Hottest Links: Ackman’s New Short And Beiber’s New “Investment”

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Hottest links for Monday November 4th, 2013 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.

Top stories for today can be found below. Lots of great stuff including our latest on Bill Ackman’s latest big (and undisclosed short). This is not another Herbalife, but while on that note…… ValueWalk was the first site to report that short, which has now been the talk of the financial media for over a year. Anyway, lots of great stuff and if you want to check out a “good investment” backed by Justin Beiber see our Not The Onion section today.

Hottest Links: Stories

Value Investing

Don’t Pay Attention to CNBC CEO Interviews!

We investigate whether media attention systematically affects stock prices through the trading of individual investors by exploiting the substantial discrepancy between perceived and actual information content of 6,937 CEO interviews on CNBC. [Wesley R. Gray, Turnkey Analyst]

A Crucial Component of Our Long-Term Investment Approach

Dividends are by nature the byproduct of healthy free cash flow generation. Of the 4,111 domestic small-cap companies (those with market capitalizations up to $2.5 billion), 1,206 were dividend payers as of the quarter ended 9/30/13; of these dividend-paying companies, 735 had a dividend yield of at least 2%. [TheRoyceFunds]

Domestic Small-Cap Universe Breakown (Up to $2.5 Billion)

Yield Number of Companies
None 2,905
>0 – 1% 200
>1 – 2% 271
>2 – 3% 222
3% and over 513
>0% 1,206
Total Companies 4,111

Lo Siento

The buy-and-hold purists argue for a practiced ignorance of anything and everything that comes down the pike, from valuation metrics to trends to technicals to sentiment to news to opinion to economics to daily closing prices. [Joshua M Brown, The Reformed Broker]

A Dozen Investors Talk about the Folly of Macroeconomic Forecasting

A genuine “value investor” determines ”intrinsic value” based on “owner’s earnings” which will reflect what a private buyer would pay for the same share of the specific business. [Tren Griffin, 25iq]


Ackman Sees Strong Gains From CP, Herbalife Ltd. (NYSE:HLF); New Mysterious Short

Bill Ackman’s Pershing Square is back with a bang, to put it mildly. The long/short equity hedge fund that closed the third quarter with a less that 1% net return, was up +7.9% in October [Tabinda Hussain, ValueWalk] Also see [Lawrence Delevingne , Maneet Ahuja, CNBC]

Rearranging Your Thoughts on Which Sectors are “Risky”

Earlier this year, everyone in investment universe seemed to be plowing money into funds and products marketing the low volatility anomaly. There were a host of new “low-vol” strategies launched and a handful of ETFs, all of them showing the decades-long superiority of low beta strategy. [Joshua M Brown, The Reformed Broker]

change in beta Hottest Links

Levine on Wall Street: Ditch Your Index Funds

Actively managed mutual funds have been so maligned for so long that I guess they were due for a good year, and so Reuters reports that “Some 57 percent of U.S. funds run by active managers are beating their benchmark indexes this year.” [Matt Levine, Bloomberg]

The Low-Risk, Multi-Bagger Mental Model

They are all Japanese-listed equities that have turned in “multi-bagger” share price performances in the past year. In other words, the share prices of Ichigo Group Holdings Co Ltd (TYO:2337), SPARX Group Co., Ltd. (TYO:8739) and Monex Group, Inc. (TYO:8698) (OTCMKTS:MNXBY) are 7x, 4x and 3x higher, respectively, than what they were a year-ago. [Oliver Mihaljevic, BeyondProxy]

Oaktree Buys Cheap Chinese Stocks as U.S. Fairly Valued

Oaktree Capital Group LLC (NYSE:OAK), the world’s largest distressed-debt investor, is buying Chinese stocks after valuations tumbled, Chairman Howard Marks said. [Allen Wan, Bloomberg]

Higher Swiss Leverage Ratio Could Mean End of Universal Bank

Swiss Finance Minister Eveline Widmer-Schlumpf said lenders including UBS AG (NYSE:UBS) and Credit Suisse Group AG (NYSE:CS) may have to pull out of investment banking as she called for their leverage ratios to be raised. [Carolyn Bandel, Bloomberg]

October’s $54B Stock-Fund Flows Were Third Highest Ever

ETF figures from BlackRock, Inc. (NYSE:BLK) show a rush of money showing up right after Washington’s shutdown-and-debt-ceiling impasse ended. Some $24.3 billion of the $32.9 billion entering ETFs worldwide for the month were logged after Oct. 17, just as Congressional leaders reached their deal to reopen the government. [Brendan Conway, Focus on Funds]

Stocks Have Stopped Caring About Earnings

Stocks have stopped caring about earnings trends. And no, this isn’t a one or two month phenomenon, it’s an ongoing trend that may be nearing an end – it couldn’t possibly become more stretched. Here’s what that looks like: [Joshua M Brown, The Reformed Broker]

SP500_Bottomup_EPS_vs_Price -Nov 1 13 Hottest Links

Deutsche to Break Ground With China ‘A Share’ ETF

Investors have had access to Hong Kong stocks and ETFs like iShares FTSE/Xinhua China 25 Index (ETF) (NYSEARCA:FXI) for years. The same isn’t true for stocks in Shanghai and Shenzhen, where outsiders are rare. [Brendan Conway, Focus on Funds]

Smaller Investors Still Love This Equity Rally

The American Association of Individual Investors sweetly and simply asks its members how they feel about stocks every week. And last week, despite this rally’s maturity and all those unanswered questions, fully 45% of respondents said they were still bullish about stocks’ prospects for the next six months, with only 21% bearish. [David Cottle, MoneyBeat]


Your Organization Sucks At Innovating

What can you do to add more innovation to your organization? A question, no doubt, asked in every organization. There are simple accessible answers to that question all over the place and countless best-selling books. [Shane Parrish, Farnam Street]

JOBS Act Leaves Crowdfunding Investors Unprotected

The Securities and Exchange Commission recently released the proposed rules for the crowdfunding exemption of the 2012 Jumpstart Our Business Startups (JOBS) Act. Confirming initial indications, nowhere in the over 500 pages of proposed rules are businesses raising capital under the exemption required to verify that investors remain within legal investment limits. [Jenny Kassan, All]

Yahoo’s Mayer on the Talent Hunt for Tech Journalists

According to the recruiter, who used LinkedIn for the outreach, the effort had the “backing of Yahoo! Inc. (NASDAQ:YHOO) CEO Marissa Mayer, as well as many of our executives, and will be the first of many of these types of editorial models that we expect to roll out globally within the next year.” [Kara Swisher, AllThingsD]

Hottest Links: Not The Onion

Justin Bieber invests in new social network

A new teen-focused social network called Shots Of Me will launch later this week, from the team that previously developed popular social mobile games under the RockLive brand. And its new lead investor is perhaps the world’s most famous teenager: Justin Bieber. [Dan Primack, Term Sheet]

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