Friday, June 29, 2012

Joel Greenblatt quote (valuation)

“…generally, if you have done good valuation work, 98 percent of the time, two or three years is enough time for the market to agree with you. That is a very powerful concept. It gives you patience. Of course, if you do poor valuation work, you can get into trouble. But if you stick to things you understand well, do good valuation work, give yourself a wide margin of safety, and have confidence in your work, eventually, you will end up doing quite well.” –Joel Greenblatt (as quoted in the book Hedge Fund Market Wizards)

Steve Keen Presentation on Canada's Debt Bubble

Keen’s description:
“Below is the talk I gave to the Canadian Centre for Policy Alternatives on the Debt Bubble and its implications for Canada. I cover my Minskian analysis of the Depression in general, and conclude with data on the Canadian economy. The mortgage acceleration data in particular implies that the Canadian house price bubble–which is not as big as those in Australia, the USA or the UK–is close to being over.”


GR-NEAM Reflections: 07/01/2012 - Long Journey, Map Provided

Paulson Forgoes Prognostication As Greatest Trade Sequel Flops

Thursday, June 28, 2012

Steve Keen on the Keiser Report

Keen comes in around the 13 minute mark.


Marc Andreessen on Charlie Rose

A Con Man Who Lives Between Truth and Fiction - By Andrew Ross Sorkin


Manual of Ideas Interview Excerpts with Brian Bares and Pat Dorsey




Related books:

The Small-Cap Advantage

The Little Book That Builds Wealth

Harvard Paper - Oil: The Next Revolution

Found via Canadian Value Investing.

Are Individual Investors Fleeing Stocks? Nope – By Jason Zweig

A new report from Vanguard Group casts some doubt on the meme that retail investors have been fleeing stocks like rats from a sinking ship.

Japan’s Economy in 2012: Multiple Challenges - By Vaclav Smil

“Adding insult to injury” sounds like a lawyerly phrase compared to its painfully evocative Japanese equivalent 泣面に蜂 nakitsura ni hachi -- literally “a bee to a crying face”. But even that stinging proverb fails to convey what Japan has been through during the recent past. In March 2011 its economy, slowly recovering from the worst global post-World War II downturn, was hit by a powerful earthquake followed by a massive tsunami. That twin disaster disrupted many supply chains of Japan’s important manufacturing sector and caused a catastrophic failure of the Fukushima nuclear power plant; the ensuing fears led to the eventual shut-down of all of the country’s nuclear generating stations, limited electricity supply, increased imports of fossil energies and the first annual foreign trade deficit in a generation.

Warren Buffett to Fired CEO: Boat Party Didn't Sink You

Thanks to Will for passing this along. [Update: The letter is posted HERE.]

Bill Gross – July 2012 Investment Outlook: What’s In A Name?

Not only banks and insurance companies but sovereign nations as well cannot all be counted on to guarantee a return of principal, let alone a return on investment.

Warren Buffett & Jon Bon Jovi: A Ukulele Duet For Charity

Found via the Corner of Berkshire & Fairfax.


JPMorgan Trading Loss May Reach $9 Billion

Wednesday, June 27, 2012

Jim Chanos and Kynikos: idea generation starts with partners, not analysts

From the book The Alpha Masters:

“Chanos thinks pattern recognition is important and something that simply takes experience, which is one reason why he tasks the firm’s partners with originating the ideas. The partners have extensive experience in seeing patterns in odd-looking financial or press statements, for example. Through their mosaic of experience and wisdom, they are in the strongest position to decide what strategies to explore and not get distracted by the markets’ daily vagaries. Once a partner identifies an idea to pursue, the analysts process the idea, compiling the research to validate or disprove the thesis.”

Competing With Amazon on Amazon

Stockton, CA files for bankruptcy

Jim Chanos’ VALUEx Vail Presentation on Value Traps

Found via ValueWalk.

