Hottest Links: Greek Stock Surge, Vanishing Upside, And Smart Beta

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Hottest links for Thursday 8th January, the late edition (see Wednesday’s edition of hottest links). Get our free daily newsletter (the updated version) 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 below.  Today, we have some excellent stories including Greek stocks going on a rampage to close out the year, a guide to avoiding companies with too much debt, and Carson Block sticking to the “short China” idea even as the teeter-totter swings toward the ground with buyers.

Hottest Links

Value Investing

Alternative Thinking vs. Alternative Assets

If you’ve sat in on any presentations on alternative assets, or picked up any of the marketing materials, you will have heard all the reasons why financial advisers and portfolio managers should own alternatives. [Lauren Foster, Inside Investing]

How to avoid companies with too much debt

Taking on some debt makes sense because many companies can generate more earnings from investing borrowed money (in a new factory for example) than they’d have to pay in interest.  [John Kingham, UK Value Investor]

Mental models mismatched to reality

In 1997, inspired by Arthur’s lead, two physicists, Yi-Cheng Zhang and Damien Challet, tried creating the simplest possible example of a game in which intelligent play requires perpetual adaptation and learning. [Chetan Parikh,]

Klarman’s Margin of Safety: Ch.13 – Part 2

This is a continuation in our series of portfolio construction & management highlights extracted from Seth Klarman’s Margin of Safety. In Chapter 13 (Portfolio Management and Trading) – Part 2 below, Klarman shares his thoughts on the illusory nature of liquidity, and the tricky task of knowing when to sell. [PMJar]

Suggestions and ideas (pt. 1)

To keep the post relatively short but hopefully interesting, I’ll list the stocks, along with a short description of what they do and my initial impressions. Stocks include: Finsbury Food Group plc (LON:FIF) (OTCMKTS:FFGRF), Pennant International Group plc (LON:PEN), MS International plc (LON:MSI), CareTech Holdings plc (LON:CTH) and Games Workshop Group PLC (LON:GAW) (OTCMKTS:GMWKF). [Expecting Value]


Greek Stocks Surge; Best Start To Year Since 1994

Much like the rest of peripheral Europe, Greek stocks have been on a rampage in the first few days of the year. [Tyler Durden, Zero Hedge]

Hottest Links

Investors Are Chastened. That’s A Good Thing

Markets boomed. Stocks hit a record, with the S&P 500 INDEX (INDEXCBOE:SPX) index up almost 30 percent, the best performance in almost 16 years. [Jesse Eisinger, Pro Publica]

Is There Enough Left on the Upside?

One of the many necessary elements for a peak to occur is the belief that the current market rise will continue. [A. Michael Lipper, CFA, Inside Investing]

Ferri: Smart Beta And Tourist Investors

The latest spin to attract tourist money is “smart beta.” The phrase didn’t exist one year ago, yet a Google search today shows 190,000 results. [Rick Ferri, IndexUniverse]

A China ‘A-Shares’ ETF Gets Truer to Its Name

A spokesman says Market Vectors ETF Trust (NYSEARCA:PEK) began buying those stocks directly today after signing on China Asset Management (Hong Kong) Limited as a partner and subadvisor. [Brendan Conway, Focus on Funds]

Dalio’s Bridgewater Associates Posts Lackluster Returns

Ray Dalio’s Bridgewater Associates, one of the world’s biggest hedge fund firms, had a largely lackluster year when it came to the performance of its two main portfolios. [Matthew Goldstein, DealBook]

How 2013’s Worst Are Faring in 2014

Last year was a great year for the equity market, but there were still 156 stocks in the S&P 1500 that finished down on the year.  [Bespoke Investment Group]

Hottest Links

Carson Block sticks by China short calls as buyers circle

Block is now in the middle of another China battle. In an 81-page report released Oct. 24, Muddy Waters charged that NYSE-listed, Beijing-based NQ Mobile Inc. NQ -2.21%  was “a massive fraud.” [William L. Watts, MarketWatch]



Fitch Analyst Charlene Chu Resigns

Charlene Chu said in an email sent to The Wall Street Journal that she has resigned her position at Fitch and would take a “much needed break for several months” and will “resurface later in the year.” She didn’t say where her next assignment would be. [Alex Frangos, MoneyBeat]

Fusion’s exclusive interview of Felix & Roman Zulauf

Joseph Dedona of Fusion Analytics Research Partners LLC recently interviewed world-renowned money manager Felix Zulauf, and his son Roman Zulauf, CIO of Vicenda Asset Management. [Joseph Dedona, FusionMarketSite]

The Role of Manager Talent in Alternatives

Alternative strategies, including hedge funds, private equity, and venture capital, are expected to continue to outperform public equities and bonds when executed by top-tier managers, according to Commonfund. [Sage Um, aiCIO]

You know it’s cold when

Charlie Gasparino has to psych himself up to annihilate his tricep. [Bess Levin, DealBreaker]

The Goldman Sachs Elevator Is Shopping a Book Proposal

@GSElevator, the Twitter account that claims to relay overheard conversations from inside the Goldman Sachs elevators, has had surprising longevity for an anonymous parody handle. [Kevin Roose, NYMag]

Metso Rang In The New Year With Valmet Spinoff

After a few stops in Australia, the international spinoff (or demerger as the rest of the world calls them) tour continues in Europe with Metso Oyj (ADR) (OTCMKTS:MXCYY)’s recent separation of its pulp, paper and power business. [Spin Doctor, Stock Spinoffs]

Should the SEC Clamp Down on Special Deals for Activists?

It was tied back to deals involving Take-Two Interactive Software, Inc. (NASDAQ:TTWO), ADT Corp (NYSE:ADT) and Yahoo! Inc.(NASDAQ:YHOO) buying back big stakes from activists. [Herb Greenberg, Herb on TheStreet]

Hottest Links: Not the Onion

‘It Happens,’ Says Kentucky Lawmaker Who Accidentally Fired Her Gun in the State Capital

Democratic Kentucky State Rep. Leslie Combs doesn’t think her accidental discharge of a firearm in the state’s capitol building Tuesday afternoon was a big deal. “I am a gun owner, it happens,” Combs told reporters after the incident.  [Abby Ohlheiser, The Wire]

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