Hottest links for Wednesday, February 26th, 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. Some great stories today, including the ongoing saga of Jefferies MBS trader Jesse Litvak, a piece on big tech companies acting like VC firms, and a Not The Onion piece that we very much hope is fake.
Hottest Links: Stories
Peter Lynch was one of the best growth investors of all time. As the Magellan Fund manager at Fidelity Investments between 1977 and 1990, he averaged a 29.2% annual return. Q1 2021 hedge fund letters, conferences and more The fund manager's investment strategy was straightforward. He wanted to find growth companies and sit on them Read More
In Paul Tough’s book, How Children Succeed: Grit, Curiosity, and the Hidden Power of Character, he tells the story of an English psychologist Peter Cathcart Wason, who came up with an “ingenious experiment to demonstrate our natural tendency to confirm rather than disprove our own ideas.” [Shane Parrish, Farnam Street]
Excerpts from Mosaic: Perspectives on Investing (Mohnish Pabrai)
Defensive Dealmaking or Panicky Preemption?
My last post on Facebook Inc (NASDAQ:FB)’s acquisition of Whatsapp brought a whole host of responses, some of which took issue with my argument that it is easier to explain the deal using pricing metrics, especially ones that are used in the social media sector (# users) than with valuation models or logic. [Aswath Damodaran , Musing on Markets]
Warren Buffett’s Age-Old Secret on How to Get Rich
When it comes to stocks, Ben Graham’s mentally-ill fellow Mr. Market comes to you daily and quotes a random price that causes you to behave irrationally. [Vishal Khandelwal, Safal Niveshak]
GameStop Won’t Stop… For Now
GameStop Corp. (NYSE:GME) was amongst the earliest champions of this new system and benefitted wildly. Through its trade-in program, gamers gained discounted access to top games with only a short few weeks or months delay to its initial release. [Ivey Business Review]
Bubble to bust to recovery
No matter how you look at it, the U.S. housing market has been on a wild ride over the past few years. The reason is simple: lots of people suddenly had an easy time borrowing money to buy houses – until they couldn’t. [Matthew C. Klein, Bloomberg]
Hedge Fund Fail-Mates
Two hedge fund strategies failed to keep up with their booming industry last year: macro and managed futures. Both suffered weak overall performance in 2013, and not for the first time, according to eVestment data. [aiCIO]
Wall Street Trader
The story of former Jefferies MBS trader Jesse Litvak, who is currently on trial in New Haven federal court accused of defrauding investors of $2 million by lying on trades of mortgage-backed securities, is well known to regular readers. [Tyler Durden, Zero Hedge]
ETF Replacements For Fidelity’s Contrafund
Since exchange-traded funds have been eating mutual funds’ lunch for years now, I imagine investors would like to think about how to make the switch to ETFs. [Elisabeth Kashner, ETF.com]
Shareholder Activism in M&A Transactions
Shareholder activism, which has increasingly occupied headlines in recent years, continued along its sharp growth trajectory in 2013. [Alan M. Klein, Harvard Law School Forum]
Now hiring: Head of hedge fund PR
Recent examples include Lorie Coulombe, who joined $26 billion Davidson Kempner Capital Management as director of corporate communications in January. [Lawrence Delevingne, NetNet]
Should Google, Apple and Facebook Act Like Venture Capital Firms?
Since 1988, Apple Inc. (NASDAQ:AAPL) has made 54 acquisitions. Since 2001, Google Inc (NASDAQ:GOOG) has made 145. Since 2005, Facebook Inc (NASDAQ:FB) has made 45. Acquisitions are made to protect current positions, to grow and innovate. What about strategic investments? [Ivaylo Ivanhoff, Ivanhoff Capital]
A China Fraud Dissected
Lawrence Blitz v. AgFeed Industries, Inc., Goldman Kurland & Mohidin LLP, McGladrey & Pullen LLP, et al is a securities fraud class action where investors claim the company’s expansion was “fueled in large part by fraud.” [Francine McKenna, re: The Auditors]
Don’t Short Addictions
If you look at some of the biggest winning stocks throughout history, many of them are a result of human addictive behavior. Go back and look at the longer-term charts of: Coffee stocks Starbucks Corporation (NASDAQ:SBUX) Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR), Alcohol Anheuser Busch Inbev SA (ADR) (NYSE:BUD) and many, many other examples. [Joseph Fahmy]
Hottest Links: Not The Onion
Man Has Sex With Pizza, Complains To Domino’s About Burnt Penis
Pizza is love. Pizza is sex. Pizza could practically lead to an orgasm. Pizza always makes you happy, although sometimes it ends in regret, like a drunken hook up. Pizza never tells you it doesn’t love you, and you can share it if you can’t handle it all. Pizza is what makes the world go round. For one man, every girl’s dream of having sex with pizza came true. [Lea Finch, TSM]