Warren Buffett Speaks Candidly to Vanity Fair About Who Might Succeed Him at Berkshire Hathaway

Found via My Investing Notebook.

The future of Berkshire Hathaway is the subject of intense speculation throughout the financial world, for millions of investors and at the company itself. “It is all we talk about [at board meetings],” Warren Buffett tells Vanity Fair’s Bethany McLean, who spent 11 hours in Omaha with the octogenarian Berkshire Hathaway C.E.O. to discuss who might lead the company he founded when, as David Sokol, one of his executives, puts it, “the bus hits.” Buffett, who has no plans to retire, tells McLean that he “tap dances to work.” His partner and vice-chairman for more than 40 years, Charlie Munger (who, at 86, is not a contender) also speaks to McLean for a profile that provides an in-depth look at Warren Buffett’s thinking on succession as well as the possible choices. Buffett also talks to Vanity Fair about the evolution of his investment strategy, his trust in the wisdom of American capitalism, his “pragmatic” investment style, and belief in luck.

Didier Sornette’s Zurich Minds Talk: "Predicting Crisis and Triumph"

Link to: Didier Sornette’s Zurich Minds Talk

Leda Cosmides & John Tooby’s Zurich Minds Talk: "Evolutionary Psychology"

Link to: Leda Cosmides & John Tooby’s Talk

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Related previous post: Stone Age Minds: A conversation with evolutionary psychologists Leda Cosmides and John Tooby

Art De Vany's Zurich Minds Talk: "Evolutionary Fitness"

Link to: Art De Vany's Zurich Minds Talk

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Related previous posts:

Excerpt from The New Evolution Diet

The New Evolution Diet

Art De Vany’s Essay on Evolutionary Fitness

Art De Vany on EconTalk

Books:

The New Evolution Diet

Hollywood Economics

Dan Loeb's Q3 Letter

Better late than never, especially with a great quote like this:

"Our challenge is not only to keep up with rapidly unfolding events around the world, but to keep our perspective fresh and differentiated from that of our competitors. As securities analysts we are truth seekers and problem solvers. We must satisfy ourselves with determining ranges of outcomes and potential scenarios rather than searching for, and ultimately fabricating, absolute truths. The only thing we are 100% confident in is that we are fallible, we don't have all the answers, and we will make some mistakes. However, if we are honest with ourselves and our colleagues, remain attentive to our own biases and deceptions, focus on process, attempt to understand why we erred, and engage in deliberate practice and self-observation to improve our decision-making ability, we will not only minimize our errors, but also ultimately become better people and better investors."

Link to: Dan Loeb's Q3 Letter

Albert Edwards, SocGen bear, takes a bite out of China

Thanks to Jason for passing this along.

Analyst famous for his Ice Age thesis sees a new economic crisis on the way

Stock markets ended 2010 on an upbeat note. The FTSE 100 index reclaimed the 6000 mark before slipping back, but still registered a 9% gain, while the S&P 500, the most widely watched US index, has regained the level seen before the collapse of Lehman Brothers.

There is an air of optimism among investors and a confidence among economists that a much feared double-dip recession has been avoided. A tough moment, then, to be bearish?

Not for Albert Edwards, the best known and longest-standing bear in the City. He has seen nothing to dent his Ice Age thesis – the term he coined as long ago as 1996 to describe the relative decline of equities versus bonds. He thinks there may still be another Japanese-style economic "lost decade" to endure. "Big structural bear markets take 19 years on average and have four recessions," he says. "We've had two."

Edwards is thus sticking to two eye-catching predictions. Stock markets will revisit their March 2009 lows (3512 for the FTSE 100). And, despite the hints in recent months of a return of inflation, gilt yields will fall below 2% (from 3.5% today) as deflationary forces reassert themselves. Oh, and for good measure, prepare for the hard landing in China and the crash in commodity prices.

Amherst Mortgage Insight: “Facebook” Analysis of the Non-Agency Market—Participants Underestimating The Housing Problem

Found via naked capitalism.

Summary

In this article, we argue that the housing overhang is not caused solely by the number of non-performing loans that exist in the market. The problem also includes the high rates at which re-performing loans are re-defaulting, along with the relatively high rates at which deeply underwater loans that have never been delinquent are going 2 payments behind for the first time. As a laboratory for this analysis, we look at each loan in the non-Agency universe a year ago, and examine its current status.

GR-NEAM Reflections: 01/01/2011 - Hypothesis Testing

Thanks to Matt for passing this along.

Recent events suggest a better U.S. economy in coming months than we previously expected. But that only postpones the debt reckoning.

TED Talk - Barry Schwartz: Using our practical wisdom

Book: Practical Wisdom

Hussman Weekly Market Comment: Setup and Resolution

One of the striking features of the market here is the extent to which large-cap, high-quality has underperformed speculative sectors of the market, creating what we view as a multi-year "setup" in favor of high quality issues.

A few weeks ago, I noted the wide dispersion between staples and cyclicals, which is evident within the S&P 500 itself. Extremes in the relative valuation of these sectors have typically been followed by strong subsequent reversion in the opposite direction favoring the depressed sector. Moreover, even if we take the whole S&P 500 as relatively "high quality," we can observe yet higher levels of speculation in small-cap indices such as the Russell 2000, and high-beta indices such as the Nasdaq. The ratio of the S&P 500 to these more speculative indices has fallen to multi-year lows.

It's important for investors to realize that historically, such instances have typically been followed by poor relative performance in speculative stocks over the next several years, and corresponding outperformance of more stable issues.