Hottest links for Thursday, February 27th, 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 included below. We’ve got the first “Tesla to $1,000” call alongside with some snarky commentary that he should have announced the gigafactory while walking out of his factory with a cane and a fake limp (a la Willy Wonka), as well as Buffett’s favorite indicator (which happens to be unusable as a buy/sell tool).
Hottest Links: Stories
A Psychological Perspective On Rationality – Daniel Kahneman
Partners Group provides capital for Taxfix, Litera
Partners Group Private Equity gained in May. The net asset value for Class I rose 3.5%, while the net asset value for Class A grew 3.4%. The total fund size increased to $5.6 billion. For the first five months of the year, Class A is down 4.4%, while Class I is down 4.2%. Q1 2020 Read More
This is really great stuff. Kahneman is one of, if not the greatest psychologists of our time. His work with Amos Tversky on studying how humans actually make decisions, won him the nobel prize in 2002. [Contrarian Ville]
Buffett’s Favorite Indicator Is Worthless as a Buy/Sell Signal
Let’s use arguably the greatest investor of all time, Warren Buffett, and what he describes as, “probably the best single measure of where valuations stand at any given moment.” [Barry Ritholtz, The Big Picture]
The current rash of M&A deals may enhance earnings
Merger and acquisition (M&A) deals have a nasty tendency to work out poorly for the acquiring shareholder – indeed, according to this Financial Times article, academic studies have repeatedly shown around 70% of M&A deals destroy value for the company doing the merging or acquiring. [Kevin Murphy, TheValuePerspective]
Uh Oh: The First ‘Tesla To $1000’ Call (TSLA)
It’s acceptable to refer to Internet advertising companies like Facebook Inc (NASDAQ:FB) and Google Inc (NASDAQ:GOOG) as tech companies. In reality, these ad companies do not qualify as real tech. Want to see real tech, look no further than Elon Musk’s efforts at Tesla Motors Inc (NASDAQ:TSLA), SpaceX and SolarCity. [Climateet Investing]
The Fraud Behind a $14 Million Whistleblower Award
A record $14 million whistleblower award paid by the Securities and Exchange Commission last year was for a tip about an alleged Chicago-based scheme to defraud foreign investors seeking U.S. residency, according to people familiar with the payment. [Jean Eaglesham, The Wall Street Journal]
The 25 Highest-Earning Hedge Fund Managers And Traders
In 2013, hedge fund managers and traders bet on an economic revival in Japan, laid siege to corporate boards, invested in hospitals that could benefit from Obamacare and helped make General Motors Company (NYSE:GM) a hot stock. [Nathan Vardi, Forbes]
Fannie Mae, Freddie Mac: Fairholme Victory Vs Treasury
This is a complete and total win for Berkowitz and FAIRX and Fannie Mae / Federal National Mortgage Association (OTCBB:FNMA) and Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC) shareholders. [ValuePlays, ValueWalk]
The Next Big Thing
Staying with a powerful trend is psychologically more difficult than staying on the sidelines or shorting. Stocks like Tesla Motors Inc (NASDAQ:TSLA) and Priceline.com Inc (NASDAQ:PCLN) are recent examples of that notion. [Ivaylo Ivanhoff, Ivanhoff Capital]
Hedge Funds Saba, Pine River are New Names in Pimco, BlackRock CEFs
The hedge fund bought $78.5 million of shares in the BlackRock Corporate High Yield Fund VI, (NYSE:HYT) to become its second-biggest owner. The firm now owns $41.5 million of shares in Blackrock Credit Allocation Income Trust (NYSE:BTZ), becoming its fourth biggest owner, the data show. [Brendan Conway, Focus on Funds]
Everything is Awesome!
You know what the twentysomethings in Manhattan are into these days? Drunk Brunch. True story. They go out on Saturday night to pre-game for the next morning, wake up half-drunk then start banging vodka drinks at 10 am while a DJ blasts oonce-oonce music and brioche french toast comes flying out of the restaurant’s kitchen. [Joshua M Brown, The Reformed Broker]
Buffett versus Asness on Bonds: Terrible Investment or Good Diversifier?
Warren Buffett went on CNBC back in May of 2013, and had some choice words for those who would consider investing in bonds. [Wesley R. Gray, Turnkey Analyst]
Dodd-Frank Enhanced Prudential Standards for U.S. Bank Holding Companies and Foreign Banks
Pursuant to Section 165 of the Dodd-Frank Act, the Federal Reserve has issued a final rule to establish enhanced prudential standards for large U.S. bank holding companies (BHCs) and foreign banking organizations (FBOs). [Kobi Kastiel, The Harvard Law School Forum]