Hottest Links: Baupost, Conferences, S&P 500 Valuation Debate

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Hottest links for Saturday – Sunday November 2nd – 3rd, 2013 the weekend edition (see Friday’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 good/interesting stories past few days. Also ICYMI see Baupost Group’s latest purchase; our notes from Invest For Kids, Ira Sohn London and Great Investors’ Best Ideas (GIBI) Investment Symposium from this past week; Lots of interesting articles about market valuation from a variety of perspectives.

Hottest Links

S&P 500 debate

A Reasonable Explanation For The Upward Tilt Of US Stock PE Ratios

One of my favorite, that is hard to find anywhere, is the P/E for the MEDIAN stock in the S&P 500 (INDEXSP:.INX). Often if you look at the broad market it is distorted by it being a market cap index. [Mebane Faber]

Is the Stock Market Expensive?

One of my whip-smart readers, Cathy Leow, wrote in a really interesting take to explain the gradual and undeniable upward tilt for the PE ratios of US stocks in recent years. [Joshua M Brown, The Reformed Broker]

Bubbles, Bubbles Everywhere

If you look at Figure 9.5, you can see the gold bubble in the 1970s. (Some academics have noted that the surge in gold prices closely followed the increase in inflation in the late 1970s, reflecting its value as a hedge against inflation. When inflation fell in the 1980s, gold prices followed. So it is an open question whether gold in the 1970s should be considered a bubble.)

Fast-forward 10 years, and you can see from Figure 9.6 that the bubble in the Japanese Nikkei looked almost exactly the same.

[John Mauldin, The Frontline]

For some investors, it feels a lot more like 1999 than 2013. [Gregory Zuckerman, WSJ]

Value Investing

The Things You Shouldn’t Pay Attention To

Morgan Housel, “Most financial advice tries to make people better investors. I’ve come to the conclusion that it’s more helpful to focus on how to become a less-bad investor.”  [Morgan Housel, The Motley Fool]

When Buffett Was Right, But We Were Too Scared

Just over five years ago, global financial institutions appeared on the verge of collapse and stocks were sinking, Warren Buffett wrote an op-ed in The New York Times that seemed, at that time, out of touch with the pulse of the market. He encouraged investors to buy. A survey released this week by asset manager BlackRock, Inc. (NYSE:BLK) found that most Americans still are skittish when it comes to investing in anything. [David Weidner, MoneyBeat]




Here’s Today’s “Know Your Morningstar!” Quiz

Here are the total return charts for two short-term bond funds.  One is the sole Morningstar Gold Medalist in the group, representing “one of the industry’s best managers, and one of the category’s best funds.”  The other is a lowly one-star fund unworthy of Morningstar, Inc. (NASDAQ:MORN)’s notice. [David, Mutual Fund Observer]

Hottest Links November 1, 2013

Family Offices Look to Invest in Hedge Funds

A recent survey from Barclays PLC (ADR) (NYSE:BCS) (LON:BARC) shows that family offices are looking to invest $4 billion in hedge funds  over the next year.  This is in addition to an expected reshuffling of nearly $29 billion in aggregate existing hedge fund investments. [Managed Funds Association]

Football Player Derivatives Are the Best Derivatives

The deal, which Jonathan Mahler wrote about here the other day, is that Fantex buys, say, a 20 percent interest in an athlete’s future sports-related earnings, for, say, $10 million up-front, and then sells shares in those earnings to investors to raise the $10 million (and a 5 percent fee for Fantex of course). [Matt Levine, Bloomberg]

Most Index Funds are Macro Funds

What I find interesting though, is that most people don’t think of index funds as macro investing.  But what is an index fund?  An index fund is just an inactive bet on a macro trend. [Cullen Roche, Pragmatic Capitalism]

Carnage in Gold and Miners: Buying Opportunity?

The data, not to mention another sharp rise in the dollar and reports of slower Indian gold buying around the Diwali festival, has gold futures losing 1.1% to $1,310 Friday morning, and heading for the fourth loss in five sessions. SPDR Gold Trust (ETF) (NYSEARCA:GLD) is off 1.1% to $126.38 Friday. [Brendan Conway, Focus on Funds]

ETF Contest Winners (and non-Winners)

I had a lot of fun receiving ideas for my little ETF Contest.  We received over 200 submissions.  They included everything from the absurd, to impossible, to hilarious, to already filed, to actually a few pretty good ideas. [Meb Faber]

Jeremy Allaire: From Brightcove to Bitcoin

Serial entrepreneur Jeremy Allaire yesterday announced the launch of Circle, a Boston-based developer of digital currency acceptance tools for merchants. He also disclosed that the company has raised $9 million of Series A funding from Accel Partners and General Catalyst, both of whom helped Allaire create Brightcove Inc (NASDAQ:BCOV) back in 2004. [Dan Primack, Term Sheet]

Goldman Sachs To Millennials

On Wednesday, Goldman Sachs Group Inc (NYSE:GS) acknowledged that it had suggested that its junior bankers not work on the weekend. [Claire Zillman, Fortune]

Oops! Deutsche Bank Talks Proofreading…With A Typo

Deutsche Bank AG (NYSE:DB) (ETR:DBK), which roughly 18 months ago posted a recruitment video to its career site and YouTube channel. The three-minute piece offers job advice to candidates, including some tips on proofreading. [Beecher Tuttle, eFinancialCareers]

Wells Fargo Now Most Profitable Bank In U.S.

Analysts expect Wells Fargo & Co (NYSE:WFC) to make $20.8 billion for 2013. That’s more than Bank of America Corp (NYSE:BAC), Goldman Sachs Group Inc (NYSE:GS), and Morgan Stanley (NYSE:MS) are expected to earn combined this year. And it’s $3.5 billion more than Wells’ closest profit rival, JPMorgan Chase & Co. (NYSE:JPM), which had held the largest profit title for three years in a row. [Stephen Gandel, Term Sheet]

Dodd-Frank Is Indeed Taking Root

The slow rollout of the Dodd-Frank Act has left many frustrated, but in reality, much progress has been made in shaking up the financial industry. [David Zaring, DealBook]

What Fate Awaits The Next People To Question Charlie Gasparino’s Reporting

Charlie Gasparino remembers his days at BB fondly, as a time of working in the trenches, honing his craft, sporting the mustache and suspenders at left, and hitting the speed bag that hung over his desk in between stories, the rumor he heard earlier today that the publication might be closing struck a chord. [Bess Levin, DealBreaker]

Vanity Fair Closes Reader Comments On Loeb Story

Vanity Fair’s exposé on Dan Loeb drew so many “libelous, personal attacks” in the comments section of its website that the Condé Nast magazine said it finally just shut them down. [Michelle Celarier, New york Post]

Hottest Links: Not The Onion

Abu Dhabi wants tougher laws against sorcery

Lawyers and a member of the Federal National Council have said a 1983 law that considers sorcerers con artists was insufficient, and have called for the law to be amended to allow harsher punishment. [The National]

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