I found some interesting comments by Whitney Tilson regarding the recent insider trading charges against several firms. Below are his comments:
Interesting to see that the insider trading case is related to soft dollars:
A sweeping insider-trading investigation is raising questions about how hedge funds and other big investors dole out a common, and controversial, currency that flows freely across Wall Street. The currency is known as soft dollars.
By Rob Bennett
Columbia University Professor Rahiv Sethi once said something about me that I believe perfectly sums up the work I have done in the investing field over the past eight years. He said: “Rob Bennett makes the claim that market timing based on aggregate P/E ratios can be a far more effective strategy than passive investing over long horizons (ten years or more). I am not in a position to evaluate this claim empirically but it is consistent with Shiller’s analysis and I can see how it could be true.”
By Seeking Delta of http://seekingdelta.wordpress.com
Last week, in his weekly market comment, John Hussman posted an interesting chart (see below) comparing the corporate profit to GDP ratio and the subsequent growth rate in corporate profits. I have previously posted on profit margins (see here and here) and will now further explore what profits margins at current levels imply about the next five years for the S&P 500 index.
There were dozens of good books that were published this year related to investing and business. I thought it would be a good idea to post some of them as amazon.com is having a huge sale throughout the Thanksgiving day weekend, and they are good presents for a loved one, neighbor, friend, co-worker, or yourself!
Before books some electronic reading devices that readers might be interested in include the Apple iPad (Wifi),, Kindle 3G Wireless Reading Device, Free 3G + Wi-Fi, 6″ Display, Graphite, 3G Works Globally – Latest Generation and Kindle Wireless Reading Device, Wi-Fi, 6″ Display, Graphite – Latest Generation (all of which have come down significantly in price this year). I personally like print books and plan to never give them so I do not use any e-readers, however I have many family members, friends and colleagues who love the e-readers.
On this week’s Consuelo Mack WealthTrack, David Rosenberg a Financial Thought Leader who called the credit and housing bubbles way ahead of the pack. Gluskin Sheff’s prescient Chief Economist, David Rosenberg shares his economic and market outlook, plus advice on how to invest in it.
Warren Buffett was on Cnbc recently talking to his favorite anchor Becky Quick. I was able to locate two videos of the interview on the internet.
I recently posted an article about Whitney Tilson’s trip to israel. Here is another interesting story that Tilson describes below:
(Happy Thanksgiving)
I forgot to tell this story from my Israel trip: on Monday morning (11/15) Stanley Fischer, the Governor of the Bank of Israel (the equivalent of Ben Bernanke), spoke to us. He was INCREDIBLY impressive – it was clear to everyone in the room that he was a major reason why Israel’s banks were boring and underlevered, such that Israel largely sailed through the global crisis that destroyed so many other emerging, high-growth economies like Ireland and Iceland. His accomplishments have not gone unnoticed – here’s a summary from the Wikipedia page about him (http://en.wikipedia.org/wiki/Stanley_Fischer):
I just added a resource page devoted to value investor Whitney Tilson. The webpage will be a permanent page on Value Walk. The page contains Tilson’s bio, articles, hours of video interviews etc. I plan to post additional for the next few days, but this should give you some additional information on Tilson. I posted the entire page below and to view the permanent static page go to the top toolbar-Value Investors->The New Value Investors->Whitney Tilson. Or by clicking on the following link. Enjoy!
Track Record
Whitney Tilson has achieved an incredible track record since he started his fund with only one million dollars in February 1999. Tilson currently manages well over $100 million. Tilson started his fund out of his apartment according to a lengthy interview I conducted with him in March 2010 (interview can be found here). Tilson’s T2 hedge fund as of October 2010 had gross returns of 268% versus 18.2% for the S&P 500.
By Seeking Delta of http://seekingdelta.wordpress.com
Both the NAAIM (active money managers) and AAII (individual investors) sentiment surveys released this week show a decline in bullish sentiment. The biggest decrease in bullish sentiment came in the AAII survey where the bullish reading plummeted to 40% from 58% last week. The NAAIM survey showed a more modest pullback.
By Jordan of http://investmentunderground.com/
We ran a screen to filter picks that Warren Buffett would like: sustainable business advantages producing significant free cash flows, and healthy returns on equity in excess of 10%.
We also screened for market caps larger than $10 billion in order to “move the needle,” meaning, Warren could acquire enough shares to make the investment worthwhile given Berkshire’s size.
by Rob Bennett
It makes no sense to stay at the same stock allocation regardless of valuation levels (Buy-and-Hold) if valuations affect long-term returns, as was shown in research done by Yale Economics Professor Robert Shiller in 1981. Yet most of us have been reluctant to make the move to the Valuation-Informed Indexing Model fof understanding how stock investing works, the model rooted in Shiller’s research findings.
By Seeking Delta of http://seekingdelta.wordpress.com
A very nice interactive tool today from Reuters that shows asset returns based on different QE2 related time periods. Link.
Notice how most assets rallied from the Jackson Hole speech until the official QE2 announcement and the USD declined. Since the actual announcement risk assets have sold off and the USD has rallied. Interesting that the anticipation QE resulted in assets moving as the Fed intended, higher equity prices and lower bond yields, but since implementation prices are moving in the opposite direction. The question is, will this continue?
On this week’s Consuelo Mack WealthTrack, a rare television interview with the prescient hedge fund manager who correctly called the precarious condition of financial firms from Allied Capital (to read more about Einhorn’s short of Allied Capital check out David Einhorn’s book (recently updated) Fooling Some of the People All of the Time: A Long Short (and Now Complete) Story) to Lehman Brothers and the financial system as a whole. Greenlight Capital’s David Einhorn discusses the current state of the markets and his investments with host Consuelo Mack. Since inception in 1996, Greenlight has delivered more than a 21% annualized (net of fees) return for its partners.
Great presentation below by economist Niall Ferguson: Niall Ferguson is a contributing editor for the Financial Times and a regular … Read more
Whitney Tilson took a trip to Israel recently with Guy Spier. I have spent many years living in Israel and am quite familiar with the country. I wrote an article about Israel as a country that from a macro picture has a very favorable outlook for investors (I did not get into valuations). Click here to see an article on the Israel that I wrote several months ago. There is also a great book called Start-up Nation: The Story of Israel’s Economic Miracle; that explains how Israel became the Singapore of the middle east.
Below is Whitney Tilson’s interesting commentary from his trip: