M&A Funds: Sexy and Steady? The steady increase in M&A activity has many investors wondering how to take advantage of Wall Street’s deal making

SATURDAY, FEBRUARY 8, 2014

M&A Funds: Sexy and Steady

By AVI SALZMAN | MORE ARTICLES BY AUTHOR

The steady increase in M&A activity has many investors wondering how to take advantage of Wall Street’s deal making. These two funds do it well—but don’t be fooled by the wrapper. These are essentially income funds.

Arbitrage has a risky—even sexy—reputation. In the 2012 film Arbitrage, hedge-fund magnate Richard Gere seduces a mistress, flies on a private jet, and defrauds investors, all in a day’s work. Read more of this post

Why Vietnam is proud of Flappy Bird

Why Vietnam is proud of Flappy Bird

February 7, 2014

by Anh-Minh Do

Flappy Bird, the hottest app coming out of Asia (and possibly the world) at the moment, is from Vietnam. Today, in Vietnam’s startup and tech scene, Flappy Bird marks a major achievement. It’s a moment of pride and triumph for the fledgling community. It’s common to hear someone say “When you ask people about Vietnam, the first thing they remember is the war. I want Vietnam to be known for innovation. I want my product to break that mold and redefine what Vietnam is.” And against the most bizarre and lucky odds, Flappy Bird has done it. Flappy Bird is the most famous piece of Vietnamese software in the world right now. Read more of this post

Master of the Markets: Architect of Intercontinental Exchange, Sprecher conquered Wall Street and the world with a sprawlng empire of trading exchanges and clearing firms.

SATURDAY, FEBRUARY 8, 2014

Master of the Markets

By STEVEN M. SEARS | MORE ARTICLES BY AUTHOR

Architect of Intercontinental Exchange, Sprecher conquered Wall Street and the world with a sprawlng empire of trading exchanges and clearing firms.

If Jeffrey Sprecher had built something that captured the public’s imagination, he might be as famous today as Steve Jobs. Like Apple’s late, visionary leader, Sprecher revolutionized a major industry, creating great wealth in the process. But because derivatives exchanges like the Intercontinental Exchange, or ICE, which he founded and runs, fascinate few people outside of the financial markets, Sprecher is largely unknown beyond Wall Street. Indeed, he was unknown to many on Wall Street until ICE, which is based in Atlanta, bought NYSE Euronext, parent of the New York Stock Exchange, last year. Read more of this post

Nielsen has a near monopoly in measuring TV viewership — and a new growth plan; CEO Mitch Barns: “We have products that scale very well.”

SATURDAY, FEBRUARY 8, 2014

Nielsen’s Measured Approach

By LESLIE P. NORTON | MORE ARTICLES BY AUTHOR

Nielsen has a near monopoly in measuring TV viewership — and a new growth plan. Shares could rise 40%.

“Words are words, explanations are explanations, promises are promises, but only performance is reality,” the celebrated businessman Harold Geneen once said. That accounts for the enduring popularity of the Nielsen TV ratings system, the flagship product of Nielsen Holdings . Nielsen’s ratings, prized by advertisers, are why the Super Bowl can charge $8 million for a minute of commercials. Nielsen’s enviable client list is topped by customers who’ve used its services for more than 30 years. Read more of this post

Lessons Learned at Harvard: Slammed in the financial crisis, the university’s endowment has been tweaked, in part to add liquidity

SATURDAY, FEBRUARY 8, 2014

Lessons Learned at Harvard

By ANDREW BARY | MORE ARTICLES BY AUTHOR

Slammed in the financial crisis, the university’s endowment has been tweaked, in part to add liquidity.

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Jane Mendillo has one of the most prominent jobs in the investment world. As the CEO of Harvard Management, she oversees the $32.7 billion Harvard endowment, the largest university endowment in the country. Read more of this post

This Obscure Gas Improves Athletes’ Performance — And It’s Legal For Now

This Obscure Gas Improves Athletes’ Performance — And It’s Legal For Now

THE ECONOMIST

FEB. 7, 2014, 4:57 AM 4,190

XENON is one of the shyest members of the periodic table of the elements. Chemically, it is almost inert, and physically, it makes up only 0.000009% of the atmosphere, so it is not surprising that it was among the last of the naturally occurring elements to be identified, in 1898. Biologically, however, it is not shy at all. In some countries, notably Russia, it is used as an anaesthetic. It is also known to protect body tissues from the effects of low temperatures, lack of oxygen and even physical trauma. In particular, it increases levels of erythropoietin, also known as EPO, a hormone that encourages the formation of red blood cells. Read more of this post

The US Was An Emerging Market In This 209-Year-Old Chart

WILL ORTELINSIDE INVESTING
FEB. 7, 2014, 6:42 PM 2,728 4

It’s easy to forget that business and commerce have been around for a long time, in fact almost as long as civilization itself.

William Playfair—who among other things, invented the bar chart—published a book in 1805 which investigated the causes of decline and fall of wealthy nations. Read more of this post

How To Come Up With A Breakthrough Idea

How To Come Up With A Breakthrough Idea

GEOFFREY JAMESINC.
FEB. 7, 2014, 6:01 PM 1,359

You’re stuck. Really stuck.

Scenario 1: You’ve encountered a problem at work, but all your usual tactics can’t solve it. You sense you need a more creative approach, but your imagination isn’t delivering the goods. What now? Read more of this post

25 Horrible Things That Happen If You Don’t Get Enough Sleep

25 Horrible Things That Happen If You Don’t Get Enough Sleep

LAUREN F FRIEDMAN

FEB. 7, 2014, 12:24 PM 123,817 7

In our 24/7 culture, sleep loss is a major problem. Back in 1942, we averaged almost 8 hours of sleep a night — now that’s down to 6.8. (Seven to 9 hours per night are what’s generally recommended.)

