Monday, January 26, 2015

Davos 2015 - Sustainable Development A Vision for the Future


Link to video

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Related link: Bill and Melinda Gates' 2015 Annual Letter

Davos 2015 - How Did We Get Here? Big History 101


Link to video

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Related links:

Big History Project

David Christian: The history of our world in 18 minutes

Links

Book of the day (praised by Dan Carlin in Hardcore History Episode 32, which was also very good): Over the Edge of the World: Magellan's Terrifying Circumnavigation of the Globe

Scott Adams: Reaction to Bad News (LINK)

The man with 26 million students [H/T Mish] (LINK)

Dakshana Recognition Ceremony Dec 2014 - Address by Mohnish Pabrai (video) [H/T ValueWalk] (LINK)

Preview: Mohnish Pabrai Office Tour and Conversation with Guy Spier (video) [H/T ValueWalk] (LINK)

Technology and Finance: Drivers of a Profit Margin Explosion (LINK)
In this piece, I’m going to show that the profit margin expansion seen in the U.S. corporate sector over the last two decades has been driven largely by gains in the financial and technology sectors.  I’m then going to examine arguments for and against the sustainability of this shift.
Barry Ritholtz talks to Bill Gross (Part 2) (LINK)

All of the videos from Davos [H/T ValueWalk] (LINK)

Hussman Weekly Market Comment: Is Q-ECB a Favorable Development? (LINK)
Last week, the ECB announced that it will begin a new program of quantitative easing on March 15 – a delay that allows plenty of time for various rugs to be pulled out, if the experience of recent years is informative. Assuming that the program proceeds as announced, the ECB envisions bond purchases of 60 billion euros per month. Fully 92% of these purchases must be made by the central banks of individual countries in the Eurosystem, with the ECB sharing the risk of losses on only 20% of it (12% being investment-grade institutional debt, and 8% being the sovereign debt of Euro-area countries). This was essentially as expected, but - thus far - without an option for national central banks to treat their share of purchases as discretionary. I still suspect that this shoe will drop in the weeks ahead, but there's actually a much more important factor driving our outlook.
Broyhill Case Study: Time Warner Value Creation (LINK)

The Brooklyn Investor discusses Cowen Group as a potential investment (LINK

I don't know much about the company yet, but Cowen Group was also mentioned by Ariel Investments last year in their 3/31/2014 report: 
Once a year, I consider the question, “If I could own only one stock, what would it be?” This year I wrote about Cowen Group, Inc. & Co. (COWN) in my first-quarter letter. Cowen is traditionally known for being a boutique broker-dealer which has been around for nearly 100 years. Actually, the public company, Cowen Group, Inc. & Co., was bought a few years ago by Ramius LLC, which was a 20-year-old privately owned alternative equity management firm. It was a very successful firm and bought the broker-dealer to have a permanent capital base, expand its operations and capitalize on the synergies between the two firms. What we have seen is a very successful turnaround of the broker-dealer business—it has now been profitable for the last five quarters. Ramius LLC has grown its assets under management from $9.4 billion to $11.6 billion from year end to July 1, 2014. The stock still trades below its tangible asset value despite having two businesses that are operating very solidly now. We think it is a very misunderstood company. If you said “Cowen Group, Inc. & Co.,” most investors would still think of the broker-dealer business, which was in trouble a few years ago, and not even realize that this successful $11+ billion asset management business was the driving force behind the company. Additionally, it has very strong leadership. The CEO is Peter Cohen, who was the CEO of Shearson Lehman Hutton from 1983 to 1990. He and his team, who founded Ramius LLC years ago, have very significant stock in the company, so we feel good about the incentive structure.
And for those micro-cap investors out there that might be interested, we recently released our Boyles Q4 letter and mentioned two recent purchases: Mastermyne Group Limited (ASX:MYE) and Cambria Automobiles plc (AIM:CAMB). As always, this is for information purposes only and not a recommendation to buy or sell a security. We currently own shares in both companies but that may change at any time. Please do your own work before making an investment decision. 

Sunday, January 25, 2015

Links

A Dozen Things Learned from Joel Greenblatt about Value Investing (LINK)
Related books: The Little Book That Still Beats the Market and You Can Be a Stock Market Genius 
Related video: Joel Greenblatt on WealthTrack
Macau High Rollers Leaving For Philippines and Vietnam [H/T @Wexboy_Value] (LINK)

Disruption Is Not About Slaying Giants but about Serving New Customers (LINK)

Book review of Michael Shermer's latest, The Moral Arc: How Science and Reason Lead Humanity toward Truth, Justice, and Freedom (LINK)

Saturday, January 24, 2015

Charles Brandes quote

From Brandes on Value:
With each ebb and flow, Mr. Market entices investors with the “quick and the new,” leading them to believe that this time is very different, and that we’ve never seen the likes of this before. His pattern of tricks changes slightly each time, but usually only enough to mine the one constant: investor behavior. Why doesn’t investor behavior change? We like to think it would, especially when you look at all the lessons of past markets. Short-term thinking, however, is human nature—it’s in our DNA. It’s how we are wired. We tend to process decisions relatively quickly based on what we see in front of us at the moment, or on what we believe others may be seeing. Such irrational behavior is ages old and is based on primal instincts like fear—we are afraid of either getting hurt or missing out. Many years later, this behavioralism was recognized as a key feature of value investing.
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Related link: Charles Brandes' Q4 2014 Commentary

