This line from some guy at State Street made me chuckle: “We just worked with a client who had hired two funds of funds to generate alpha, and needed someone to structure the beta.” I guess “generating alpha” is a “nu” buzzword.

Michael Santoli wrote about Chico’s: “Glamour stocks with high multiples from companies that have generated too much confidence in their ability to hit their numbers make exceedingly poor risk-reward investments over time, unless you know the perfect time to exit. And nobody does.” Well, some people do.

Here are the (lightly edited) bits I found interesting in this week’s issue:

“California is the fourth-largest U.S. oil producer, after Louisiana, Texas and Alaska.” — Christopher Williams

“Interactive Brokers is now providing a new service called Options Intelligence Report which includes a table that ranks the top 20 gainers in implied volatility.” — Theresa Carey

“The real tuition cost, after inflation, of private colleges since the 1975-76 school year has risen 165%. It was $21,235 in the 2005-2006 school year, compared to the $8,026 of 30 years earlier … the growth in real GDP has almost exactly matched the growth in real private college tuition since 1975 — the U.S. economy is now 2.58 times as large, in real terms, as 30 years ago … Private college costs have far outstripped increases in median family income — it’s more than twice as hard today for the median-income family to pay for private college tuition as 30 years ago. But this comparison is specious. The median-income family couldn’t afford private college tuition 30 years ago, either … Increases in public college tuition have actually outstripped the increases in private college tuition — here the real increase since 1975 is close to 260%. The historical target market for public universities — median-income families hoping to provide their children with the means to enter the upper income strata — saw its real income increase by only 27% during the period. This is the real college cost crunch. It is much, much harder for a policeman or a school teacher to send his child to State University today, as opposed to 30 years ago.” — Edward McQuarrie [ed. an interesting take on education costs.]

“Success in Hollywood is measured typically in how much money you spend, not how much you make.” — Alan Abelson

“In two years, we’ve lost about $80 billion of market cap or enterprise value in the REIT sector to either privatizations, liquidations or mergers … Mills is the typical story of a failed real-estate enterprise: good real estate but too much leverage. They overexpanded and were too ambitious … In the U.S., the market cap of real-estate companies is about $400 billion. In Europe it is about $200 billion, and in Asia it is about $350 billion. That’s about $550 billion of market cap of publicly traded real-estate companies outside the U.S., a very rich universe of companies to choose from.” — Marty Cohen, interviewed by Sandra Ward

“An ease of nearly 50 basis points already is priced for 2007, according to Eurodollar rate future contracts. In turn, that explains why Treasury yields currently sit at five-month lows and well under the present funds rate.” — Michael Mackenzie

“LME three-month nickel hit a record of $30,000 a metric ton Aug. 23 and has hovered nearby since … Nickel is up 124% from $13,400 a ton in January, making it the best base-metals performer this year.” — Andrea Hotter

“Sales of new properties in Hong Kong — predominantly high-rise apartments — hit a record low in the second quarter of this year of just 530 units a month. Even in the second quarter of 2003, when Hong Kong was wracked by the SARS crisis, 1,900 new apartments were being sold a month … After the Asian financial crisis struck in 1997, Hong Kong property market prices fell about 60% from their peak and only began rising in late 2003. Even now, property prices would have to rise about 50% to regain their 1997 highs.” — Jon Ogden

“Financials’ price-earnings multiple relative to the market is back to about the all-time high set in 1998 before the global financial crisis hit. (This is largely because the overall market multiple has compressed a good deal.)” — Michael Santoli

“Buying home builders at or close to book value has usually been a winning strategy. Over the past 20 years, the stocks have had a median return of 70% in the year after they traded down to book value. The downside? Back in 2000, the group traded down to 80% of book value, which suggests 20% downside risk from current levels.” — Andrew Bary

Copyright © 2006 Dow Jones & Company, Inc.