98208144 VALUExVail 2012 James Chanos

Tuesday, June 26, 2012

Joel Greenblatt quote (thinking about the market)

“I think the difference between those who succeed and those that fail is how they think about the market. Everyone is bombarded every day with price movements, explanations for those price movements, macro events, and lots of other information. You need a methodology to cut through all that information and see things as they are.” –Joel Greenblatt (as quoted in the book Hedge Fund Market Wizards)

The False Allure of Group Selection - By Steven Pinker

I am often asked whether I agree with the new group selectionists, and the questioners are always surprised when I say I do not. After all, group selection sounds like a reasonable extension of evolutionary theory and a plausible explanation of the social nature of humans. Also, the group selectionists tend to declare victory, and write as if their theory has already superseded a narrow, reductionist dogma that selection acts only at the level of genes. In this essay, I'll explain why I think that this reasonableness is an illusion. The more carefully you think about group selection, the less sense it makes, and the more poorly it fits the facts of human psychology and history.


Art De Vany also thought it was a great article, and gave a few thoughts and passages on it in a public post on his site:
Unconditional self-sacrifice for a group does not exist, nor could it have evolved. Yet, self-sacrifice and appeals to altruism or fairness are the primary themes of our present political debate. Group selection cannot explain fairness as a basis for human society and self-sacrifice.
Consider Pinker's discussion of individual sacrifice. It is manipulation of one member of the group by others. And it relies on a false or manipulated conception of a group of "us" versus "those".
"What about the ultimate in individual sacrifice, suicide attacks? Military history would have unfolded very differently if this was a readily available tactic, and studies of contemporary suicide terrorists have shown that special circumstances have to be engineered to entice men into it. Scott Atran, Larry Sugiyama, Valerie Hudson, Jessica Stern, and Bradley Thayer have documented that suicide terrorists are generally recruited from the ranks of men with poor reproductive prospects, and they are attracted and egged on by some combination of peer pressure, kinship illusions, material and reputational incentives to blood relatives, and indoctrination into the theory of eternal rewards in an afterlife (the proverbial seventy-two virgins).[19] These manipulations are necessary to overcome a strong inclination not to commit suicide for the benefit of the group."
Then, to conclude, consider Pinker's discussion of how powerful individuals use compensation, coercion and indoctrination in group-against-group competition, which perfectly describes the present political strategy of incentivizing and manipulating groups used by our politicians.
"The historical importance of compensation, coercion, and indoctrination in group-against-group competition should not come as a surprise, because the very idea that group combat selects for individual altruism deserves a closer look. Wilson's dictum that groups of altruistic individuals beat groups of selfish individuals is true only if one classifies slaves, serfs, conscripts, and mercenaries as "altruistic." It's more accurate to say that groups of individuals that are organized beat groups of selfish individuals. And effective organization for group conflict is more likely to consist of more powerful individuals incentivizing and manipulating the rest of their groups than of spontaneous individual self-sacrifice."

Sir Mervyn King issues gloomy financial forecast

Jeremy Grantham: US Stocks are Expensive and Bonds are Disgusting

Monday, June 25, 2012

Not-So-Crazy in Tehran – By Nicholas Kristof

I highly recommend the video that accompanies this article.

Nigel Farage on King World News

Joel Greenblatt quote (6% minimum return)

“I always assume that my minimum bogie is at least a 6 percent return, even if interest rates are near zero, as they are now. Moreover, I have to beat 6 percent by a measurable amount because the assumption is that the 6 percent is risk-free. So I wouldn’t take 8 percent, unless I have high confidence that it will grow over time. I need a “margin of safety,” as Graham would say. I compare normalized earnings to the risk-free rate or 6 percent, whichever is higher.” –Joel Greenblatt (as quoted in the book Hedge Fund Market Wizards)

Bank for International Settlements' 82nd Annual Report: 1 April 2011– 31 March 2012

Some light reading…

Reith Lecture: 'We’re mortgaging the future of the younger generation' – By Niall Ferguson

Simoleon Sense Episode 5: A Conversation with Global Value Investor Jeffrey Towson

John Mauldin: Daddy's Home

Hussman Weekly Market Comment: Enter, the Blindside Recession

Bloomberg Interview with George Soros (video)


Related article: How to shift Germany out of ‘can’t do’ mode

Friday, June 22, 2012

Dr. Michael J. Burry at UCLA Economics Commencement 2012

Found via csinvesting.



UPDATE: Michael Burry released a transcript of the speech HERE.

