Hottest links for Wednesday October 30th, 2013 the late edition (see Tuesday’s edition of hottest links). Get our free daily newsletter (which is being updated currently to make it even better) and never miss a single linkfest.
Top stories for today can be found below. A great new profile on Dan Loeb and Bob Chapman (always looking for publicity) even attacks his “friend” in the story. Did one of the most famous hedge fund managers kill a Cuban boy in 2002? You answer; Lots of great value write ups, behavioral finance articles as well today; And dont miss not the Onion, guess which washed up former famous actors fought over a dinosaur skull which might have been stolen?
Hottest Links: Stories
FRMO Corp. (FRMO) Valuation
FRMO Corp. (OTCMKTS:FRMO) is a strange entity, but basically it owns a stake in Horizon Kinetics (asset manager), has cash and investment assets, revenue sharing stream and things like that. More on that later. [KK, The Brooklyn Investor]
Identifying Behavioral Woes of Institutional Investors
Various investors’ behaviors such as herding, performance chasing, and complex committee structures could cause poor manager selection and underperformance, according to attendees at the Opalesque Nordic Roundtable. [Sage Um, aiCIO]
AKKA SA – Finally a French- German Success Story?
Akka Technologies SA (EPA:AKA) provides high-technology engineering consulting services. The Company specializes in scientific project management and engineering, mechanical, electronic, computing, and telecommunications project management and engineering, as well as industrial project management and engineering. [ValueAndOpportunity]
Over the years, I’ve found that simply asking why and listening to the quality of the response is the best bullshit filter. If answers come back in cliches and generalizations, that’s an indication that more thinking is needed.[Shane Parrish, Farnam Street]
Long Term Investors Are Too Short Term
As the readers of my posts already know, I learned critical elements of security analysis and portfolio management by handicapping thoroughbred horses at the New York racetracks. [A. Michael Lipper, CFA Institute]
Frenzy of Deals, Once Expected, Seems to Fizzle
Deals were back! Confidence had returned! Warren Buffett was buying H.J. Heinz Company (NYSE:HNZ)! Dell Inc. (NASDAQ:DELL) was going private! American Airlines was merging with US Airways Group Inc (NYSE:LCC)! [Andrew Ross Sorkin, DealBook]
How Many Stocks Should You Own?
In the fifth chapter of The Intelligent Investor, titled “The Defensive Investor and Common Stocks”, Graham lays down the foundation for picking stocks under a section titled – Rules for the Common Stock Component. [The Safal Niveshak Post]
Tiger Veda Starts EADS, Osram Licht Stakes: Q3 Letter
Manish Chopra’s hedge fund Tiger Veda initiated a few new positions in the third quarter according to their Q3 letter. Tiger Veda bought Osram Licht AG (ETR:OSR) (FRA:OSR) (OTCMKTS:OSAGF), EADS NV (EPA:EAD), and KAR Auction Services Inc (NYSE:KAR). [Market Folly]
Black Box Investing Versus Common Sense Quant
Quantitative investing has developed an unjustified PR problem based on the unfortunate tendency of many to associate all quantitative approaches with “Black Box” investing. [David Foulke, Turnkey Analyst]
Paul Singer In Q3 Letter Warns Of Growing Dangers To Economy
Paul Singer’s Elliott Management happens to be one of the few big hedge funds that’s seeing attractive opportunities and is beefing up its capital to stay ready. In the latest quarterly letter, which was obtained by ValueWalk. [Tabinda Hussain, Value Walk]
The Best Little Hedge Fund You Never Heard Of
Fixed Income Arbitrage is most famous for going bankrupt. There is no shortage of examples, starting with Long-Term Capital Management in 1998-1999. The strategy is full of concepts that investors love to hate, such as leverage and adding to trades that lose money. [Climateer Investing]
Hedge Funds—A New Era of Transparency and Openness
The hedge fund industry as a whole is experiencing dynamic change—moving from what some would say was a secretive industry, to a widely-recognized and influential group of investment managers. [Mary Jo White Law.Harward.edu]
Proxy Adviser ISS May Not Help Investors
You may be dimly aware of Institutional Shareholder Services. That’s the proxy advisory firm upon whom many mutual-fund managers rely when exercising their voting powers as corporate shareholders. [Brendan Conway, Focus on Funds]
Mortgage REITs, ETFs Slammed
The selloff, as Mike Aneiro explains over at Barron’s Income Investing, follows Sterne Agee’s call for American Capital Agency Corp. (NASDAQ:AGNC) to cut its quarterly dividend from 80 cents to 50 cents. AGNC’s 8.6% slump is a driver of the 3.5% slide in iShares FTSE NAREIT Mortg.REITIn Fd(ETF) (NYSEARCA:REM) and Market Vectors Mortgage REIT Income ETF (MORT). Both ETFs are at two-week lows, reflecting glum investor opinion. [Brendan Bonway, Focus On Funds]
Spot The Spanish Reality
Spanish sovereign bond spreads have collapsed this week to their lowest (least risky) in 30 months at a mere 229bps. [Tyler Durden, Zero Hedge]
Richard Thaler on Behavioral Economics
Global Synchronized Goldilocks Markets?
While that’s a touch too Candide-like for my tastes, I cannot deny that cconomic growth has been positive while inflation has been subdued, and the Fed is not tapering anytime soon. [Barry Ritholtz, The Big Picture]
Do investors have too much information?
Rather than train her sights on prosecuting Wall Street executives, SEC Chief Mary Jo White has decided to focus her attention on a hitherto unknown problem, investor “information overload.” [Eleanor Bloxham, TermSheet]
Ackman Sees Expansion of Activist Investing to Europe
The investor William A. Ackman said on Tuesday that he believed activist investing by shareholders would be an increasing trend in Europe in the coming years. Mr. Ackman touched on a variety of topics on Tuesday, including his unsuccessful bid to change the culture at J.C. Penney Company, Inc. (NYSE:JCP) by bringing in a new chief executive and his public spat with the investor Carl C. Icahn about Herbalife Ltd. (NYSE:HLF). [Chad Bray, DealBook]
JPMorgan Sees ‘Most Extreme Excess’ Of Global Liquidity Ever
A new report by JPMorgan Chase & Co. (NYSE:JPM) says the bank’s measure of excess global money supply has reached an all-time high. [Ambrose Evans-Pritchard, The Telegraph]
Little Big Man
Once again, in October, Dan Loeb was lobbing grenades. This time his target was Sothebys (NYSE:BID), the international auction house, founded in 1744, that, along with chief rival Christie’s, owns the high-end business of reselling the art, real estate, jewelry, furniture, and other knickknacks of the wealthy. [William D. Cohan, Vanity Fair]
The “Party Conversation” Indicator
It does not take long to find out where we are within the current investment cycle as one of three things will happen; 1) no one wants to talk about their investments; 2) a comment about investing might arise, or 3) they tell you everything about their latest investment success. The chart below explains the concept. [Lance Roberts, Pragmatic Capitalism]
The Thermometer of the Stock Market
have also been participants in the US stock market since 1980 and are very aware of big swings in enthusiasm for owning common stocks. So we thought it would be helpful to share our opinion on the current temperature of