Hottest links for Tuesday, April 2nd, 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 posted below. Today we’ve got a great exclusive piece by our very own Mark Melin, who spoke with Larry Tabb, who took the recent HFT story in a new direction by laying out how markets can either favor traders or investors, but not both. We’ve got also a great piece on a possible African e-currency that might make you want to forget about Bitcoin, as well as a great tribute to Daniel Kahneman.
Hottest Links: Stories
Value Investing
How I manage my portfolio and keep track of 50+ stocks
I never set out to create a series of posts outlining the basics of my investing philosophy, but it appears to have happened. This post joins the past two and fills in some gaps on how I implement my investment style. I also wanted to take some time to answer a question I get asked a lot, how do I actually manage a portfolio with more than 50 stocks. [Nate Tobik, Oddball Stocks]
Despec: a net-net at 4x earnings
Turkey is not a country I would happily invest in. For one thing, it is often hard to get information about companies. There are probably all kinds of governance issues as well. Negative investor sentiment often gets priced in though and this can present bargains that are simply too cheap to ignore. Despec Bilgisayar Pazarlama (IST:DESPC) might be one such opportunity. [NeverLoseMoney. ValueInvestingBlog]
How Has Kahneman’s Work Influenced Your Own?
It was Daniel Kahnemans 80th birthday last week and it was celebrated in style by Edge.org. Richard Thaler suggested that the question “How has Kahneman’s Work Influenced Your Own?” be asked to friends working in the fields of behavioural economics, psychology, cognitive psychology, law and medicine, a consistent stream of response has flown in. [Tannorpilatzke, Outlier Allocators]
Incentives & Financial Shenanigans
Aggressive accounting may take its form in different ways, such as booking revenues too soon, recognizing undue revenue (nevermind PoC accounting method!), misclassifying items so they don’t pass through the P&L, shifting current expenses to the next period, boosting operating income by one-offs and so on. [Tropical Value Investing]
Stock Price Guidelines
I’m often asked what’s a fair price to pay for a good business? This is a tough question, because people seem to mean different things when they say “fair price” and different things when they say “good business”. [Geoff Gannon, Gannon and Hoang on Investing]
Funds
Think Outside The Box
As we interviewed managers this month, Ed Studzinski, they and I got to talking about investors’ perspectives on the future. In one camp there are the “glass half-full” guys. Dale Harvey of Poplar Forest Partners Fund Class A (MUTF:PFPFX) allowed, for example, that there may come a time to panic about the stock market, but it’s not now. He looks at three indicators and finds them all pretty green… [Mutual Fund Observer]
Exclusive: Tabb Says For Stability, Markets Should Be More Expensive
In an interview with ValueWalk, Tabb, the founder of research firm TABB Group and a man who sits on sits on a regulatory advisory committee on high frequency trading (HFT), said the HFT debate is focused on the wrong topics as he notes that important “shock absorbers” have been eliminated from markets. [Mark Melin, ValueWalk]
Irrational Non-Exuberance
The endless chatter of bubbles and crashes continues unabated. Eventually, all bull markets come to an end, and this one must eventually as well. But as I sit down to write this, the S&P 500 (INDEXSP:.INX) Index yesterday hit yet another all-time high. U.S. markets continue to have good internals, strong breadth and broad participation. [Barry Ritholtz, The Big Picture]
Fannie Mae: 60 Plus Blasts Senators Favoring “Obamacare For Mortgages”
Three Democrat and four Republican Senators have been named in the campaign. Democrat senators targeted for supporting the Fannie Mae / Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) and Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC) reform include Joe Manchin, Mark Warner and Kay Hagan. [Aman Jain, ValueWalk]
Performance review March 2014 – Comment “P/E is not equal P/E”
Performance in March was +0,5%, slightly better than the -0,8% for the Benchmark (DAX PERFORMANCE-INDEX (INDEXDB:DAX) 30%, MDAX PERFORMANCE-INDEX (INDEXDB:MDAX) 20%, DBX EUROSTOXX 50 (DR) (SWX:XD5E) 30%, Eurostoxx small 20%). YTD the Portfolio is up +6,9% against +2,4%. Interestingly, the driver for the BM return ist the Eurostoxx small index with a +7,9% performance YTD whereas the MDAX, one of the best performing indices in the world for the last few years is actually slightly negative. [Value & Opportunity]
The Copper Archipelago: Truth, Lies and InterCloud Systems
InterCloud Systems Inc (NASDAQ:ICLD), a company familiar to Southern Investigative Reporting Foundation readers, put out a press release late last week sharply disagreeing with the claim that they had hired a controversial public relations firm to promote its shares. [Roddy Boyd, SIRF]
“Forget Bitcoin, African E-Money Is the Currency-Killer”
All the talk of bitcoin in recent years has overshadowed the real e-finance revolution: In Africa, India and now Eastern Europe, a service called M-Pesa has replaced banking for millions of people who don’t have or, in fact, even need a bank account. [Climateer Investing]
MIFA AG – all that inventory and the supposedly largest bicycle company of the world
MIFA Mitteldeutsche Fahrradwerke AG (FRA:FW1) (ETR:FW1) is a German based manufacturer of bicycles. I had actually included them into the peer group when I looked at Accell Group N.V. (AMS:ACCEL) (OTCMKTS:ACGPF), the Dutch bicycle company some time ago. The company went public in 2004. Its largest shareholders are the CEO (24%) and Carsten Maschmeyer, the billionaire former CEO of the controversial financial services company AWD. [Memyselfandi007, Value And Opportunity]
End of a low vol era?
Maybe, says SocGen’s hedge fund watching team. Apparently hedge funds are about to turn buyers of volatility for the first time in three years… [David Keohane, FT Alphaville]
Vanguard Snares Almost 90% of Q1 U.S. ETF Money: Bloomberg
It’s a remarkable number for the Vanguard Group, and it’s based in part on outflows from competitor State Street Corporation (NYSE:STT), SPDR S&P 500 ETF Trust (NYSEARCA:SPY) which are probably short-term in nature. [Brendan Conway, Focus on Funds]
Hottest Links: Not the Onion
Alleged Silk Road owner says he can’t be guilty of money laundering if bitcoin isn’t money
In a filing over the weekend, Ulbricht’s lawyers defended him against charges of hacking, narcotics trafficking, operating a criminal conspiracy, and money laundering. The first three charges, his lawyers argue, are “unconstitutionally broad” and can’t be applied to the normal operation of a website, even one whose business is illegal goods. And the last charge, they say, makes no sense if there isn’t actual money involved — a possibility implied by a recent IRS decision. [Adi Robertson]
