Hottest links for Wednesday, January 15th, the late edition (see Tuesday’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.
Top stories for today are included below. Stories today include a piece on Nader’s seeming one-eighty from consumer advocate to capitalist firebrand, some cold hard numbers on Bitcoin and Bitcoin alternatives, and a tasty little piece on the ongoing Libor scandal, enticingly titled “Libor: The Spider Network”. Also, don’t miss today’s Not The Onion, as a parrot rats out his owner for drunk driving.
Hottest Links: Stories
Value Investing
Cyclically Adjusted Dividend Yield
I changed the earnings input to dividends.** So instead of the trailing 10 years of earnings, this is what the trailing 10 years of dividends looks like, or as I’m calling it, CADY (Cyclically Adjusted Dividend Yield): [Eddy Elfenbein, Crossing Wall Street]
Gold deserves love, tap Agassi for financial advice
The Onion offered that investing advice and more in a Q&A published today by IndexUniverse. The article comes ahead of IndexUniverse’s Inside ETFs conference later this month, where the satirical publication’s top editor will be a keynote speaker. [Victor Reklaitis, MarketWatch]
New Michael Lewis Book on Financial World
Michael Lewis, whose colorful reporting on money and excess on Wall Street has made him one of the country’s most popular business journalists, has written a new book on the financial world, his publisher said on Tuesday. [Julie Bosman, The New York Times]
Reddit AMA with Accounting Guru Michelle Leder
Am happy to try and answer any questions that you may have about SEC filings, which I first started reading back in the stone ages when I had to get them shipped to me in paper format. Trust me, it’s so much easier now! [Michelle Leder, Reddit]
Working Together: Why Great Partnerships Succeed
Why do partnerships work well? That’s the question Michael Eisner explores in Working Together: Why Great Partnerships Succeed. [Shane Parrish, Farman Street]
Silverdell Case Study
One of these investments is Silverdell Plc. (LON:SID). Investors in this company, including at least one professionally managed value investment fund, thought they were getting good value for their money, until they suddenly without warning lost their entire investment. [Investing Sidekick]
My Investment Thesis on Rain Industries
The investment idea presented in this report is a little known industrial business based out of India with global operations called Rain Industries Ltd (BOM:500339) (NSE:RAIN). [Parry Pasricha, BeyondProxy]
Hennessy Advisors, Inc. – HNNA
Time to discuss one of my biggest missed opportunities of 2013: Hennessy Advisors Inc (OTCMKTS:HNNA). In late 2012, Hennessey completed a transformational acquisition that was highly likely to increase the company’s earnings and share price, which was then hovering around $3. [OTC Adventures]
Funds
Why Invest In Hedge Funds Anymore?
Two thousand and thirteen was yet another year of underperformance for hedge funds. Several headlines have highlighted this and drawn important conclusions about the demise or transformation of hedge funds. In fact, hedge funds have underperformed the overall equity index in the last five years. [Dr. Vinay Nair, FINalternatives]
The Consensus Hates Bonds. Should You?: Ritholtz Chart
The top panel shows the position of the major firms. As the top row (all in green) shows, they are all bullish on global equities. [Barry Ritholtz, Bloomberg]
The Equity Hedge Fund Correlation
What you’re looking at below is the correlation between equity hedge funds (long/short mostly, I’d assume) and the plain vanilla benchmark that they’re supposedly diversifying your portfolio away from. [Joshua M Brown, The Reformed Broker]
Watch Energy and Guns on the Trip to the Peak
Unlike drones and more like electrocardiogram plots, investments rarely go in straight lines but rather undulate, frequently reversing directions, which is normal. [A. Michael Lipper, Inside Investing]
Intuitive Surgical, Inc. (NASDAQ:ISRG)’s Good News — Less Bad
Total revenue of $576 million for the fourth quarter will beat analysts’ estimates. That’s better than the 7% decline in the third quarter. However, for perspective: It’s still down 5% from a year earlier, when the company was posting a 22% gain. [Herb Greenberg, Herb on TheStreet]
