Home Business Hottest Links: Negative EV Nano-Caps; Fannie, Freddie Profits

Hottest Links: Negative EV Nano-Caps; Fannie, Freddie Profits

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Hottest links for Saturday-Sunday, January 25-26thth, the weekend edition (see Friday’s edition here). Get our free daily newsletter (which HAS BEEN RECENTLY UPDATED) and never miss a single linkfest. Also, now if you sign up you will get our new e-book on value investing.

Lots of great stories from yesterday and today; Macro tourists move along, meet the volatility tourists; A look at the latest nano cap, deep value stocks with negative EV; Skill versus luck debate revisited (again); Meb Faber has a really good piece on his 2014 ‘outlook’, lots of great valuation stats; Why is the Government ‘hiding’ Fannie and Freddie massive profits; We just cannot get rid of this Canadian…. Justin Bieber Fans Are Harassing ESPN Michigan Beat Writer Chantel Jennings Instead Of Chantel Jeffries; That and much more in today’s hottest links.

Hottest Links: Stories

Value Investing

Nano Cap Deep Value: Negative Enterprise Value

Why consider Phoscan Chemical CP (OTCMKTS:PCCLF): consistent  share count reduction dating back to 2008, value created by shares purchased below net cash, strong positive insider buying, selling for 30% of book value, 1.86% of shares held by value institution Royce. [ShadowStock]

Hottest Links

On Making Investment Mistakes and Getting Lucky

While I was working on this post, Howard Marks’s latest memo came out.  There I learned that Twitter Inc (NYSE:TWTR) founder Jack Dorsey claimed, “Success is never accidental.”  Coming from the founder of a hugely successful, internet, 140-character-limited SMS service, it makes you wonder what luck is. [Student of Value]

Celesio AG (ETR:CLS1) (FRA:CLS1) (OTCMKTS:CAKFY) Merger arbitrage “Post mortem”

So roughly 10 days after the first failed attempt, Haniel today announced that they have an agreement with both, McKesson Corporation (NYSE:MCK) and Elliott and that Haniel will sell for 23,50 EUR per share to McKesson. [ValueAndOpportunity]

11 Rules for Critical Thinking

A fantastic list of 11 rules from some of history’s greatest minds. These are Prospero’s Precepts and they are found in AKA Shakespeare: A Scientific Approach to the Authorship Question: [Shane Parrish, Farnam Street]

JANA Q4 letter to shareholders

Action packed letter from Barry Rosenstein to investors, check it out here. [Mark Melin, VW]

Market Outlook 2014

Foreign equity markets and real estate were mixed.  Below is a representative table of 20 basic ETFs across the broad asset classes: [Mebane Faber]

aaa Hottest Links

Insider Trading via Your Kid’s Accounts?

This study argues that a high proportion of trading through underaged accounts is likely to be controlled by informed guardians seeking to share the benefits of their information advantage with young children, or camouflaging their potentially illegal trades. Consistent with this conjecture, we find that the guardians behind underaged accounts are very successful at picking stocks. [Wesley R. Gray, Turnkey Analyst]


‘Volatility Tourists’ Get Crushed

Today we see it in the 28% surge in the CBOE Volatility Index. The market for volatility futures — it used to be the province of hedge funds and floor traders; now it’s wide open via ETFs — is sending pain through the exchange-traded funds and notes tied to it. [Brendan Conway, Focus on Funds]

Who’s behind GS Elevator? Lloyd Blankfein would love to know

The author is a mystery; he has described himself as a career investment banker but won’t give any details, including whether he works at Goldman Sachs Group Inc (NYSE:GS)  or ever has. [Christina Rexrode, The Tell]

A Spike in Options Trading Before Herbalife’s Stock Fell

Last week, before a senator released letters that sent the shares of Herbalife Ltd. (NYSE:HLF) into a tailspin, certain investors were positioning themselves to make money if the stock fell. [William Alden, DealBook]

One Way Or Another: The SEC Versus The Chinese Big Four Firms

Blistering. That’s how, in so many words, most media described the decision by Securities and Exchange Commission Administrative Law Judge Cameron Elliot to ban the China units of the Big Four accounting firms—Deloitte Touche Tohmatsu CPA Ltd. (DTTC), Ernst & Young Hua Ming LLP, KPMG Huazhen and PricewaterhouseCoopers Zhong Tian CPAs Ltd— from auditing US-listed companies for six months. [Francine McKenna, re:The Auditors]

Former Phone Psychic Fit Right in as a Quant Trader

The story is that CTI Group LLC and Cooper Trading, operating collectively as CTI Group Holdings Inc (OTCMKTS:CTIG) and controlled by two characters named Stephen Craig Symons and James David Kline, sold computer programs named “Boomer” and “Victory” that would spit out S&P futures trades that you should do. [Matt Levine, Bloomberg]

Why Is the U.S. Downplaying Huge Profits at Fannie, Freddie?

No biggie. That’s the reaction a top Treasury Department adviser took Wednesday to the record profits hauled in by Fannie Mae / Federal National Mortgage Association (OTCBB:FNMA) and Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC) over the past year. [Nick Timiraos, MoneyBeat]

When the hedge doesn’t work

I run a hedge fund which means I am meant to hedge risk. However if you hedge away all your risk you hedge away all your returns. [John Hempton, Bronte Capital]

Hottest Links: Not The Onion

Dumb Justin Bieber Fans Are Harassing ESPN Michigan Beat Writer Chantel Jennings Instead Of Chantel Jeffries

Justin Bieber fans, it turns out, aren’t always such a peaceful bunch. ESPN Michigan beat writer Chantel Jennings, who has absolutely no relation to Bieber’s new fling, model Chantel Jeffries, is getting the ire of the Beliebers on Twitter, simply because her name is similar. [Matt Lombardi, College Spun]

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