Home Business Hottest Links: Buffett Trap, Diversification Again, SENEA, Marks

Hottest Links: Buffett Trap, Diversification Again, SENEA, Marks

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Hottest links for Saturday – Sunday, March 22nd – 23rd, 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.

Hottest Links: Stories

Lots of great articles for this weekend edition of hottest links. NOTE: In the past few days we have made a conscious effort to go with great and many times unnoticed value write ups over hot news and/or interesting items. We always intended to have links focus on the more undiscovered area, since you can find interesting analysis on Bloomberg/ WSJ. However, it is not easy to find great value write ups on obscure companies or really great behavioral write ups on smaller sites. While we will continue to post interesting items regardless of the source, we want to focus more on the ones which might miss your attention. With that said check out this great piece on  Have You Been Sucked Into the Warren Buffett Trap? (not click bait); Without further to do, hottest links for this weekend edition below.

Value Investing

Munger’s Prescription for Corporate Governance

Mr. Munger advocates restraint in executive compensation and finds it particularly admirable when executives agree to accept below market compensation because they are already rich and have enough of an ownership interest in the business to create automatic shareholder alignment.  Obvious examples include Mr. Buffett and Mr. Munger who have received virtually no compensation for their work at Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B): [The Rational Walk]

Hottest Links

Potential Over Looked Value: OTC listed, Foreign

Cvtech Group Inc (OTCMKTS:CVTPF): Deep discount based on historical, relative and intrinsic valuation; 52 week low ; -32% 52 week change; Price is close to 5-year low; P/B and P/S Ratio near 10-year low. Seneca Foods Corp (NASDAQ:SENEA): Asset rich real estate on books below FMV; attracted value institutions, Royce, Kennedy Capital,and Robotti Robert to report additional Q4 2013 purchases. [ShadowStock]


There’s a story floating out there where Charlie Munger talks about owning a small town restaurant, hardware store, gas station, and hotel.  He says he’d feel adequately diversified with that portfolio. I would as well, the reason being that in the analogy I would own and control those properties. [Nate Tobik, Oddball Stocks]

Notes – Original Issue Discount (OID) Tax Implications, Lessons Learned

In the process of carrying out the KV Pharmaceutical Co (OTCMKTS:KVPHQ) capital structure arbitrage trade of 2012, I got caught with my pants down a bit as I didn’t think to sell the convertible notes before they stopped trading. [Valueprax]

Investor Howard Marks on Luck, Risks and the Job that Got Away

In 1969, Howard Marks — armed with degrees from Wharton and the University of Chicago’s Booth School of Business – was still unsure what career he wanted to pursue. [Knowledge @ Wharton]

The thought father: Nobel Prize-winning psychologist Daniel Kahneman on luck

Daniel Kahneman theories of dual-speed processing and heuristics are to cognitive psychology what Darwin’s theory of evolution was to biology. His talent for describing his findings in clear, illuminating language has earned him a popular following most rock bands would envy. [Richard Godwin, London Evening Standard]

Gold & The Last Financial Advice John Templeton Gave Me

The equity markets and bond markets were looking at this period of time being the back half of 2015.  So we saw the yield on the 10-Year go from about 2.7% to 2.77%, which I think was one of the biggest moves on the upside in terms of interest rates since about mid-2011. [Eric King, King World News]

Buffett the Market Timer? Part 1: The Partnership Years

One thing you always hear when talking about this is that Warren Buffett himself is a market-timer.  Well, yes, he has made comments on the market over the years; in 1999/2000 warning of a high market cap to GDP ratio, and again in 2008 telling people it’s “time to buy America”. [KK, The Brooklyn Investor]

The upside of bubbles

In today’s edition of “Is it a bubble?” are the biotechs. Granted we can only say something is a bubble in retrospect but biotech stocks have certainly had a rapid run. [Tadas Viskanta, Abnormal Returns]

Hottest Links

Can the Bloomberg Terminal be “Toppled”?

In the eye of some entrepreneurs and venture capitalists, the Bloomberg terminal is a bit of an anomaly, perhaps even an anachronism.  In the era of free information on the Internet and open source Big Data tools, here’s a business that makes billions every year charging its users to access data that it generally obtains from third parties, as well as the tools to analyze it. [Matt Turck]

3 Reasons NOT to Tap Into Home Equity To Buy Stocks

Herb Greenberg also had a very good response here.  And the always practical Jason Zweig was quick to remind us that equity REITs (the author’s product of choice for your leveraged stock purchase) only fell 60% in 2008. [Cullen Roche, Pragmatic Capitalism]

Sears Holdings and the art of disclosure

Sears Holdings Corp (NASDAQ:SHLD) filed its 10-K. Attached to the filing as Exhibit 10.31 was Balagna’s offer letter dated April 26, 2013. Why it took nearly a year for Sears to release the letter remains one of those great mysteries. [Footnoted]

Mutual fund performance still matters

The age of the superstar mutual fund manager are over. That era seemed to come to a close with the end of the Internet bubble. Now hedge fund managers are the new rock stars and ETFs have taken mind share among sophisticated investors. So it begs the question: do mutual funds still matter? [Tadas Viskanta, Abnormal Returns]

Fund Focus: Morgan Creek’s Mark Yusko Bets On ‘Best Ideas’

In structuring the Morgan Creek Global Equity Long/Short Fund—a hybrid best idea fund of funds that was up a little over 25% in 2013—Mark Yusko borrowed an approach used by the giants of the hedge fund industry. [FINalternatives]

How to know whether stocks are cheap or pricey

Last week, the Fed shared some widely expected news: It will taper more — keeping up a policy of slowly reducing its bond-buying program with the goal to wind it down by year’s end. [Barry Ritholtz, The Washington Post]

Hottest Links: Not The Onion

Wait, What? Bankrupt Detroit Pays $32 To Process A $30 Parking Ticket
I could be wrong, but I think I’ve uncovered Detroit’s financial problem: The bankrupt city pays $32 to issue and process a $30 parking ticket. Obviously, they need to issue more tickets to make up the difference. [Mike Miller , IJReview]

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