Friday, January 23, 2015

Links

For some good info on the current oil and gas industry and to learn about a decent business, check out the TGS-Nopec Capital Markets Day 2015 (LINK)

A Few Savvy Investors Had Swiss Central Bank Figured Out (LINK)

The Age of Unicorns (LINK)

The Difference Between A Joke And A Billion Dollar Company Isn’t As Big As You’d Think (LINK)

Book of the day: The Genome War: How Craig Venter Tried to Capture the Code of Life and Save the World

Thursday, January 22, 2015

Bill and Melinda Gates on Charlie Rose


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Related link: Bill and Melinda Gates' 2015 Annual Letter

Links

Wired talks to Bill Gates about his letter, and other things (LINK) [Gates had extremely high praise for the book On Immunity: An Inoculation.]

Bill Gates on Bloomberg TV (video) (LINK)

Lagarde, Cohn, Summers, Botin, Dalio on Bloomberg Panel (video) [H/T ValueWalk] (LINK)
International Monetary Fund Managing Director Christine Lagarde, former U.S. Treasury Secretary Lawrence Summers, Goldman Sachs Group Inc. President Gary D. Cohn, Banco Santander SA Chairman Ana Botin and Ray Dalio, who runs the investment firm Bridgewater Associates LP, speak on a Bloomberg Television debate on quantitative easing. Francine Lacqua moderates the session at the World Economic Forum's annual meeting in Davos, Switzerland. 
11th Annual Demographia International Housing Affordability Survey (LINK)

Google to Sell Wireless Service in Deals With Sprint, T-Mobile (LINK)

It’s not hard to close the cash-rich split-off loophole [H/T Linc] (LINK)

Philosophical Economics: Intrinsic Value: Interest Rates, Inflation, and the Forgotten Concept of the Time Value of Money (LINK)

Accounting For Long-Term Debt (LINK)

Hoisington Q4 2014 Letter (LINK)

William White interview from last month, discussing the Swiss Franc and the SNB [H/T Jon Shayne] (LINK)
Related previous post: Is Monetary Policy a Science? - The Interaction of Theory and Practice Over the Last 50 Years – by William R. White
Michael Pettis: Inverted balance sheets and doubling the financial bet (LINK)

Frilled shark caught off Australian coast (LINK)

Book of the day (I've heard a few people say this is their favorite Jim Grant book): Money of the Mind: How the 1980s Got That Way

Bill and Melinda Gates' 2015 Annual Letter

Link to: 2015 Gates Annual Letter
Forty years ago, Bill and his childhood friend Paul Allen bet that software and personal computers would change the way people around the world worked and played. This bet wasn't exactly a wager. It was an opportunity to make computers personal and empower people through the magic of software. Some people thought they were nuts. But the bet turned out well.
 
Fifteen years ago, the two of us made a similar bet. We started our foundation in 2000 with the idea that by backing innovative work in health and education, we could help dramatically reduce inequity. The progress we've seen so far is very exciting — so exciting that we are doubling down on the bet we made 15 years ago, and picking ambitious goals for what's possible 15 years from now.

Wednesday, January 21, 2015

Links

Tim Ferriss interviews Peter Diamandis (LINK)
Related book: Bold: How to Go Big, Create Wealth and Impact the World
Scott Adams: From Magic to Science (sort of) (LINK)
Related book: How to Fail at Almost Everything and Still Win Big (The MP3 CD is still priced low as well, currently at $8.19)
TED Talk - Matthieu Ricard: How to let altruism be your guide (LINK)
Related book: Happiness: A Guide to Developing Life's Most Important Skill
Paul Graham: The Ronco Principle (LINK)

The Hedge Fund Manager Who Nailed The Oil Crash Made $1 Billion From His Bet Against Oil (LINK)

Andrew Smithers: The political consequences of poor economics (LINK)

Venezuela’s economic collapse owes a debt to China (LINK)
It is hard to exaggerate the magnitude of the Venezuelan collapse. People are queueing for hours to buy food, stores are empty, and the country is in a deep recession. Venezuela has the fastest inflation in the world, while its government debt is the most expensive to insure against default. 
How did we get here? Venezuela used the period of high oil prices to quadruple its public foreign debt, in order to fuel a domestic spending boom. By 2012, when Venezuelan oil averaged $103, the country was spending as if the price was $194, running up a fiscal deficit of 17.5 per cent of gross domestic product. That is why the economy went into crisis in early 2014, when the oil price was still $100. The recent drop has just made a hopeless situation worse. Who gave the country the rope with which to hang itself? Mostly China. 
China started to lend massively to Venezuela in 2007. Since then it has lent more than $45bn, of which about $20bn is still outstanding. After a visit to Beijing on January 8, President Nicolás Maduro said he had won further “investment”. 
What makes China unusual is not just the amount it is willing to lend but the way it lends. First, Beijing has chosen to be opaque: we know neither the terms of the loans nor the uses of the money. The debt is repaid in oil, making Wall Street bondholders junior to China.