Hottest links for Monday, March 17th, the late edition. Get our free daily newsletter 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.  To kick off your work week, we’ve got a multitude of great value investing stories, an overvalued stock market, a value stock in Ukraine, behavioral finance material, and lots more value investing articles.

Hottest Links: Value Investing

Khrom Capital Returns 33% With 40% Cash Portfolio

Exclusive from ValueWalk: Khrom Capital’s letter to limited partners (great value investor just named to Forbes 30 under 30), see recent letter here. In the year 2013, our Partnership returned 25.8% net of fees and expenses. On average, we held 43% of our assets in cash throughout this period. [ValueWalk]

Khrom capital Hottest Links

The U.S. Stock Market is Expensive, and It Should Be

Citing a number of different normalized valuation measures, John Hussman recently estimated that that the U.S. equity market is more than 100% overvalued, that it needs to fall by more than 50% just to offer normal historical returns.  [Philosophical Economics]

Hottest Links

MG Book Club – The Intelligent Investor: General Portfolio Policy: The Defensive Investor (Chapter Four)

This is the fourth discussion of the ModernGraham Book Club’s reading of The Intelligent Investor by Benjamin Graham (affiliate link).  In last week’s discussion, we discussed the third chapter, which reviewed the history of the stock market until 1972 and we had a discussion regarding the general macroeconomic environment. [Benjamin Clark, ModernGraham]

Calling all risk takers, a Ukrainian investment at 2x earnings and 45% of book value

Investors who venture into risky markets can realize either fantastic returns, or encounter losses to be written off at tax time.  Right now feels like one of those times where a fortune could be made or lost by investing in the Ukraine or Russia. [Nate Tobik, Oddball Stocks]

If it is a strategic growth investment in China, the numbers don’t matter! Or do they?

To see if we share some of the same weaknesses, let’s try an experiment. Assume that you value a stock at $20 and it is trading at $30. What would you do? If you are a value-based investor, the answer is easy, right? Don’t buy the stock, or perhaps, sell it short! Now let’s say it is three months later. [Aswath Damodaran, Musings on Markets]

Rule Number One: Don’t Blow Up

I feel this because stock market returns have been explosive – specifically in high beta, high octane names – and investors’ expectations for future returns tend to extrapolative. [Joshua M Brown, The Reformed Broker]

Ben Graham’s Value Investing ? Fama/French’s Factor Investing

Ben Graham and his disciples like Warren Buffett, Howard Marks and Seth Klarman have developed a system called “value investing.” Eugene Fama and Ken French developed a completely different factor investing approach which identifies “value stocks.” [Tren Griffin, 25iq]

Mauboussin: Frequency vs. Magnitude

Our last article on the uncontrollable nature of luck was just downright depressing. To lift spirits & morale, this article showcases more comforting content on factors that are within an investor’s control. The following excerpts are extracted from a piece by Michael Mauboussin written in 2002 titled The Babe Ruth Effect – Frequency versus Magnitude. [PMJar]

Western Digital (WDC)

Do you ever get the feeling you’re late to the party? Western Digital Corp (NASDAQ:WDC) stock traded at just over $30 in 2011, and now trades at $86. In the last year alone it is up 100%. So you may wonder why I’m writing about it now. [Investing Sidekick]

Inside a Just Concluded Web Based Pump and Dump Scam (GALE; CYTR)

A few weeks ago I received a surprising email asking me to be a paid stock tout for IR firm “The Dream Team Group”. I was asked to write paid promotional articles on Galena Biopharma Inc (NASDAQ:GALE) and CytRx Corporation (NASDAQ:CYTR), without disclosing payment. Rather than refuse outright, I decided to investigate. [Climateer Investing]

The General Theory’s insights for investors

Keynes’s way to wealth” by John F. Wasik is a wonderful book with a lot of insights. The author summarizes the key learnings from Chapter 12 (on the markets) of Keynes’s masterpiece “The General Theory”:  [Chetan Parikh, Capital Ideas Online]

Cheap & Interesting!

Here, I thought I’d try place this into more of a day-to-day context. I’m not intending to discuss a reading plan here, or a daily reading link-fest. Yes, one might argue some sources are more useful than others, but I guarantee you’ll never know (in advance) which reading material will ultimately yield the greatest value. [Wexboy]

Hottest Links: Not The Onion

McCain: ‘Russia is a gas station masquerading as a country’

“Russia is a gas station masquerading as a country,” McCain said. “It’s kleptocracy, it’s corruption. It’s a nation that’s really only dependent upon oil and gas for their economy. And so economic sanctions are important. Get some military assistance to Ukrainians, at least so they can defend themselves. Resume the missile defense system in Poland and the Czech Republic. Look at Moldova and Georgia, both of whom are occupied by Russian troops as we speak, a path toward membership in NATO.” [Dylan Stableford, Yahoo News]