Buffett’s favorite market tool is flashing red

Buffett’s favorite market tool is flashing red

This little-known valuation metric has entered familiar territory. Here’s why investors should share the Oracle of Omaha’s concerns — and how they can protect themselves.

By David Sterman

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In the go-go days of 1999, Warren Buffett grew very concerned. Not because his value style of investing had grown unpopular, but because investors were becoming delusional in their zeal for further gains. In a speech he made to friends, as recounted in a 1999 article in Fortune magazine (that was published just a few months before the market peaked and then plunged), Buffett warned that “once you reach the point where everybody has made money no matter what system he or she followed, a crowd is attracted into the game that is responding not to interest rates and profits but simply to the fact that it seems a mistake to be out of stocks.” A simple test of how much stocks were loved: The aggregate value of the largest 5,000 U.S. companies (as measured by the Wilshire 5000) exceeded the GNP of the U.S. economy. In fact, a market melt-up took this ratio up to 150% by early 2000 (meaning the Wilshire 5000 was 50% larger than the U.S. economy), which set the stage for one of the most painful corrections ever for investors. Read more of this post

The rules of innovation can be flexible; For almost every insight, there is an opposite approach

November 11, 2013 3:44 pm

The rules of innovation can be flexible

By Andrew Hill

For almost every insight, there is an opposite approach

If a destination’s desirability is measured by the number of maps that claim to lead you to it, innovation is the corporate world’s Taj Mahal. Among the manuals on sale is an Innovator’s Guide, a Cookbook, a Toolkit, a Path, a Way, a Handbook and a Manifesto. My addition to the genre would be The Innovator’s Contradictions. Insights gleaned from last week’s FT Innovate conference suggest that, for almost every rule of innovation, there is an innovator who has made a breakthrough – and a fortune – flouting it. Here are seven examples. Read more of this post

‘Invisible’ Bike Helmets Are A Real Thing Now

‘Invisible’ Bike Helmets Are A Real Thing Now

THEJOURNAL.IE NOV. 11, 2013, 6:00 PM 15,669 10

Are you a cyclist who is also concerned about how you look while cycling around town? If so, then two Swedish industrial design students have solved your problem and have created an “invisible helmet” for cyclists. Bike helmets are a very important safety feature, especially for those who cycle around a busy city where both drivers and pedestrians can be a problem. But there is no denying that it can be difficult to find a stylish bike helmet and then there is the issue of the helmet hair. The idea for the invisible helmet came to life in 2005 as part of a Masters’ thesis, when Anna Haupt and Terese Alstin were studying industrial design at the University of Lund.The Hövding (invisible helmet) is actually an air bag, which uses a helium gas cylinder to inflate when its sensors detect a sudden jolt. The helmets are also CE labelled, which means they comply with EU safety standards and have undergone a variety of safety tests.

Machiavelli: A Renaissance Life; The often-vilified Renaissance politico and author of The Prince comes to life as a diabolically clever, yet mild mannered and conscientious civil servant

Machiavelli: A Renaissance Life Paperback

by Joseph Markulin  (Author)

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The often-vilified Renaissance politico and author of The Prince comes to life as a diabolically clever, yet mild mannered and conscientious civil servant. Author Joseph Markulin presents Machiavelli’s life as a true adventure story, replete with violence, treachery, heroism, betrayal, sex, bad popes, noble outlaws, deformed kings, menacing Turks, even more menacing Lutherans, unscrupulous astrologers, untrustworthy dentists—and, of course, forbidden love. While sharing the stage with Florence’s Medici family, the nefarious and perhaps incestuous Borgias, the artists Leonardo da Vinci and Michelangelo, and the doomed prophet Savonarola, Machiavelli is imprisoned, tortured, and ultimately abandoned. Nevertheless, he remains the sworn enemy of tyranny and a tireless champion of freedom and the republican form of government. Out of the cesspool that was Florentine Renaissance politics, only one name is still uttered today—that of Niccolo Machiavelli. This mesmerizing, vividly told story will show you why his fame endures. Read more of this post

A novelistic biography makes Machiavelli into a Renaissance Zelig. He cracks Leonardo’s code! He listens to Michelangelo kvetch!

Book Review: ‘Machiavelli’ by Joseph Markulin

A novelistic biography makes Machiavelli into a Renaissance Zelig. He cracks Leonardo’s code! He listens to Michelangelo kvetch!

DAVID POLANSKY

Nov. 11, 2013 6:50 p.m. ET

The life of a great thinker presents unique challenges to a would-be biographer. Actions and events are the stuff of biographies, yet thoughts, not deeds, are what chiefly make the thinker of interest to us. As Heidegger reportedly said of Aristotle: “He lived, he wrote, he died.” Niccolò Machiavelli is that rare exception. To paraphrase “The Princess Bride,” his story gives us fighting, torture, poison, revenge, bad men, good men, conspiracies and miracles. All of which is to say that Machiavelli is more suited than most great thinkers for the novelistic treatment he receives in Joseph Markulin’s “Machiavelli: A Renaissance Life.” That this format is less successful than Sebastian de Grazia’s similarly idiosyncratic biography, “Machiavelli in Hell” (1989), is largely due to Mr. Markulin’s inability to manifest the great man’s ideas—to which all the dramatic episodes are secondary. Read more of this post

Black gold: A hundred years after the first excavations, the asphalt pools at Rancho La Brea, in Los Angeles, are still filling in details of life in the Pleistocene

Black gold: A hundred years after the first excavations, the asphalt pools at Rancho La Brea, in Los Angeles, are still filling in details of life in the Pleistocene

Nov 9th 2013 | Los Angeles |From the print edition

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TO A parched mammoth or giant sloth, they must have looked heaven-sent: mirror pools of water waiting to slake a thirst. Heaven, however, was not their progenitor, for the pools were traps. Below their siren surfaces lay not mud, but tar. For thousands of years they lured thirsty animals, and also hungry ones—carnivores attracted by the calls of those already stuck—to their doom. Read more of this post

Foreigners Share What They Find Most Surprising About America

Foreigners Share What They Find Most Surprising About America

MADELINE STONE NOV. 11, 2013, 3:12 PM 20,435 31

The U.S. has historically had a huge immigrant population. But what makes American culture different from the countries immigrants are leaving? Foreigners, as well as others who happen to know people who are new to the U.S., have been using this Quora thread to share what they think makes America unique. Their answers to the question “What facts about the United States do foreigners not believe until they come to America?” were pretty fascinating. We’ve picked out some especially interesting tidbits.  Read more of this post

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