Hottest links for Thursday, 2nd January, the late edition (see Tuesday’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 below.  We’re kicking off the new year with some great stories, including an in-depth look at the up and coming area of behavioral finance, Berkshire rewriting the newspaper game, Wall Street investing in ex-cons, and Bill Gates being told his charity pledge is “worthless.”

Hottest Links: Stories

Value Investing

2013: the Year of Behavioral Finance

First, we saw Robert Shiller win the Nobel Prize in economics. Behavioral finance is still an emerging concept to some degree and very earlier in its overall development. [Cullen Roche, Pragmatic Capitalism]

bear21 Hottest Links

Nouriel Roubini — a.k.a. ‘Dr. Doom’ — is getting optimistic

The respected New York University economist has made it clear that he’s not fond of the nickname (he thinks “Dr. Realist” has better ring to it). He’s certainly been pivoting toward a more optimistic outlook over the past few months. Now, his latest 2014 outlook definitely bolsters his nascent bullish credentials. [Ben Eisen, The Tell]
A good year ends, but what’s next for stocks?

However, the scattered nature of the debate, where each side (bubble or no bubble) finds something in the market that supports its thesis reminds me of the story about the blind men who are allowed to touch an elephant and come to very different conclusions about what it looks like. [Aswath Damodaran, Musings on Markets]

The Psychology of Scarcity, Part 1

As Adam Smith pointed out back in 1776, scarcity is fundamental aspect of the human condition which, while often impossible to remove entirely, can sometimes be managed. In Scarcity: Why Having Too Little Means So Much, Sendhil Mullainathan and Eldar Shafir discuss the notion of scarcity, how it can affect our decision making, and steps we can take to manage it. [David Foulke, Turnkey Analyst]


Q4 2013 Performance & Portfolio Update

The best performers during the quarter have been Lectra and RealDolmen. The worst performer, Fairfax Financial Holdings Ltd (TSE:FFH) (OTCMKTS:FRFHF), underperformed mainly due to the weakness of the Canadian dollar against the euro. [Wet Art Capital]

Hottest Links

Three Ways

The three lines represent long iShares Barclays 20+ Yr Treas.Bond (ETF) (NYSEARCA:TLT), iShares IBoxx $ Invest Grade Corp Bd Fd (NYSEARCA:LQD), and SPDR S&P 500 ETF Trust (NYSEARCA:SPY). I was going to use one of the big junk bond ETFs to show lower grade credit risks, but neither iShares iBoxx $ High Yid Corp Bond (ETF) (NYSEARCA:HYG) or SPDR Barclays Capital High Yield Bnd ETF (NYSEARCA:JNK) was in existence at the end of 2006. [Tom Brakke, Research Puzzle]

14 0101 three ways Hottest Links

At Papers, Berkshire Rewrites Its Script

Shortly after Warren Buffett’s Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B) bought the Richmond Times-Dispatch newspaper in 2012, things began to change. [Anupreeta Das, The Wall Street Jornal]

The World Economy’s Shifting Challenges

As 2013 comes to a close, efforts to revive growth in the world’s most influential economies – with the exception of the eurozone – are having a beneficial effect worldwide. All of the looming problems for the global economy are political in character. [George Soros, Project Syndicate]

ETFs Blew Away One Record in 2013 and Edged Out Another

U.S.-listed ETFs finished 2013 with $1.7 trillion in assets under management, a fresh record. The gains reflect both the steep rise of the stock market during the year, as well as strong investor inflows. [Brendan Conway, Focus on Funds]

A Few Brave Investors Scored Huge, Market-Beating Wins

A trader who made more than $100 million from a $10 million bet against gold. A hedge fund that gained 42% after a bullish wager on stocks. A firm that saw returns of 48% thanks in part to soaring Japanese stocks. [Gregory Zuckerman, Rob Copeland and Nicole Hong, The Wall Street Journal]

The Challenges Hedge Funds Face in 2014

Expanding regulations and the rising cost of compliance loom as key strategic risks for hedge funds this coming year. [Dwight Cass, Institutional Investors]

Natural Gas Was 2013’s Best-Performing Commodity

Natural gas slumped Tuesday as traders cashed in profits from the best-performing commodity of the year ahead of a midweek holiday. [Climateer Investing]


January 1, 2014

The Year of the Horse begins January 31, a date the Vietnamese share.  The Iranians, like the ancient Romans, sensibly celebrate the New Year at the beginning of spring.  A bunch of cultures in South Asia pick mid-April. Rosh Hashanah (“head of the year”) rolls around in September. [David, Mutual Fund Observer]

Bill Gates told that his charity pledge is ‘worthless’

Bill Gates is the richest person in the world — but one retired New York hedge-fund mogul thought the software pioneer’s Giving Pledge was “practically worthless.” [Josh Kosman, New York Post]

Wall Street’s Latest Investment: Ex-Convicts

Either the Volcker Rule is making Wall Street’s menu of investment choices so unbearably limited, or traditional assets are so overpriced Wall Street won’t even touch them with other people’s money, but when it comes to allocating capital the smartest conmen in the room are coming up with some truly unorthodox products. [Tyler Durden, Zero Hegde]

Delaware vs. New York Governing Law

Among the many legalese-heavy paragraphs appearing under the “Miscellaneous” heading at the back of transaction agreements is a section that stipulates the laws of the state that will govern the purchase agreement as well as disputes relating to the deal. [Daniel Wolf, The Harvard Law School Forum]

Hottest Links: Not The Onion

Gaming addict has spent the last 6 years in an internet cafe

China’s growing problem with internet and video game addiction is probably best described by the case of Li Meng, a young man who has virtually been living in an Internet cafe for the last six years, leaving only to buy food and take the occasional shower. [Xtreme Facts]