Hottest Links: France Invades Switzerland, HLF, Moats, October

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Hottest links for Monday September 30th, 2013 (see prior edition of hottest links here), the late edition. Make sure to sign up by email and never miss a single edition here.

Top stories for today include; What is smart beta and is it really that smart? A great in-depth look at that topic; What does the month of October hold? No one knows for sure, but a great post on that topic; What is a wide moat? Hint it is not leadership in an industry, a look at that topic from an Asian based value investor; You thought Herbalife was over didn’t you? Well it aint over and below is the latest; Warren Buffett has sacked the CEO of one of Berkshire Hathaway’s subsidiaries? Which one and why did he do it? See below; A dozen things you can learn from Ben Graham (my ‘favorite’ value investor); Sahm Adrangi has gone from managing a few hundred K to managing hundreds of million, a look at the man behind it all; Roddy Boyd has a great new investigative piece which means you have to read it; The Swiss army is preparing war games based on a scenario where France invades the country to steal Swiss money (stolen from others)

Hottest Links: France Invades Switzerland, HLF, Moats, October

Hottest Links: Stories


Berkshire’s Benjamin Moore Seeks Third Chief in Two Years

Benjamin Moore, the paint maker owned by Warren Buffett’s Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B), said Chief Executive Officer Robert Merritt left the company. [Zachary Tracer, Bloomberg]

Sahm Adrangi’s 180%

Sahm Adrangi, the 32-year-old founder of Kerrisdale Capital, turns up the volume on his office speakerphone. “No, read it to me,” he says to the trader on the other line. The trader cackles. “I’ve never seen anything like it in twenty years. Okay, ready? Listen to this: ‘Stop acting like a spoiled child. Stop playing with the company as though it’s your new toy. Get Morgans on the market, and sell it to an appropriate buyer … Ask your mother to buy you something else.” [Kevin Roose, NYMag]

Kyle Bass Discloses PennyMac Mortgage Investment Trust Stake

Kyle Bass’ hedge fund firm Hayman Capital has filed a 13G on shares of PennyMac Mortgage Investment Trust (NYSE:PMT).  Per the filing, Hayman has disclosed a 5.1% ownership stake in with 3,570,000 shares. [Market Folly]


One Man’s Path to a Dope Fortune

In the spring of 2010, exasperated police detectives from all over Los Angeles began phoning the county’s consumer affairs department to complain that an outfit calling itself the Active Lawyers Referral Service had misled its working-class customers from 2005 to 2008 by referring them to a law firm that billed them for work—but never finished the job. Their tales got positively woolly: Several claimed that Pejman Vincent Mehdizadeh, the founder of the referral service and the manager of the law firm, had posed as a lawyer and his father, Parviz, had given them legal advice as they sought work visas. [Roddy Boyd, Sird-Online]

The High Price of Digging Up Dirt in China

A Chinese company can have its legitimate critics arrested. There is no way to know whether the third parties an investor relies upon for verification (auditors, researchers) are free of undue influence including threats by the government. [Credit Bubble Stocks]

Bill Ackman Tells PwC, “Herbalife Is Your Problem Now”

Bill Ackman went beyond his ongoing accusation that Herbalife Ltd. (NYSE:HLF) is pyramid scheme. Ackman sent a 52-page letter to Dennis Nally, Chairman of PricewaterhouseCoopers International Ltd. and Bob Moritz, Chairman and Senior Partner of PwC US.  [Francine McKenna , re: The Auditors]

The Perils of Misinterpreting Conference Calls

On 15 September 2010 I wrote the first of a series of blog posts which implied that Universal Travel Group (OTCMKTS:UTRA) was likely a fraud. Still, not everybody agreed with the analysis and they pointed to a partnership with Agoda (a subsidiary of Inc (NASDAQ:PCLN)) which was announced on 13 July 2010. Moreover the CEO of Priceline in a conference call (3 August 2010) seemed to endorse Universal Travel. [John Hempton, Bronte Capital]


A Dozen Things from Benjamin Graham about Investing

The last time I made any market predictions was in the year 1914, when my firm judged me qualified to write their daily market letter based on the fact that I had one month’s experience.  Since then I have given up making predictions. [Tren Griffin, 25iq]

5 Brand-New Warren Buffett Quotes

At a recent conference at Georgetown University, investing legend Warren Buffett of Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B) sat down with Bank of America Corp (NYSE:BAC)’s Brian Moynihan to discuss various topics. [Patrick Morris, Motley Fool]

Value Investing

Banking Primer Part 3

In the past two bank primer posts I discussed a specific aspect related to bank investing, in this post I want to profile a cheap community bank.  The bank is First Northern Community Bancorp (OTCMKTS:FNRN). There are hundreds of little banks like this, cheap and safe, First Northern was chosen almost at random, but it’s a great case study. [Nate Tobik, Oddball Stocks]

Amazon and Facebook: Then and Now

With the stock prices of, Inc. (NASDAQ:AMZN) and Facebook Inc (NASDAQ:FB) eclipsing new highs each day, it’s easy to forget that many pundits out there deemed founder CEOs Jeff Bezos and Mark Zuckerberg unfit to run these two companies, respectively. [Pundittracker]

Why Market Leadership Does Not Equal Wide Moat?

The world’s second-largest publicly traded wine maker Treasury Wine Estates Ltd (ASX:TWE) (OTCMKTS:TSRYY), market value A$2.8 billion), whose brands include Penfold, Wolf Blass and Beringer….  [Koon Boon Kee, BeyondProxy]


GM Kicks Pensions Can Down the Road

General Motors Company (NYSE:GM)’s vice chairman Steve Girsky has ruled out negotiating pension terms with unionists until 2015. [Charlie Thomas, ai CIO]

Dickens’ Banking Brand Becomes Reality

It may be the best of times or the worst of times but Tellson’s – the fictional bank featured in Charles Dickens’ classic novel A Tale of Two Cities – is to become an actual City name. Bishop previously worked at Bank of America Corp (NYSE:BAC), Community Bankers Trust Corp. (NASDAQ:ESXB) and managed the long-term corporate bond book at US hedge fund Caxton ……… [Joe McGrath, eFinancial News]

What Makes Alternative Beta Smart?

According to Towers Watson & Co (NYSE:TW) (2013), a leading global investment-consulting firm, “Smart beta is simply about trying to identify good investment ideas that can be structured better… smart beta strategies should be simple, low cost, transparent and systematic.” [Chris Brightman, Research affiliates]

October: Into the Wild

As much as we’d like to fret, we must also keep in mind that October has had the magical ability to serve as inflection point in times of market stress. Not that it applies this year, with our 20% S&P 500 (INDEXSP:.INX) gain headed into the month, but in the 37 years…. [Joshua M Brown, The Reformed Broker]

The Best Way to Get Rich Politicians to React….

The debt ceiling negotiations are turning into another circus as Congress appropriates spending and then uses the debt ceiling to threaten a government shutdown after the fact….But something will come to the rescue here and force these circus performers to get their act together. [Cullen Roche, Pragmatic Capitalism]

Hottest Links: Not The Onion

Swiss Army Prepared For Invasion by Bankrupt French

The Swiss army reportedly ran a war game earlier this year based on the premise that France goes broke, it breaks into little warring factions and one of them decides to invade Switzerland to get back the money in the secret bank accounts. [Tom Bemis, MarketWatch]

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