Random Reads - week to Feb 9, 2018



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...

Short sellers eye better days after Steinhoff and Carillion wins | FT
“In the past few months there have been a number of accounting-related shorts, such as Steinhoff International and Carillion, that have been big money makers,” says Alper Ince, an investor in hedge funds at Paamco. “I think there is an expectation among short sellers that we may see more of these after years of companies making big acquisitions and taking on more leverage”.


Big Un Limited's cash flow secret revealed | AFR
Big Un Limited, the high flying online video firm whose stock gained 1600 per cent in 2017, has admitted its customers are paying for its services with money advanced to them by a Sydney finance company that has itself been issued more than 3 million shares in Big.

Would I lie to you? The 6 company mistruths to be wary of... | livewire
Company management has, at times, been known to 'stretch the truth' when communicating with investors. So, with February reporting about to start in earnest, we thought it timely to highlight 6 common types of 'mistruths' to keep a watch for...

Performance Consistency is not an Indicator of Equity Fund Manager Skill | Behavioural Investment
By definition, long-term, high active share, conviction investors will not deliver performance consistency over the short-term. There will be periods (often prolonged) when their style is out of favour and the ‘market’s perception’ diverges materially from their own. Through such spells of challenging performance we should expect them to remain disciplined and faithful to their philosophy and approach;

Pants down in the melt up | InvestSmart
...the latter stages of every bull market produce a new vocabulary to justify it. The dotcom boom delivered “first-mover advantage”, “monetising” and a new metric – “profit before marketing costs”. Good one that... This bull market has produced “the melt up”.

State Street ramps up pressure on excessive executive pay | FT
State Street Global Advisors is to get tough on executive pay — and it will signal its displeasure over lavish packages by refusing to back them. Previously, the $2.8tn-in-assets manager voted “for” or “against” on pay. Now the Boston group, the manager of the world's largest passive investment fund, will indicate its unhappiness by abstaining.

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10k Words | August 2022

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Feel the Cash Burn as Profit Season Closes (or "In memory of Pocketmail")

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Markets Take Time to be Efficient

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In the main we accept that markets price in known information relatively efficiently. But... information in the public domain is not always widely digested or assimilated and understood. There is evidence showing stock prices react gradually rather than instantly to new information. This is the third excerpt from a brief paper Equitable Investors put together, " Seeking Advantage -  Focusing on the Underlying Drivers of Excess Returns Most Evident in Smaller Companies to Optimise Investment Portfolios for Return and Risk ". You can read the previous excerpts at blog.equitableinvestors.com.au  a nd you can find the paper itself at   www.equitableinvestors.com.au . While information may exist in the public domain, it may not have been widely disseminated; or it may be widely disseminated but a broad base of investors may not have the additional knowledge to understand the materiality of one piece of information among many. The smaller a company is, the less likely it ...
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