Hottest links for Friday, 3rd 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. Finish off the work week in style with this Friday’s links, including a piece on why “this time is different” are the four most dangerous words in the financial industry, why China can’t actually take over the world, and a chance for you to show your stuff by taking a shot at the BFBV end term exam.

Hottest links: Stories

Value Investing

This Time is Different

When we look at situations we’re always looking for what’s unique. We should, however, give more thought to similarities. “This time is different” could be the 4 most costly words ever spoken. It’s not the words that are costly so much as the conclusions they encourage us to draw. [Shane Parrish, Farnam Street]

Do Financial Services Companies Have Moats? Part II, American Express

In 1958, a venerable old company named American Express Company (NYSE:AXP) decided to enter the charge card business.  It would have to compete with the incumbent, Diners Club. [Punchcard Investing]


Wall Street’s bearishness indicates 18% gain for U.S. stocks in 2014

With Wall Street’s bearishness as extreme as it was at the market lows of March 2009, the Sell Side measure currently indicates an 18% gain for the S&P 500 INDEX (INDEXCBOE:SPX) over the next 12 months, including dividends. [Jonathan Burton, The Tell]

Hottest links

The ‘Strangest’ Fund of 2013 — If By Strange We Mean ‘High Returns’

Mutual-fund research guru Russel Kinnel writes that Fairholme Focused Income (MUTF:FOCIX) would be Morningstar’s strangest fund of 2013, if the firm had such a rating. [Brendan Conway, Focus on Funds] Hottest links

CAPE Returns for 2013

Did CAPE work in 2013?  Below are end of 2012 updates, new CAPE values mailed to Idea Farm today…Also below is a chart of average and median CAPE values across 55 markets over time… [Mebane Faber]

CAPES Hottest links

Chart of the Day

The most recent close for the S&P 500 (INDEXSP:.INX) is 1,848.36 — it has retraced 131.9% of its financial crisis bear market decline. [Chart of the Day]

Chart of the Day Hottest links

NYC’s New Mayor to Pursue Pension Investments in Affordable Housing 

Bill de Blasio, the newly inaugurated mayor of New York City, is moving forward with his plan to allocate $1 billion of pension assets to affordable housing—a massive increase to the funds’ prior investments to this space. [Sage Um, aiCIO]

Why China can’t take over the world

China is preparing to surpass the United States as the world’s largest economy, in purchasing power parity terms. Already its economy is 80% the size of ours, and if current growth rate differentials persist, it will take China only about four more years to surpass us. [Noah Smith, Quartz]

Avangardco’s Rock-Bottom Valuation

Avangardco Investments Public Ltd., Co. (OTCMKTS:AGVDY)’s business operations are located in Ukraine. Ukraine has historically been one of the world’s most agriculturally productive nations, earning the nation the nickname “The breadbasket of Europe.” [OTC Adventures]

Bitcoin Is an Expensive Way to Pay for Stuff

A claim that is sometimes made about Bitcoin is that it is a way to send money without incurring transaction fees. [Matt Levine, Bloomberg]

As Equities Surge, Corporate Pensions Approach Fully Funded Status

Defined benefit plans are finally climbing out of the hole. Now their sponsors face a new set of issues, like weather to retain a plan or not. [Frances Denmark, Institutional Investor]


The Biggest Redistribution Of Wealth

While the growth of inequality in America has been heavily discussed here, it was Stan Druckenmiller’s outbursts (and warnings that “from beginning to end – once markets adjust from these subsidized prices – that the wealth effect of QE will have been negative not positive”) that brought it more broadly into the average American’s mind. [Tyler Durden, Zero Hedge]

Hottest links

Labor Department Panel Calls for Ending Lockup for Jobs Data

A Labor Department panel has called for abandoning media lockups for a key weekly measure of U.S. employment. The recommendation is the first formal call by a government entity to end media lockups and could hasten a move away from the government’s decades-old practice of releasing sensitive economic data through the media. [Brody Mullins, The Wall Street Journal]

Take a Shot at BFBV End Term Exam

Here is the BFBV end term exam administered in early December 2013. Students had been provided with extensive information on two companies beforehand which can be downloaded.. [Fundoo Professor]

Do not trust Deloitte – whistleblower edition…

I recently wrote a long letter to Deloitte about a company audited by Deloitte in which I thought there was a possibility that the accounts were fake. [John Hempton, Bronte Capital]

Don’t Make The Same Mistakes As One Wyoming Car Salesman

A Wyoming car dealership that fired an employee for allegedly drawing a penis on his business card and giving it to a female customer is asking a judge to reverse the Unemployment Insurance Commission’s decision to award him unemployment benefits. [Bess Levin, DealBreaker]

Greenberg: New Year Report — Herbalife and More

Either Herbalife Ltd. (NYSE:HLF) will do the mother of all buybacks, go private, do some kind of a recapitalization or … nothing. [Herb Greenberg, Herb on TheStreet]

Hottest links: Not the Onion

NC Politician Writes Resignation Letter In Klingon

On Thursday, David Waddell used the Klingon language to write his letter of resignation from the Indian Trail Town Council in North Carolina. [WSPA]