Hottest links for Thursday September 12th, 2013 (see Wednesday‘s edition of hottest links here). Top stories for the day include: Accounting fraud in Asia, an in-depth look from a value investor on what most non-Asian investors tend to miss; Aswath Damodaran is back, and the professor has an updated post looking at the valuation of possibly the hottest stock right now, Tesla Motors Inc (NASDAQ:TSLA); 5 years after the financial crisis started with the bankruptcy of Lehman Brothers Holdings Inc Plan Trust (OTCMKTS:LEHMQ), the company is still in a complex bankruptcy process and Elliot Spitzer is out of a job; Paul Singer is a busy man these days, and he might end up in the Supreme Court for a little chat with Cristina Kirchner over some money, warships and other related topics; Are you smarter than a monkey? A new study suggests perhaps not; Herbalife Ltd. (NYSE:HLF) is back in the news, can you believe it? That and much more below.
Hottest Links: Stories
People Make The Same Basic Investment Decisions As Monkeys
New research published this month in the journal Proceedings of the National Academy of Sciences (PNAS) can be rational economic actors, just like humans. Scientists studied monkeys and used water as a form of wealth; see the full study. [Simone Foxman, Quartz]
Druckenmiller Bloomberg Interview videos and transcript
Stan Druckenmiller is back and he makes a big entrance. The once shy hedge fund manager was on Bloomberg for a lengthy interview yesterday. Druckenmiller discussed his views on the U.S. economy, hedging, Fed policy and more. While so called proclaimed experts do this everyday, Druckenmiller stands out as one of the sharpest minds on Wall Street. Check out the videos and transcript here. [ValueWalk]
Chevron Weighs A Surprising – And Savvy – Legal Maneuver
In a motion filed Monday in federal district court in Manhattan, Chevron Corporation (NYSE:CVX) states that it may drop damages claims possibly worth tens of millions of dollars against Steven Donziger, the lead U.S. lawyer behind a $19 billion judgment issued against the oil giant by an Ecuadorian court in February 2011. [Roger Parloff, CNNMoney]
Returns From Alternative Asset Classes
People are attracted to so-called alternative assets for various different reasons. [The Investor, Monevator]
| 1-year (%) | 5-year (%) | 10-year (%) | |
| Antique furniture | -3 | -15 | -19 |
| Watches | 4 | 33 | 83 |
| Chinese ceramics | 3 | 43 | 83 |
| Jewellery | 2 | 51 | 146 |
| Wine | 3 | 3 | 182 |
| Art | -6 | 12 | 183 |
| Coins | 9 | 83 | 225 |
| Stamps | 7 | 60 | 255 |
| Classic cars | 28 | 115 | 430 |
| — | |||
| KFLII | 7 | 40 | 174 |
| Gold | -23 | 68 | 273 |
| Prime London property | 7 | 27 | 135 |
| FTSE 100 | 12 | 11 | 55 |
Source: Knight Frank
Value Opportunities in Europe: A Case Study
Reiner Sachs, Frank Fischer has accumulated an enviable investment track record by following a contrarian, value approach to investing in European small caps, with a focus on dividends and capital preservation. A case study involving a small cap European company, here. [Oliver Mihaljevic, BeyondProxy]
Hedge Fund Test
Do you have what it takes to run a quality hedge fund? This is a funny test, using possible real questions and what should be the real answers. [Veryan Allen, Hedge Fund]
Levine on Wall Street: Lehman Still Bankrupt, Spitzer Still Jobless
If you’re starting a job in finance this week, a funny thing to do would be, when someone mentions Lehman Brothers, you say, “Lehman Brothers Holdings Inc Plan Trust (OTCMKTS:LEHMQ)? What’s that? Never heard of it.” [Matt Levine, Bloomberg]
Getting Schooled in Risk: The Lessons of Poker
Suppose you hold A? J? Flop comes J? 2? 7? You put in a pot-size bet, and your opponent goes all in. What hands are you behind against? And how does this apply to investing? Find that out here. [Druce Vertes, CFA Institute]
A Dozen Things I Learned from John Templeton
John Templeton was a great investor who died at a very old age several years ago. Here is what you can learn from him. The latest ’12 things you can learn’ list is out. [Tren Griffin, 25iq]
Are National Grid shares a good buy?
National Grid plc (ADR) (NYSE:NGG) (LON:NG) is the company that owns and operates the electricity and gas transmission networks in England and Wales. With a market cap of around £28 billion and with a consistent dividend, is the stock a good buy at 746p a share? [John Kingham, UK Value Investor]
Improving Performance
Gary Klein’s book, “Seeing What Others Don’t: The Remarkable Ways We Gain Insights” is really about three things: (1) what sparks an insight; (2) what prevents us from grasping them; and (3) how can we improve the flow of insights? [Shane Parrish, Farnam Street]
Can The CFTC Come Up With A Better Regulatory Model For HFT?
The CFTC is looking to build a regulatory framework around high-speed and algorithmic futures trading. HFT has been criticized by many including Michael Price. Is the CFTC the best model to using going forward? [John Carney and Jeff Cox, NetNet]
US high court mulls taking up Argentina bonds case
The Supreme Court this month will announce whether it will hear an appeal from Argentina, which is seeking to have overturned a court judgment to repay $1.47 billion to two hedge funds. [AFP]
Detecting Accounting Fraud in Asia (Part 1)
A really great in-depth analysis on how to detect possible accounting shenanigans in many Asian countries. A look at both the methodology and some suspect companies. [Koon Boon Kee, BeyondProxy]
Many A Slip Between The Cup & The Lip
In the Tesla Motors Inc (NASDAQ:TSLA) valuation, I made the judgment that Tesla would have Audi-like revenues and Porsche-like margins to conclude that the equity was worth $8.15 billion today. [Aswath Damodaran]
How Shady Was Charlie Ergen’s Wireless Shopping Spree?
The Wall Street Journal has a fun story today about Gary Howard, a former director of DISH Network Corp (NASDAQ:DISH), who resigned a few weeks ago over what he apparently viewed as some shady dealings in connection with Dish’s bid for bankruptcy, and possibly deadly wireless-network company LightSquared. [Matt Levine, Bloomberg]
If You Can’t Explain it With Accounting, You Can’t Explain it
Cullen believes that accounting can (and should) also be applied to the field of economics. So how about we take a quick look at some macro and do some accounting? [Cullen Roche, Pragmatic Capitalism]
National Latina Organization Asks FTC To Investigate Herbalife
Herbalife Ltd. (NYSE:HLF) was blasted by Bill Ackman in a letter to the firm’s auditing firm, PwC. Additionally, the President of a latino organization has complained to the FTC about the company. Check out both stories here and here. [ValueWalk]
Hottest Links: Not the Onion
Finns to Use Angry Birds to Teach Chinese Children
Angry Birds will be used to fire Chinese children’s imaginations after the Finnish company behind the game announced plans to launch an educational product in China. [Helsinki, AP]
