Hottest links for Wednesday September 18th, 2013 (see Tuesday‘s edition of hottest links here). Top stories for today include; Steve Cohen’s brother in law is launching a hedge fund, how much are you investing?; Why do the clever and lazy make for the greatest leaders? Warren Buffett might be able to tell you the answer to that one; An in depth valuation analysis of Motorola Solutions; Why now might be a good time to buy bonds amid the carnage; A look at the valuation of a small, illiquid Canadian stock, Hammond Manufacturing Company Limited (TSE:HMM.A); Germany once tried to remove gold from seawater and this is what happened…..; Hedge funds this year are underperforming but event driven funds are doing not as bad; Yes retail is tough but here is why American Eagle Outfitters (NYSE:AEO) could be a turn around value play; Interesting research on marriage and working at a hedge fund; Shorting car-makers is not an easy task, just ask Jim Chanos (who was also on Bloomberg yesterday to discuss China); Someone was tragically murdered, but the police got a big tip… the murderer accidentally dialed 911 and discussed the murder while police were listening in!
Programming note, this is the last one of the week so come back next week for more.
Hottest Links: Stories
Why Clever and Lazy People Make Great Leaders
“You’re looking for three things, generally, in a person,” says Warren Buffett. “Intelligence, energy, and integrity. And if they don’t have the last one, don’t even bother with the first two.” [Shane Parrish, Farnan Street]
Value Stocks
My Take on Motorola Solutions
Motorola Solutions Inc (NYSE:MSI) came into existence on January 4, 2011 when Motorola, Inc. separated into two independent, publicly-traded companies: Motorola Solutions, Inc. and Motorola Mobility Holdings Inc (NYSE:MMI). Motorola Solutions provided mission-critical communication products and services for enterprise and government customers. Motorola Mobility made mobile cellular devices and cable video management equipment and was acquired by Google Inc (NASDAQ:GOOG) soon after the split. [Douglas Ott, BeyondProxy]
Why It Might Not Be Crazy to Buy Bonds Right Now
The rapid selloff in the US Treasury market has come as a surprise to many, including such famous bond investors as Bill Gross, CFA, and Jeffrey Gundlach. As the chart below shows, 10-year yields on US Treasuries (10yr UST) are about 130 bps higher since the beginning of May. [David Schawel, CFA Institute]
Hammond Manufacturing, Boring, Cheap And Very Attractive
Some companies find themselves in a position where being smaller and at best average leads to investor neglect. Couple investor neglect with a large inside holder and eventually shares become illiquid. Small, illiquid, and boring can lead to an undervaluation, which is the case with Hammond Manufacturing Company Limited (TSE:HMM.A). [Nate Tobik, Oddball Stocks]
Aeropostale Might Offer Turnaround Value
Over the past week, I’ve been leisurely reading about teen retailers in general (American Eagle Outfitters (NYSE:AEO), Aeropostale Inc (NYSE:ARO), Abercrombie & Fitch Co. (NYSE:ANF), and others) as the market has done a number on their stock prices over the past few months. I’ve focused in on Aeropostale, simply because it has been hit the hardest and I wanted to try and see if there might be some value there. [John Huber, Base Hit Investing]. Related,
A Probabilistic System For Identifying Suicide Attempters
The system includes a computer interview of patients complaining of suicidal thoughts and Bayesian processing (using subjective probability estimation) of the results of that interview. The results suggest that the system may significantly improve the health field’s ability to identify suicide attempters. [Wesley R. Gray, Turnkey Analyst]
Germany’s Post-World War I Scheme to Extract Gold from Water
In order to pay Germany’s staggering World War I reparations, one of the country’s greatest scientific minds created a plan to concentrate and remove gold from seawater. Fritz Haber, a Nobel Prize winner, went from creating chemical weapons to panning for gold in the ocean. [Climateer Investing]
Hedge Funds
Event-driven Hedge Funds Lead All Hedge Fund Strategies Through August
Hedge funds – measured by the Credit Suisse Hedge Fund index – returned 4.03% through August, according to data released by the firm Monday. By strategy, event-driven funds have posted the best returns so far in 2013 at 8.6%, led by distressed funds at 8.87% and multistrategy event-driven funds returning 8.5%. Long/short equity funds are up nearly 8% on the year vs. 16.9% for the Russell 3000 and 3.7% for the SPDR MSCI ACWI IMI ETF (FRA:SPYI) ex U.S. index through August. [Timothy Pollard, Pension&Investment]
Steve Cohen’s Brother-In-Law’s New Hedge Fund
Steve Cohen’s brother-in-law’s new hedge fund will be up-and-running by the time you get your last sac redemption checks. [Jon Shazar, DealBreaker]
You’ll Never Get Married Working At a Hedge Fund
Hedge funders on the search for alpha might be ………. [Rob Copeland, Hedge Fund Intelligence]
Hedge Funds Seem Incapable of Timing The European Car Market
New car registrations in Europe dropped to a never-seen-before low point in August. This comes after registrations fell to a 20-year low in May 2013. The auto industry of Europe has been suffering through a dry spell for several quarters now. [Tabi Hussain, ValueWalk] Also see more from Chanos here.
361 Capital Weekly Research Briefing
Lawrence Summers has taken himself out of the running to be the next chair of the Federal Reserve, withdrawing his name after opposition from key Democratic senators indicated they would oppose his nomination. Mr. Summers, a former Treasury Secretary and senior economic adviser to Barack Obama in his first term, galvanized opposition among left-of-center Democrats who painted him as symbol of the wrongs of financial deregulation. [Blaine Rollins, The Reformed Broker]
Be Foxy
Aesop was a Greek story teller who is famous for his fables. A fable is a short story, typically with animals as characters and it conveys a moral. In his stories foxes are portrayed as cunning creatures. I have read a lot of his fables and for a long time I had an aversion for fox. Later in my life I came across the book Good to Great by Jim Collins. In this book he writes that great companies are built by hedgehogs. On the other hand mediocre companies are run by foxes. [Jana Vembunarayanan, Seeking Wisdom]
Hottest Links: Not The Onion
Man pocket dials 911, mentions murder
On May 5, Simon pocket dialed 911, and while the call was being recorded, told someone he was going to follow the victim home and kill him, according to investigators. Minutes later, 33-year-old Nicholas Walker was shot and killed while driving his car on Interstate 95. [Ben Candea, Local10]
