Hottest links for Monday, 9th December, the late edition (see Weekend’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 included below. We’ve got a veritable cornucopia of links today, including some words of wisdom from Jason Zweig, a series of articles on Bitcoin mayhem – with some declaring flatly that it’s not a currency, and some predicting it will go up 100x in value, there’s bound to be some interesting commentary – and a possible pullback in the emerging market gold rush. Also, don’t miss a fascinating, thoughtful piece on gender roles on Wall Street and the rise of stay-at-home husbands.
Hottest Links: Stories
Value Investing
A Dozen Things I’ve Learned from Jason Zweig
The future value of every investment is a function of its present price. The higher the price you pay, the lower your return will be. [Tren Griffin, 25iq]
Coca-Cola’s Indian experience
That’s something I keep in mind as I think of The Coca-Cola Company (NYSE:KO)’s experiences in India. Coca-Cola launched operations in India in 1950 shortly after independence. Our business grew steadily. [Muhtar Kent, McKinsey & Company]
The Five Skills of Disruptive Innovators
In The Innovator’s DNA: Mastering the Five Skills of Disruptive Innovators, authors Jeffrey Dyer, Hal Gregersen, and Clayton Christensen uncover the origins of “innovative-and often disruptive-business ideas.” [Shane Parrish, Farnam Street]
Eric Topol interviews Atul Gawande
Atul Gawande, MD, MPH, wears many hats, including that of a surgeon, researcher, journalist, and author. In this segment of Medscape One-on-One, Dr. Gawande talks with Eric J. Topol, MD, about what inspires him, his plans for the future, and why he’s secretly a frustrated rock singer. [Joe Koster, Value Investing World]
Value investing for retirement portfolios
Does value investing make sense for retiree portfolios? Warren Buffett, at 83 years old and with a net worth of about $60 billion, doesn’t seem to worry about time horizon when buying stocks — the true value of which might not be realized for many, many years. [Robert Powell, MarketWatch]
Infusystems and the Round 1 Recompete Analysis
I’ve noticed a few more SeekingAlpha articles discussing the investment inInfuSystem Holdings Inc (NYSEMKT:INFU), including discussions about the result of the CMS Round 1 Recompete. If you would like to read more about the Recompete process, you can visit the CMS website. [Ray Bonneau]
Funds
Damn you, Mr. Sharpe
What interests me the most in such reports is the last column, i.e. the Sharpe ratio, which basically measures the volatility-adjusted returns. As a rule of thumb, anyone consistently below one should not be paid much. [barnejek’s blog]
Front Running Pathetically Stupid Hedge Fund Managers
We are coming down the home stretch now and bonuses are at stake, pal. Your local hedge fund managers would prefer to make $100 mill for the year, instead of a paltry $75 million. Here are the stocks that fit this criteria, courtesy of The PPT. [The Fly, iBankCoin]
Bargains Beckon Funds to Europe With S&P 500 Past Prime
Oliver Pursche, a Suffern, New York-based manager beating 97 percent of rivals in 2013, bought Total SA (ADR) (NYSE:TOT) (EPA:FP) and Royal Dutch Shell plc (ADR) (NYSE:RDS.A) (NYSE:RDS.B) for their relatively high dividends and low valuations relative to peers. Sanofi SA (ADR) (NYSE:SNY) (EPA:SAN) in Paris is among about 25 new stocks added by Timothy Ghriskey’s Solaris Asset Management LLC in Bedford Hills, New York. [Whitney Kisling and Callie Bost, Bloomberg]
Active managers rally to strike against drones
Passive managers have dominated sales for five years [John Authers, FT]
Hidden Volume From Small Trades to Hit Screens Today
The biggest visual impact will be on high-priced, highly liquid stocks, such as Apple Inc. (NASDAQ:AAPL), Google Inc. ( NASDAQ:GOOG), and Priceline.com Inc (NASDAQ:PCLN) Terminals could show an increase in volume for those stocks of between 15% and 40%, analysts say. [Bradley Hope, Money Beat]
Why The Ideological Hatred of Bitcoin?