Joel Greenblatt quote

“Value investing doesn’t always work. The market doesn’t always agree with you. Over time, value is roughly the way the market prices stocks, but over the short term, which sometimes can be as long as two or three years, there are periods when it doesn’t work. And that is a very good thing. The fact that our value approach doesn’t work over periods of time is precisely the reason why it continues to work over the long term.” –Joel Greenblatt (as quoted in the book Hedge Fund Market Wizards)

60 Minutes: Hank Crumpton: Life as a spy



Related link: Hank Crumpton on Charlie Rose (June 11, 2012)

Related book: The Art of Intelligence: Lessons from a Life in the CIA's Clandestine Service

Authors@ Jonah Lehrer on The Science of Creativity

Found via Farnam Street.



Thursday, June 21, 2012

Matthew McLennan on CNBC


Nassim Taleb’s May 30th Interview

Found via @farnamstreet.

Risk Takers: Meredith Whitney (Bloomberg TV)

June 21 (Bloomberg) -- An in-depth profile of one of Wall Street's most controversial and respected financial analysts.

Chanticleer Holdings, Inc.

As some readers have noticed, Chanticleer Holdings (my employer) had an S-1 outstanding to raise capital to pursue some of the things we have on the table. Some have also noticed the connection between this and our response to an interview question we gave last year to the publication The Manual of Ideas, which is pasted below:
MOI: As a publicly traded company, Chanticleer Holdings is on the radar screen of many value investors. However, the company’s small size makes it difficult to get involved in a meaningful way. Have you considered raising additional equity within Holdings, or are you focused primarily on expanding the assets managed by your Advisors subsidiary?
Chanticleer: We think about this quite a bit and have raised a little additional equity along the way. We can’t get into too many details being that we are public, but we’d be willing to raise more equity if we can find the right things to put that equity into. In 2008 we actually had an opportunity to acquire two Hooters franchisees that was disrupted by the financial crisis. We are always looking and, as one might imagine, some new opportunities have come up with the name recognition that came with having our name attached to the Hooters of America deal. But as for specifics, we can’t really go into much more.
I’m pleased to announce that the raise has been completed. For those that have been following Chanticleer, the ticker symbol for the units is HOTRU. The units will eventually split and the stock and warrants will trade separately. The new ticker symbol for the stock by itself is HOTR. Mike Pruitt, Chanticleer’s CEO, will be ringing the closing bell at the Nasdaq on Tuesday of next week, along with a few special guests. A full press release announcing the offering is available HERE. The prospectus is available HERE.

Disclosure: This post is for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation for any security, nor does it constitute an offer to provide investment advisory or other services by Chanticleer Investment Partners ("CIP") or any other entities related to or owned by Chanticleer Holdings, Inc.

Tom Russo Barron's Interview

Steven Romick on CNBC


Howard Marks Memo: It’s All a Big Mistake

Wednesday, June 20, 2012

Joel Greenblatt quote

“The power of value investing flies in the face of anything taught in academics. Value is the way stocks are eventually priced. It requires the perspective of patience because the market will eventually gravitate toward value.” –Joel Greenblatt (as quoted in the book Hedge Fund Market Wizards)

Fracking: How It Works, Where It’s Done

Julian Robertson on Bloomberg (video)

Interview with Howard Marks – by David Merkel

Found via ValueWalk.


The Truth Wears Off – By Jonah Lehrer

This article was mentioned in the book The Creative Destruction of Medicine. The book also mentioned the article “Why Most Published Research Findings Are False”, which Peter Bevelin brought up in my 2009 interview with him.

Tuesday, June 19, 2012

Jim Chanos quote

From the Graham and Doddsville Newsletter - Spring 2012, in response to a question about mistakes analysts make:

“One of the biggest things I see quite often is getting too close to management. We never meet with management. For all of the bad asymmetries of being on the short side, one of the good asymmetries is that we don’t rely on the company. We can get information from the company if we want to, as we can go through the sellside. Those that are long the stock and are close to the company almost never hear the negative side in any detail. The biggest mistake people make is to be co-opted by management. The CFO will always have an answer for you as to why a certain number that looks odd really is normal, and why some development that looks negative is actually positive.” –Jim Chanos

Hedge Fund Manager James Chanos on His Big Short Position in China

Excerpt from the book The Alpha Masters (the Ray Dalio chapter of that book is also available HERE).

