Hottest links for Monday October 14th, 2013 the ontime edition (see Sunday’s edition of hottest links). Get our free daily newsletter (which is being updated to make it superb) and never miss a single linkfest.

Top stories for today include; Some great articles on accounting and shady business deals; Robert Shiller wins the nobel prize in economics, Shiller is my favorite economist, with his excellent work on equity returns, behavioral finance, bubbles, and his professional demeanor, well deserved! Forget Grexit are we getting close to a Frexit as the far right gains power? There is the age old question of whether fat people should have to pay for two airline seats, but what about if the seats are on different sides of the plane? That and much more below.

 

Hottest Links

Value Investing

Distinguish Value from Price By Thinking “Businesslike”

Perhaps the best description of value investing ever written is in Seth Klarman’s 1991 investing classic “Margin of Safety.” [Jim Fink, Investing Daily]

3 Deep Value Ideas Worth a Closer Look: Oversold

Ambassadors Group Inc (NASDAQ:EPAX): consistent aggressive share buybacks, strong recent insider buying,selling at 3.49 per share with 3.29 per share in cash. Ruby Tuesday, Inc. (NYSE:RT): selling at industry and historical discount valuations with strong real estate portfolio. Innodata Inc (NASDAQ:INOD): Annually aggressive share count reductions along with consistent book value per share increases strong financial position. [ShadowStocks]

Can Asia Produce a Precision Castparts (PCP)

Can Asia produce a Precision Castparts Corp. (NYSE:PCP)? PCP grew from a small metal casting workshop to become one of the best compounders in American capital history, up over 1,700x in three decades plus to a global giant with a market cap of $34.7 billion. [Koon Boon Kee, BeyondProxy]

When Analysts Sober Up

Between the government shutdown and the budgetary brouhaha, surely Wall Street analysts have been racing to reduce their forecasts of companies’ earnings for the fourth quarter. [Jason Zweig, The Wall Street Journal]

A Dozen Things From Nassim Taleb About Optionality/Investing

The wise value investor sits and waits patiently for Mr. Market to deliver a fearful market and when the intrinsic value of a company’s shares presents a “margin of safety” buys in quantity. [Tren Griffin, 25iq]

Accounting

Columbia Business Professor Teaches ‘Shady’ China Deal

An internal “CaseWorks” study from Columbia University’s prestigious business school obtained by The Post teaches its students an important lesson: Make millions of dollars while promoting a host of busted Chinese companies — even as investors who held the shares lose hundreds of millions — and you can be written up as an American success story. [Roddy Boyd, New York Post]

In IPO filings, Twitter Restated Revenue Policy

Twitter changed and expanded the description of how it tallies sales from some of its advertising deals in its IPO filings. [Stephen Gandel, Term Sheet]

Twitter’s S-1: More Social Media Company IPO Drama

Twitter, Inc. (TWTR) provides a compelling and efficient way for people to stay informed about their interests, discover what is happening in their world right now and interact directly with each other. [Anthony Catanach, Grumpy Old Accountants]

Economists

The Blo(g)viation Index

Part of what is wrong with the blogosphere is that most bloggers are just too trigger-happy – or rather keyboard-happy. As I said last week, I suspect that the amount they write also exceeds the amount the read. A possible exception is Matt Yglesias, who at least seems to understand that books matter and that those who want to attack me would be well advised to read at least some of them before opening fire. [Niall Ferguson]

Shiller vs Fama?

My knee-jerk reaction to Robert Shiller and Eugene Fama getting the Nobel was that it’s an example of them being honoured for flatly disagreeing. This reaction is partly true: Fama’s thinking is sceptical of the possibility of price bubbles, whilst Shiller’s shows that they can happen. [Stumbling and Mumbling]

 

Funds

Asset Allocation Strategies

I’m adding another allocation from some of my favorite writers at the Butler Philbrick shop.  They did a post here with an allocation below. [Mebane Faber]

Asset Allocation

Talking About Small-Cap Premium, Part 2

There are several problems with this concept. The first is that if the higher returns are compensation for risk, the premiums should be expected to continue. Of course, that isn’t a guarantee they will persist, because risks can show up. [Larry Swedroe, IndexUniverse]

Macro

Futurology — Can Things Only Get Better or Worse?

Extreme and growing inequality in income is one inconsistency, which is the subject of a recent study by the London School of Economics and Oxford University suggesting that things are getting worse not better. [Mark Harrison, CFA Institute]

Time to take bets on Frexit and the French franc?

We have a minor earthquake in France. A party committed to withdrawal from the euro, the restoration of French franc, and the complete destruction of monetary union has just defeated the establishment in the Brignoles run-off election. [Ambrose Evans-Pritchard, The Telegraph]

Hottest Links: Not The Onion

37st man forced to pay for two seats on jet from Ireland

Les Price, 43, had to pay for the extra space when flying to Ireland and back from Wales as airline policy dictates anyone over 20 stone has to book the extra space. [Hayley Dixon, Independent.ie]