9 High Yield Dividend Stocks
High yield dividend stocks are attractive to investors in this environment of low interest rates. We went looking for some of the highest yielding dividend stocks in the market and then pared the list down by eliminating stocks with negative P/E ratio. [Shailesh Kumar, Value Stock Guide]
| Company Name | Symbol | Dividend Yield | Market Capitalization | P/E | Price/Book |
|---|---|---|---|---|---|
| GREAT NORTHERN IRON ORE PROPERTIES | GNI | 44.13% | $34.0M | 2.34 | 3.4 |
| ELLINGTON FINANCIAL LLC | EFC | 13.16% | $595.3M | 5.99 | 0.95 |
| WINDSTREAM HOLDINGS INC | WIN | 12.64% | $4.7B | 37.5 | 5.52 |
| KCAP FINANCIAL INC | KCAP | 12.58% | $265.0M | 8.31 | 0.99 |
| PROSPECT CAPITAL CORP | PSEC | 11.84% | $3.2B | 10.21 | 1.04 |
| TICC CAPITAL CORP | TICC | 11.31% | $547.1M | 8.88 | 1.04 |
| MIND CTI LTD | MNDO | 11.27% | $40.2M | 15.7 | 2.02 |
| BLACKROCK KELSO CAPITAL CORP | BKCC | 11.16% | $693.4M | 11.11 | 0.99 |
| MCG CAPITAL CORP | MCGC | 11.01% | $323.3M | 12.5 | 0.89 |
Folly of the Fed
Yellen could legitimately defend quantitative easing in a number of ways. She could, for example, argue that the risks of high asset prices are counterweighed by QE’s intended benefits, including the prevention of deflation. But, instead, she’s defended the program with meritless arguments to claim that equity prices are not at dangerous levels. [Christopher Pavese, The View from the Blue Ridge]
Gold and Gold Miners: So Bad They Just Might Be Good
Most gold trends look terrible entering 2014. Gold is technically weak, falling in most currency terms, and cannot hold its own versus other assets. [Brendan Conway, Focus on Funds]
Avenue Capital Discloses Punch Taverns Position
Marc Lasry’s Avenue European Management hedge fund has been building a stake in London listed pub company Punch Taverns plc (LON:PUB) (OTCMKTS:PCTVY). [Market Folly]
Nader, an Adversary of Capitalism, Now Fights as an Investor
My interest in Mr. Nader’s latest cause was touched off by his recent criticism of the attempt by John Malone’s Liberty Media Corp (NASDAQ:LMCA) to buy the 47 percent interest it did not already own in Sirius XM Holdings Inc. (NASDAQ:SIRI), the satellite radio operator. [Steven M. Davidoff, DealBook]
Hedge Funds the Right Focus for ‘Systemic’ Label, Fitch Says
It’s not clear whether regulators will apply the “systematically important financial institution” designation to giant asset managers such as BlackRock, Inc. (NYSE:BLK) and Vanguard Group. [Brendan Conway, Focus on Funds]
Crypto-currencies statistics
Bitcoin, Litecoin, Namecoin, Terracoin, Peercoin, Novacoin, Freicoin, Feathercoin stats. [BitInfoCharts]
Robo-adviser Wealthfront grows, but is it mainstream or just a niche?
Online financial adviser Wealthfront Inc. has passed $500 million in assets under management, putting it at the lead of “robo-adviser” offerings that also include Betterment (which recently reported $360 million of AUM) and Personal Capital Corp. (over $200 million of AUM). [Michael Kitces, Investment News]
Libor: The Spider Network
The Libor manipulation scandal has ensnared at least 17 financial institutions and 22 individuals in a wide-ranging investigation spanning 11 countries and four continents. [Jovi Juan, David Enrich, The Wall Street Journal]
‘Guru Funds’ Arise to Replicate Success of Star Investors
It cites two ETFS — The Guru Index ETF and the AlphaClone Alternative Alpha ETF — and one mutual fund — Virtus Wealth Masters fund. [Dan Weil, MoneyNews]
Wells Fargo wins forward-looking statement award
On Tuesday, both Wells Fargo & Co (NYSE:WFC) and JPMorgan Chase & Co. (NYSE:JPM) reported earnings, which attracted plenty of coverage, including this Wall Street Journal story, whose headline declared that Wells Fargo was “Now No.1 Bank Profit Maker” beating JP Morgan, which had held that spot since 2010. [Footnoted]
Hottest Links: Not The Onion
Parrot rats out driver to cops at alcohol checkpoint
A Mexican motorist was busted drunken driving after his pet parakeet ratted him out to police. Guillermo Reyes, 49, was pulled over by traffic officers at a routine alcohol checkpoint in Mexico City last week. [Lee Moran, Daily News]