David Weidner: So long, suckers — I’m leaving Wall Street

After covering the tobacco industry for three years in North Carolina, I moved to New York in 1997 to cover a really dirty business: Wall Street.

Forget Edison: This is How History's Greatest Inventions Really Happened

Found via @farnamstreet.


Business Insider: Mary Meeker's Latest Stunning Presentation About The State Of The Web

Thanks to Shai for passing this along.

Meredith Whitney on Bloomberg (video)

Do not put your faith in the false deities of economists

Found via The Big Picture.

"Why Nations Fail: The Origins of Power, Prosperity and Poverty" -- Daron Acemoglu

Found via csinvesting.



Book: Why Nations Fail: The Origins of Power, Prosperity, and Poverty

Monday, June 18, 2012

Small Banks Put Up 'For Sale' Sign

Thanks to Will for passing this along.

Howard Marks on CNBC


Welling on Wall St. Interview with Bob Rodriguez

Found via the Corner of Berkshire and Fairfax.


Related previous posts:

Hussman Weekly Market Comment: A Brief Primer on the European Crisis

So the idea of a quick fix through ECB printing is an illusion - that solution would still effectively represent a massive fiscal transfer from other European countries, because the creation of new euros would otherwise be able to fund new spending within the Euro zone. Massive, permanent money creation might "save the euro" in its present form, but would also wreck the euro in substance through inflation and depreciation. The political decision is whether the people of Germany and stronger European countries want the euro enough to make permanent fiscal transfers (or permanent currency creation that amounts to the same thing) to peripheral European countries. The real fate of the euro rests with that political decision, not with central banks, and the final decision on that matter will not come without extreme disruption in any event. Maintaining the Euro will require European governments to cede their fiscal sovereignty to a central authority, and that will not be easy unless major disruptions make that choice better than the alternatives. Departing from the Euro would best be done in sequence from stronger-to-weaker (which would free the remaining countries to agree on whatever depreciation and inflation rate they choose), rather than weaker countries first, but any breakup path would be disruptive as well. The realistic perspective here is to accept the likelihood of significant and continuing disruptions from Europe, and to accept various investment risks within that context.

Share Repurchase from All Angles: Assessing Buybacks, No Matter Where You Sit - By Michael Mauboussin

John Mauldin: The Bang! Moment is Here

We know that money is simply flying out of Greek banks. A number of them are clearly insolvent, yet they are meeting demands for withdrawals. Where is the cash coming from? The answer is in the form of yet another acronym from Europe, called the ELA. Is there a limit to this largesse? And politicians are becoming rather snarky (short-tempered, critical, testy, irritable, freaked-out – you fill in the word) with each other. This is what happens when crisis-weary politicians face yet another Greek tragedy, but this time perhaps it will hit even closer to home. Is there anyone left anywhere who has not grown tired of reading about Greece? I am tired of writing about them, yet if we are to understand the sturm und drang, the storm and stress, of Europe, we must begin there. Because, unlike Las Vegas, what happens in Greece most definitely does not stay in Greece.

Sunday, June 17, 2012

Nassim Taleb quote (forecast error example)

“While forecast errors have always been entertaining, commodity prices have been a great trap for suckers. Consider this 1970 forecast by U.S. officials (signed by the U.S. Secretaries of the Treasury, State, Interior, and Defense): “the standard price of foreign crude oil by 1980 may well decline and will in any event not experience a substantial increase.” Oil prices went up tenfold by 1980. I just wonder if current forecasters lack in intellectual curiosity or if they are intentionally ignoring forecast errors.” –Nassim Taleb, The Black Swan

Thursday, June 14, 2012

Can We Reverse The Stanford Prison Experiment?

Thanks to Andrew for passing this along.

Felix Zulauf's Market Prognosis - June 2012

Found via Zero Hedge.

Martin Capital Management Launches First Fund


Related previous posts:

I Cannot Leave the Truth Unknown - By Frank Martin 

Martin Capital Management - 2011 Annual Report

Satyajit Das: Why Germany can't bail out Europe