is correct then the premium would probably suck right out of the price leaving someone holding the bag. Based on the first couple of days trading it does look like PEK will be a very popular trading vehicle.

As I said yesterday I prefer narrow exposure for China.