Hottest links for Friday 9th January, the late edition (see Thursday’s edition of hottest links). Get our free daily newsletter (the updated version) 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. Some great stories to kick off your weekend, including the first law of personal finance, Congress being comprised of mostly millionaires for the first time ever, and every Norwegian becoming a hypothetical millionaire.
Hottest Links: Stories
Value Investing Goes Back to the Future
In short, value investors are getting less worried about default risk and more interested in the future — specifically in future profitability. For stock-market bulls, that is encouraging. [Brendan Conway, Focus on Funds]
Value investors are contrarian by nature and what could be more contrarian in 2009 than financials. I had been looking into banks since the start of the financial crisis, trying to make head or tails of their annual reports. A pretty futile effort. [Student of Value]
Marty Whitman Disappointed That Nobel Prize Awarded To Eugene Fama
As far as they are concerned, the study of companies and the securities they issue are someone else’s business. I am disappointed that a Nobel Prize was awarded to Eugene Fama, who studies only markets and prices; and whom, I daresay, does not focus on Form 10-Ks or the footnotes to a corporation’s audited financial statements. [ValueWalk]
Numbers Time! Data update for 2014
In 1992, I had just finished a spreadsheet that contained the average PE ratios for companies in different sectors in the United States. [Aswath Damodaran, Musings on Markets]
Building Wordly Wisdom, What I’ve Been Doing, And What I Am Doing
Up to this point I have only been able to add companies to my watch list because everything I have found has been either crap or if it has been a company I want to invest in (some even with some substantial competitive advantages) have all been overvalued. [Jason Rivera, Value Investing Journey]
Why we follow financial advice
In How to Get Rich Slowly But Almost Surely: Adventures in Decision-Making, a book published in 1973, William Morris discusses the specific effects of financial advice given by advisers and brokers. [Shane Parrish, Farnam Street]
The first law of personal finance: Spend less than you earn
There are many ways to go broke, but persistently living beyond your means is the one that never fails. Anyone who’s seen Brewster’s Millions knows that even reckless investments occasionally pay off. But outgoings exceeding income is guaranteed to leave you with nothing. [Monevator]
All Norwegians become millionaires as oil fund balloons
Everyone in Norway became a theoretical krone millionaire on Wednesday in a milestone for the world's biggest sovereign wealth fund that has ballooned thanks to high oil and gas prices. [Reuters, CNBC]
ETF and Mutual Fund Taxation: Remind Me Again Why Mutual Funds Exist?
Many mutual funds will be sending you a very special gift in the coming weeks — their annual capital gains distributions. [Wesley R. Gray, Turnkey Analyst]
Dealpolitik: Why Elliott Could Be Far From a Deal for Riverbed Technology
In what appears to be an attempt to pressure Riverbed Technology, Inc. (NASDAQ:RVBD) to sell itself, on Wednesday Elliott Management offered to buy Riverbed for $19 per share. [Ronald Barusch, MoneyBeat]
Sell-Side Analysis Most Useful When Most Wrong
Equity analysts work harder when economies and financial markets are slumping. They also have more influence over stocks -- even though their earnings forecasts are less accurate. [Simon Kennedy, Bloomberg]
Greece ETF Grinds Higher
The Global X Funds (NYSEARCA:GREK) is proving defiant on both fronts. Remember that in 2013, three major index providers – Russell Investments, MSCI and S&P Dow Jones Indices – demoted Greece to emerging markets status. [Tom Lydon, ETF trends]
Bullish On Europe and Emerging Markets
"I don't want to create the impression Europe is Socialist paradise and everything is fine...there are a lot of structural problems," says Barry Ritholtz, CIO of Ritholtz Wealth Management. "But they are addressing them and slowly getting better as opposed to 'stock up on bottled water and food, Europe's going back to Middle Ages.'" [Barry Ritholtz, The Big Picture]
Meet China's "Street Of Fakes"
From "The Appla Store" to "Sffcccks Coffee", the southern Chinese city of Wuxi has seen a "street of fakes" sprout up that flaunts modified name of famous international stores. [Tyler Durden, Zero Hedge]
Greenberg: Diamond's Intent to Mislead
If nothing else, the government's case against Diamond Foods, Inc. (NASDAQ:DMND) should be a reminder that some companies and execs -- even today, with laws supposedly in place to deter malfeasance -- will pull out all stops to blatantly manipulate earnings in an effort to beat the street. [Herb Greenberg, Herb on TheStreet]
Vanity Fair And Fortune Reverse Roles