Monday, September 8, 2014


A mental model education (LINK)

Sanjay Bakshi: Why I Still Don’t Like MCX (LINK)

The Jack Ma Way (LINK)

In case you haven't bought your copy yet, Guy Spier's book officially comes out tomorrow (LINK)

Market Cap to GDP: The Buffett Valuation Indicator Update (LINK)

Chris Pavese on the Wall Street talking heads  (LINK)

John Mauldin: Europe Takes the QE Baton (LINK)

Hussman Weekly Market Comment: The Two Pillars of Full-Cycle Investing (LINK)
On any given trading day, only a fraction of 1% of total market capitalization changes hands, and the vast majority of that is high-frequency trading and portfolio reallocation between existing equity holders. Think about it – the only way for an investor to get out of stocks without someone else getting in is for the stock to be literally removed from the market. That source of net removal of stock is corporate repurchase activity, which recently hit a year-over-year pace of about $500 billion. That’s still less than 4% of total market cap in an entire year, and it’s a fairly good upper limit on the percentage of investors who will successfully get out of this bubble without the appearance of a miraculous multitude of greater fools at the very moment existing holders decide to sell. 
Notably, the heaviest repurchase activity is associated with market peaks – repurchases actually dwindle at market lows. As our friend Albert Edwards across the pond in England points out, corporate cash flow alone is not enough to finance buybacks and other corporate expenditures, so buybacks are instead typically funded primarily through debt issuance.
Last week, Investors Intelligence reported that the percentage of bearish advisors has dropped to a 27-year low of 13.3%, a level last seen in 1987 a few months prior to the market crash of that year.