Random Reads
Warren Buffett says, “I just sit in my office and read all day.” Not everyone can afford to devote themselves to reading to that extent so here's a shortcut - the headlines that caught our eye this past week and compelled us to click and read.
Greenlight Q3 '17 letter | Greenlight Capital
Given the performance of certain stocks, we wonder if the market has adopted an alternative paradigm for calculating equity value. What if equity value has nothing to do with current or future profits and instead is derived from a company’s ability to be disruptive, to provide social change, or to advance new beneficial technologies, even when doing so results in current and future economic loss?
The Morningstar Mirage | WSJ
Investors everywhere think a 5-star rating from Morningstar means a mutual fund will be a top performer—it doesn’t.
There’s a link between CEOs who torture the English language and poor stock performance | MarketWatch
"Academic research shows when management is trying to hide bad news, they use language that is not easily understood. In so doing, they eat up time, so there is less time for the Q&A with the analysts on the call...."
Marks and Klarman on Lessons from Big Mistakes | Novel Investor
"One is stay away from bad people. When you’re with bad people if you fight them you end up wasting a huge amount of time, you’re not going to change them, and so there are a lot of cheap stocks that should be cheap because they think that your money is their money and they’re not going to change."
Feeding Babies in China Is a Booming Business Again | WSJ
Selling baby food should be a steady business, but in China it has been anything but. The world’s largest infant-formula market is booming again. It probably won’t last.
Bitcoin is approaching Dutch tulip hype levels, says expert | Stochkead
When you evaluate a stock you can look at the underlying fundamentals. But with Bitcoin there is no specific inherent value so it is completely esoteric.
The Bitcoin Boom: Asset, Currency, Commodity or Collectible? | Musing on Markets
... at the risk of raising hackles all the way around, I will argue that bitcoin is not an asset, but a currency, and as such, you cannot value it or invest in it. You can only price it and trade it.
The Race to Save Coffee | The Washington Post
America's favorite beverage is under attack from climate change and other woes. Science may offer a solution.
Alignment – Other Peoples Money | Glennon Capital
There are fund managers I have met who don’t own a single share personally, don’t have investments in their funds and their largest asset is a residential house. I cannot understand this attitude, in the same way I cannot understand black box stock picking, people who think an algorithm can pick stocks.
Australian Interest Rates: Like Watching Grass Grow | Pimco
PIMCO’s estimate of the neutral policy rate (the level that neither stimulates growth nor slows it) is 3% for Australia – what we call the New Neutral because it is likely to remain lower than in the past. A neutral rate of 3% would put the 10-year bond yield at around 3.75%.
The $2.5 Trillion Paradox: "While The Short End Is Optimistic, The Long End Has Never Been More Pessimistic" | ZeroHedge
"The rates market is sending diametrically opposite messages over the last few weeks. The front of the curve is increasingly confident about a Fed that will hike not only in December but at-least two more times next year. But, the flattening in the intermediate to long end of the curve is sending a clear end of business cycle message."
Amazon’s profits don’t come cheap | WSJ
It is worth noting that Amazon’s free cash flow dipped into negative territory for the third quarter if one includes the payments made to cover its capital lease obligations
Ex-Hastie Services finance boss gets two years for cooking the books | Stockhead
The former chief financial officer of Hastie Services, Glyn Raines, has been sentenced to two years in prison for falsifying company accounts.
Greenlight Q3 '17 letter | Greenlight Capital
Given the performance of certain stocks, we wonder if the market has adopted an alternative paradigm for calculating equity value. What if equity value has nothing to do with current or future profits and instead is derived from a company’s ability to be disruptive, to provide social change, or to advance new beneficial technologies, even when doing so results in current and future economic loss?
The Morningstar Mirage | WSJ
Investors everywhere think a 5-star rating from Morningstar means a mutual fund will be a top performer—it doesn’t.
There’s a link between CEOs who torture the English language and poor stock performance | MarketWatch
"Academic research shows when management is trying to hide bad news, they use language that is not easily understood. In so doing, they eat up time, so there is less time for the Q&A with the analysts on the call...."
Marks and Klarman on Lessons from Big Mistakes | Novel Investor
"One is stay away from bad people. When you’re with bad people if you fight them you end up wasting a huge amount of time, you’re not going to change them, and so there are a lot of cheap stocks that should be cheap because they think that your money is their money and they’re not going to change."
Feeding Babies in China Is a Booming Business Again | WSJ
Selling baby food should be a steady business, but in China it has been anything but. The world’s largest infant-formula market is booming again. It probably won’t last.
Bitcoin is approaching Dutch tulip hype levels, says expert | Stochkead
When you evaluate a stock you can look at the underlying fundamentals. But with Bitcoin there is no specific inherent value so it is completely esoteric.
The Bitcoin Boom: Asset, Currency, Commodity or Collectible? | Musing on Markets
... at the risk of raising hackles all the way around, I will argue that bitcoin is not an asset, but a currency, and as such, you cannot value it or invest in it. You can only price it and trade it.
The Race to Save Coffee | The Washington Post
America's favorite beverage is under attack from climate change and other woes. Science may offer a solution.
Alignment – Other Peoples Money | Glennon Capital
There are fund managers I have met who don’t own a single share personally, don’t have investments in their funds and their largest asset is a residential house. I cannot understand this attitude, in the same way I cannot understand black box stock picking, people who think an algorithm can pick stocks.
Australian Interest Rates: Like Watching Grass Grow | Pimco
PIMCO’s estimate of the neutral policy rate (the level that neither stimulates growth nor slows it) is 3% for Australia – what we call the New Neutral because it is likely to remain lower than in the past. A neutral rate of 3% would put the 10-year bond yield at around 3.75%.
The $2.5 Trillion Paradox: "While The Short End Is Optimistic, The Long End Has Never Been More Pessimistic" | ZeroHedge
"The rates market is sending diametrically opposite messages over the last few weeks. The front of the curve is increasingly confident about a Fed that will hike not only in December but at-least two more times next year. But, the flattening in the intermediate to long end of the curve is sending a clear end of business cycle message."
Amazon’s profits don’t come cheap | WSJ
It is worth noting that Amazon’s free cash flow dipped into negative territory for the third quarter if one includes the payments made to cover its capital lease obligations
Ex-Hastie Services finance boss gets two years for cooking the books | Stockhead
The former chief financial officer of Hastie Services, Glyn Raines, has been sentenced to two years in prison for falsifying company accounts.
