Hottest links for Friday, January 17th, the late edition (see Thursday’s edition here). 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. A great group of links today, including the quest for alpha being rooted in investors’ DNA, some wishful thinking for Greece’s bond plans, and what the Nest/Nestor debacle highlights about insider trading laws.
Hottest Links: Stories
Investment decision making: diversity over biology
Dan Loeb's Third Point returned 11% in its flagship Offshore Fund and 13.2% in its Ultra Fund for the first quarter. For April, the Offshore Fund was up 1.7%, while the Ultra Fund gained 2.3%. The S&P 500 was up 6.2% for the first quarter, while the MSCI World Index gained 5%. Q1 2021 hedge Read More
Investor love to chase relative performance. That is why phenomena like the ‘behavior gap‘ exist. Therefore prospective statements about manager alpha are a dangerous thing. [Tadas Viskanta, Abnormal Returns]
Peerless Systems, A Net-Net Stock in Search of a Business
Peerless Systems Corp. (NASDAQ:PRLS) sold their business in 2008 but still holds licenses to serve their current customers. Their Imaging business licenses are still profitable as seen in the ‘business section’ later in this report. [Shailesh Kumar, Value Stock Guide]
The 180 Rule and shorting stocks
This little essay is not to show how smart I am or to try to tell you how to trade stocks. It is written for my favorite audience: myself. I decided to share it with you in case you have better ideas that you would like to share with me. [Dasan]
Defensive shares – An unusual way to value them
The problem is it’s usually not obvious whether a company’s shares are expensive or cheap, and therefore it’s not obvious whether any given company is a buy or a sell. [John Kingham, UK Value Investor]
A Mental Model To Explain Many Business Models
Numerical fluency can help investors beyond just teaching us new ways to think. Patterns already deciphered by mathematicians several centuries ago are common place in business. [The Odd Lot]
Are you looking for Alpha? Or Absolute Return?
Industry practice and academic body of knowledge have obsessed investors towards the quest for Alpha. It is inscribed and prescribed in the investment policies. It is the metric dictating manager hiring, compensation and dismissal. [Rene Levesque, AllAboutAlpha.com]
Fama Doesn’t Deserve a Nobel Prize?
Marty makes goes on to convey the message that he is able to identify inefficiency in the market because he does so much “homework” and analysis. In other words, his skill is much higher than that of other market participants. [Wesley R. Gray, Turnkey Analyst]
Chart of the day: Long robots, short humans?
As the use of industrial robots rises, human manufacturing jobs will continue to decline, strategists at Bank of America Merrill Lynch wrote in a report this week. [CNBC]
Reversal in US farmland prices gathers pace
The reversal in US farmland prices gathered pace, with the market showing its worst performance for more than three years, undermined by weakness in agricultural commodities. [Climateer Investing]
Greece’s Bond Plans May Be Wishful Thinking
Various high-ranking Greek officials have expressed their wish to bring the country back to the debt markets. Most recently, finance minister Yannis Stournaras spoke about this at a briefing with foreign journalists who visited Athens last week as Greece took over the European Union’s helm. [Emese Bartha, MoneyBeat]
Wall Street’s Brightest Minds Reveal Their Best Investment Ideas For The Next Decade
Some are also skeptical of the potential for returns in the stock market in the years ahead, given common valuation multiples that are currently above historical averages. We asked a few of our favorite traders, strategists, and economists for their best investment ideas for the next 10 years. [Matthew Boesler, Business Insider]
Insider Trading Law Can’t Handle Nest and Nestor
The Nestor, Inc. (OTCMKTS:NEST)/Nest insider trading thing that we talked about earlier is pretty dumb but there’s actually an important question lurking in it. Financial fraud law is built around a thing called “materiality.” [Matt Levine, Bloomberg]
Alabama suffered a couple of late-season losses, including a stunning loss to Auburn. On the last play of the game. On a missed Alabama field goal that Auburn returned 109 yards for a touchdown. These things just don’t happen, especially to Alabama teams. [John Heldman, BeyondProxy]
The Most Interesting Aspect of Bitcoin as Money
Bitcoin is the purest form of a decentralized medium of exchange that presently exists. But what makes Bitcoin so interesting is why anyone cares about it at all. [Cullen Roche, Pragmatic Capitalism]
Introducing our smart contact lens project
We’re now testing a smart contact lens that’s built to measure glucose levels in tears using a tiny wireless chip and miniaturized glucose sensor that are embedded between two layers of soft contact lens material. [Brian Otis and Babak Parviz, Google]
Hottest Links: Not the Onion
Lawyer argues Kevin Spratt may have been screaming in “joy” while being tasered by police A lawyer for two police officers says the court cannot rule out the possibility that a man was screaming with joy when he was being repeatedly tasered at the Perth Watch House more than five years ago. [ABC News]