There seems to be an inherent hatred of Bitcoin by certain groups of people. Some people feel the need to boldly declare that Bitcoin isn’t a form of money. [Cullen Roche, Pragmatic Capitalism]
Japan, China, India: Two Big Exceptions and a Rule
When the Washingtonians adopted a solution (such as it was – a suspension of the debt ceiling until February 7, 2014), the Nikkei picked up for the week in the middle of the month. But there remained concerns about the appreciation of the Yen and unsatisfactory numbers came into the public domain for the second quarter performance. So the benchmark ended the month again heading down. [Christopher Faille, AllAboutAlpha.com]
| October 2013 | YTD 2013 | 2012 | |
| Topix 1000 | 0.0% | 21.4% | 6.3% |
| Nikkei 225 | -0.9% | 20.5% | 10.8% |
| TSE Mothers | -4.3% | 77.4% | -8% |
| AsiaHedge Japan Long/Short Equity ($) | 0.6% | 27.7% | 7.5% |
Fund sees Brazilian fraud as next big thing in emerging markets
Global investors may be growing wary of emerging markets as the US prepares to scale back its monetary largesse next year. [Joe Leahy, FT]
A decade of markets, mayhem, and investing
Individual stocks would rise and fall with abandon on any given day. But the broad market would generally trade in a narrow band: It was rare for the Dow Jones Industrial Average (INDEXDJX:.DJI) or the S&P 500 INDEX (INDEXCBOE:SPX) stock indexes to move 3% in any direction in a session. [Lauren Silva Laughlin, CNNMoney via The Reformed Broker]
The Efficient Market Hypothesis is Dead
Barnes & Noble, Inc. (NYSE:BKS) Friday price/”news” action officially killed the Efficient Market Hypothesis for me. [Kid Dynamite’s World]
Jim Chanos, bad news bear, urges market prudence
Prominent short-seller Jim Chanos is probably one of the last true “bad news bears” you will find on Wall Street these days, save for Jim Grant and Nouriel Roubini. [Jennifer Ablan, Reuters]
This Year’s Trash, Next Year’s Treasure?
My friend Larry McDonald is out with a year-end piece at Forbes that looks at a very interesting phenomenon we often see each December – once the tax-selling pressure abates from losing stocks in one calendar year, they can often go on to become the following year’s grand slams… [Joshua M Brown, The Reformed Broker]
Misc
Open Thread: Make the Bear Case
The past few weeks, I have been arguing against the notion that we are in a bubble. Let’s look at the other side of the argument: What is the (rational) bear case? We know stocks are no longer cheap, and this bull — already up 160%+ — is on the high end of the range. [Barry Ritholtz, The Big Picture]
Bitcoin prices could swell 1,000 times
Bitcoin was last priced at $907.77, according to online exchange Mt. Gox. They bounced off a low of around $700. The crypto currency can be exchanged for traditional currencies like dollars or mined by harnessing several computers’ processing power to perform a complicated algorithm. [Tom Bemis, The Tell]
Everyone Betting On Bitcoin Will Lose All Of Their Money
Last week, Bank of America Merrill Lynch initiated coverage on Bitcoin and estimated a fair value of $1,300 on the digital currency. Despite this extraordinary endorsement, many aren’t yet willing to acknowledge the legitimacy of Bitcoin. [Sam Ro, Business Insider]
Cerberus, Gun Maker’s Owner, to Offer a Way Out to Its Investors
Freedom’s parent, the investment firm Cerberus Capital Management, plans to unveil the proposal on Monday, a person briefed on the matter said on Sunday. [Michael J. De La Merced, DealBook]
Microsoft CEO Search: Stalemate
The Microsoft Corporation (NASDAQ:MSFT) CEO succession process appears to be stalled. This is a company with immense human, technical, and financial resources; the tech industry is filled with intelligent, energetic, dedicated candidates. What’s wrong with the matchmaking process? [Jean-Louis Gassee, Monday Note]
Interoil: both longs and shorts look like fools
InterOil Corporation (NYSE:IOC) is perhaps the most-disputed stock I have ever witnessed. The dispute is about the value of a huge claimed gas find in Papua New Guinea. [John Hempton, Bronte Capital]
Food Technology Services to be Acquired
I first presented Food Technology Service Inc (NASDAQ:VIFL) back in October under the thesis that is was highly profitable, had a nice geographical moat, and made for an attractive acquisition target. Additionally, some recent activity by a private equity buyer in the shares led me to believe a corporate transaction could occur in the near future. [Mackie, Moatology]
Comcast Hires JPMorgan as Adviser
Comcast Corporation (NASDAQ:CMCSA) has hired JPMorgan Chase & Co. (NYSE:JPM) to advise it on a possible bid for Time Warner Cable Inc (NYSE:TWC), according to people briefed on the matter. [David Gelles, DealBook]
My life working for the real ‘Wolf of Wall Street’
When most people his age were still figuring out what they wanted to do for a living, Josh Shapiro had a clear-cut plan — make as much money as possible. So he did. [Josh Shapiro, New York Post]
Wall Street Mothers, Stay-Home Fathers
But when the elevator lets Marielle Jan de Beur off at Wells Fargo, she enters another zone, where the gender dynamic that has long underpinned the financial industry is quietly being challenged. Ms. Jan de Beur and some of her colleagues rely on support that growing numbers of women on Wall Street say is enabling them to compete with new intensity: a stay-at-home husband. [Jodi Kantor And Jessica Silver-Greenberg, The New York Times]
Gold: Gilded or Gelded?
Near the height of gold’s 12-year bull market two years ago, Warren Buffett observed something remarkable: The value of all the world’s gold could be used to buy all 400 million acres of U.S. cropland. [Brendan Conway, Barron’s]
Hottest Links: Not The Onion
TSA agent confiscates sock monkey’s toy pistol
“Rooster Monkburn” the cowboy sock monkey is without his pistol, thanks to a diligent TSA agent in St. Louis. [Susan Wyatt, King5]
