Hottest links for Friday, 13th December, the late edition (see Thursday’s edition of hottest links). Get our free daily newsletter (which HAS BEEN RECENTLY UPDATED) and never miss a single linkfest. Also, now if you sign up you will get our new e-book on value investing.
Top stories for today are included below. This afternoon, we’ve got a killer crossword puzzle based on current investment themes and trends (and it’s a tough one!), a fascinating look at the top 10 white collar prison sentences, and a poignant look at the downfall of John Taylor.
Hottest Links: Stories
Value Investing
Understanding the Relationship between Stock Prices and Earnings
Understanding the relationship between earnings and stock prices can create interesting (but possibly fleeting?) returns. [Wesley R. Gray, Turnkey Analyst]
Investment Fads and Themes, 1996-2013
First, let’s talk about Elon Musk, the man with not one publicly-traded rocket ship but two – both Tesla Motors Inc (NASDAQ:TSLA) and SolarCity Corp (NASDAQ:SCTY) were among the hottest stocks in the market in a year of very hot stocks overall. The trading action in Musk-related companies was more exciting than the Facebook rebirth, the Twitter Inc (NYSE:TWTR) IPO or the 3D Printing explosion. [Joshua M Brown, The Reformed Broker]
Satisfying Your Need for Coherence
Daniel Kahneman, in his book, “Thinking Fast and Slow,” describes two modes of mental processing: System 1, which is primal and automatic, and System 2, which is slower, and more methodical and analytical. [David Foulke, Turnkey Analyst]
Funds
US Stocks Cheap on 12 of 15 Historical Valuation Measures
Is the S&P 500 (INDEXSP:.INX) cheap or expensive relative to historical valuation metrics? The bubble talk seems to be mostly subjective and depends mainly on who is doing the talking. Someone who’s missed the run-up is more likely to call it a bubble and someone who is first chasing and buying in now is more apt to dismiss the bubble talk out of hand. [Joshua M Brown, The Reformed Broker]
Wall Street’s best trades of 2013
With that in mind, investors around the world have poured into Japanese equities. The benchmark Nikkei 225 is up more than 50% in 2013, handily trouncing the gains of the broad global equity index known as the MSCI World index. (The Tokyo Stock Exchange Topix index is also up about 46%.) [Matt Phillips, Quartz]
World’s Largest Hedge Fund Uses Twitter For Real-Time Economic Modeling
The use of Twitter and other social media to predict and trade on or, reflexively, generate interest in various assets is nothing new and has been around for years. Whether or not this strategy works is still unclear: the only “hedge fund” that traded purely on Twitter signals. [Tyler Durden, Zero Hedge]
Calpers Blasts Icahn’s Apple Plan: ‘Icahn Is a Johnny Come Lately’
Anne Simpson, the head of corporate governance at Calpers, or California Public Employees’ Retirement System, said Thursday the pension plan won’t be supporting Mr. Icahn’s push for a bigger buyback at Apple Inc. (NASDAQ:AAPL) as they are happy with the company’s already-announced plan for its capital. [David Benoit, MoneyBeat]
Fidelity Beclowns Itself
Fidelity Investments, fresh from the embarrassment of having missed the entirety of the ETF movement’s formative years, is determined not to allow that to happen again. [Joshua M Brown, The Reformed Broker]
“The case for sending America’s unemployed abroad”
Although North America and Europe have finally emerged from the darkness of the global financial crisis, and although the stratospheric growth rates of Brazil, China, and India have come down to Earth, the economies of the West still lag behind those in the rest of the world. [Climateer Investing]
The Downfall of John Taylor
The Champagne was flowing at the 21 Club in New York City. It had been a good year. FX Concepts employees, gathered at the 2006 holiday dinner party, quieted down as the firm’s founder, chairman, and CEO took to the front of the room for his address. [aiCIO]
Misc
Five Accounting Red Flags the SEC is Watching
The Securities and Exchange Commission has a new Financial Reporting and Audit Task Force aimed at catching the next big accounting fraud faster — and the staff has its list of red flags. [Emily Chasan, The Wall Street Journal]
Holiday Gift Ideas for the Trader in Your Life
It’s that time of the year when you probably want to pick up a bauble or two for your favorite trader, fund manager or analyst. [Barry Ritholtz, Bloomberg]
The People of the County of New York vs. Bryan Caisse
Over five days in mid-October, prosecutors with the New York County District Attorney’s Major Economic Crimes unit brought forth a stream of witnesses who told a grand jury about a money manager named Bryan Caisse. [Roddy Boyd, SIRF]
A Reordering of the Top 10 White Collar Prison Sentences?
Keith Simmons is not a household name. His Ponzi scheme, which was uncovered in 2009, cost his victims more than $35 million, a much smaller figure than, say, the $20 billion fraud perpetrated by Bernie Madoff (which came to light five years ago Wednesday) or R. Allen Stanford’s $7 billion scam. [Joe Palazzolo, LawBlog]
Goldman Sachs Crossword Puzzle
Goldman Sachs Group Inc (NYSE:GS) analysts have scoured through a year’s worth of charts to put together a killer crossword puzzle, connecting the bank’s “key investment themes, and the implications of these for companies, sectors and countries.” [Mathew Boesler, Business Insider]
Hottest Links: Not the Onion
Chainsaw-wielding man in fishnet stockings chased Mr. Whippy van
The man in his 20s was arrested for disorderly behaviour in Rangiora, New Zealand, on Saturday evening when the terrified ice cream van driver rang police fearing for his life. Officers said they were easily able to identify the culprit, who emerged from a property revving his chainsaw before giving chase to the Mr Whippy van. [Metro.Co.UK]
