Hottest links for Monday, March 10th, 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. To kick off your week, we’ve got Bitcoins everywhere, the tricky timing of a peaking bull market, and an accounting guru’s new method of defining profitability.
Monkeys and Stock-Picking
While I don’t have data going back 20-30 years, I definitely wanted to test this “Monkey Hypothesis” in the Indian stock market. Thus I did this small exercise of creating three Monkey Portfolios, one each from the BSE-Sensex, BSE-200, and BSE-500 indices. Here are the three Monkey Portfolios I created this way… [Vishal Khandelwal, Safal Niveshak]
Liberty Global – Deep Dive into Media Companies Series Part 1
In my view, Liberty Global plc (NASDAQ:LBTYA) (NASDAQ:LBTYB)’s strategy of rolling up the fragmented cable industry in Europe is very similar to the TeleCommunications Inc. (TCI) playbook in the 1980’s. [Richard. ValueVenture]
Bitcoin Q & A: Bubble or Breakthrough? Both! Cult or Currency? Both!
Warren Buffet is already on record as saying that Bitcoin is “not a currency, because it does not meet the criteria of a currency, including being a store of value”. [Aswath Damodaran, Musing on Markets]
Selling a Stock: Good Reasons and Common Mistakes
There are good reasons and common mistakes made by value investors when selling a stock. We put a lot of emphasis on investment decisions , especially the buy side. But the sell side can make the difference between success and failure. [Ken Faulkenberry, The Arbor Investment Partner]
MG Book Club – The Intelligent Investor: A Century of Stock-Market History (Chapter Three)
This is the third discussion of the ModernGraham Book Club’s reading of The Intelligent Investor by Benjamin Graham (affiliate link). In last week’s discussion, we talked about the second chapter, dealing with the effects of Inflation. [Benjamin Clark, ModernGraham]
How to Know When the Bull Market Peaks
Following the bull market’s five-year anniversary over the weekend, plenty of chatter has ensued about how much longer the rally will last. The S&P 500 (INDEXSP:.INX) has risen 177% from the March 2009 lows, a rally that has pushed the stock index to new records and placed it in the upper echelon of historic bull markets. [Steven Russolillo, MoneyBeat]
Value Based Mean Reversion Candidate within Home Furnishings Industry
Last week I added shares of tiny micro cap Stanley Furniture Co. (NASDAQ:STLY). STLY trades at 52 week low and has a 1996 market value. Recent and continued negative financial performance affected the price decline. [ShadowStock]
Short cuts: Gronlandsbanken, SIAS SpA, Thermador, April
Already some weeks age, Gronlandsbanken reported 2013 numbers and published their 2013 annual report, which is again a must read for anyone interested in Greenland. The bank seems to be a little bit more optimistic than last year. [Memyselfandi007, Value And Opportunity]
Avalon Correctional, an unlisted information arbitrage
I came across Avalon Correctional Services, Inc. (OTCMKTS:CITY) and a press release filed the same day announcing a tender offer in response to a lawsuit ruling. Company tender offers can be a great source of value for investors. [Nate Tobik, Oddball Stocks]
Did SPDR S&P 500 ETF Trust (NYSEARCA:SPY) Just Reveal a Surprising Market Inefficiency?
Cristian Zarcu of Trade DynamiX argues in an interesting blog post over at Tabb Forum that a half second’s trading last week highlights an inefficiency in how business gets done in U.S. markets — one that may raise questions about the rules governing trading. [Brendan Conway, Focus On Funds]
A top accounting guru’s compelling new measure for profitability
A big challenge for investors is piercing management’s feel-good, “it’s all great if you leave out the bad stuff” earnings metrics to measure a company’s true profitability. Even the official GAAP accounting numbers frequently need plenty of scrubbing to reveal the real picture. [Shawn Tully, CNNMoney]
Why Do Options Prices Predict Stock Returns?
We use a new approach to assess the information transmission between options and stock markets. We study whether the predictive power of option-implied volatilities (IVs) on stock returns lies in analyst-related and/or earnings-related news. We find that two proxies for options trading (IV skew and IV spread) predict analyst recommendation changes, analyst forecast revisions, and earnings surprises. [Tse-Chun Lin, Xiaolong Lu and Joost Driessen, SSRN]
5048.62: All judgments are provisional
I recall the general view in October 2002 was that the 5048 closing in March 2000 was utterly insane, an overvaluation of historic proportions. In contrast, the closing value of 1114 was seen as; “Ah, that’s more like it. [TheMoneyIllusion]
Australian man shrugs off bite from deadly snake with a cold beer
Considered to be the world’s second most poisonous land snake, eastern browns are responsible for more deaths in Australia than any other group of snakes. After giving the snake a ‘whack on the head’ (and grabbing his tinny), Rod waited calmly for an ambulance. [Metro]