Almost 40% of Americans get less than 7 hours of sleep a night, a recent Gallup poll found, and an estimated 70 million Americans have a sleep disorderRead more of this post

Bitcoin Implodes As The World’s Most Famous Exchange Halts All Withdrawals

Bitcoin Implodes As The World’s Most Famous Exchange Halts All Withdrawals
ROB WILE

FEB. 7, 2014, 9:11 AM 41,087 53

Mt. Gox, the Japan-based bitcoin exchange, was forced to halt all Bitcoin withdrawals this morning amid an “increase in withdrawal traffic.”

According to a memo on Mt. Gox’s website, “In order for our team to resolve the withdrawal issue it is necessary for a [temporary] pause on all withdrawal requests to obtain a clear technical view of the current processes. We apologize for the sudden short notice.” Read more of this post

A Walk-Thru The First Shadow Bank Run… 250 Year Ago

A Walk-Thru The First Shadow Bank Run… 250 Year Ago

Tyler Durden on 02/07/2014 15:23 -0500

Plain vanilla bank runs are as old as fractional reserve banking itself, and usually happen just before or during an economic and financial collapse, when all trust (i.e. credit) in counterparties disappears and it is every man, woman and child, and what meager savings they may have, for themselves. However, when it comes to shadow bank runs, which take place when institutions are so mismatched in interest, credit and/or maturity exposure that something just snaps as it did in the hours after the Lehman collapse, that due to the sheer size of their funding exposure that they promptly grind the system to a halt even before conventional banks can open their doors to the general public, the conventional wisdom is that this is a novel development (and one which is largely misunderstood). It isn’t. Read more of this post

Jeremy Grantham’s Investment Lessons Learned From “Mistakes Made Over 47 Years” – Chapter 1

Jeremy Grantham’s Investment Lessons Learned From “Mistakes Made Over 47 Years” – Chapter 1

Tyler Durden on 02/07/2014 18:01 -0500

From GMO’s Jeremy Grantham

Investment Lessons Learned: Mistakes Made Over 47 Years

Chapter 1 (the first of several future chapters)

When I was a teenager, my parents had their friends over on most Sundays for a drink. (Actually, it was a 1950’s version of “a few drinks.”) During these sessions I was impressed by the confident expressions of current and future success laid out by my stepfather’s closest friend. His firm was a manufacturer of scaffolding, a  patented easily-assembled variety, for which he was the main international salesman. After two or three years I could stand it no longer and at 16, because my parents did not invest in the market and for lack of a better idea, I arrived at a bank branch in a south London suburb with the bank book from my “home safe account,” which was designed for children’s savings and which I had had for as long as I could remember. Asking to see the branch manager, I surprised and amused him by asking for his help in investing everything in my account – £16. I remember the investment well: Acrow A shares. It was his first experience with investing for a home safe account but he could see no problem and without parental confirmation or any fuss at all did the trade. And so my first commission was paid out. And, by the way, £16 was a lot. I had been extremely frugal. (The exchange rate was 4:1 and $64 of buying power in 1954 translates to about $560 today.) Read more of this post

Presenting China’s Largest Shadow Bank

Presenting China’s Largest Shadow Bank

Tyler Durden on 02/07/2014 18:35 -0500

Submitted by Nicholas Borst via The Peterson Institute blog,

Shadow banks in China come in a variety of forms and guises. The term is applied to everything from trust companies and wealth management products to pawnshops and underground lenders. What surprising is that China’s biggest shadow bank is actually a creation of the central government and receives billions in financing directly from the banks.  Even more interesting, this shadow bank recently pulled off a successful international IPO where it raised billions of dollars. Read more of this post

4th Financial Services Executive Found Dead; “From Self-Inflicted Nail-Gun Wounds”

4th Financial Services Executive Found Dead; “From Self-Inflicted Nail-Gun Wounds”

Tyler Durden on 02/07/2014 17:02 -0500

The ugly rash of financial services executive suicides appears to have spread once again. Following the jumping deaths of 2 London bankers and a former-Fed economist in the USThe Denver Post reports Richard Talley, founder and CEO of American Title, was found dead in his home from self-inflicted wounds – from a nail-gun. Talley’s company was under investigation from insurance regulators.  Read more of this post

Companies take pre-packaged news to another level; Rather than simply sending out a press release, big companies are putting together websites, complete with video interviews, slideshows and “asset packs” of relevant documents

Last updated: February 7, 2014 11:22 pm

Companies take pre-packaged news to another level

By Brooke Masters

Treat the corporate trend with the same scepticism as for political ads

This week saw an escalation of the new corporate trend toward pre-packaging the news. Rather than simply sending out a press release, big companies are putting together websites, complete with video interviews, slideshows and “asset packs” of relevant documents ahead of big announcements. Read more of this post

Investor Sentiment Aligned: A Powerful Predictor of Stock Returns

Investor Sentiment Aligned: A Powerful Predictor of Stock Returns

Dashan Huang 

Singapore Management University – Lee Kong Chian School of Business

Fuwei Jiang 

Singapore Management University – Lee Kong Chian School of Business

Jun Tu 

Singapore Management University – Lee Kong Chian School of Business

Guofu Zhou 

Washington University in St. Louis – Olin School of Business
September 15, 2013

Abstract: 
The widely used Baker and Wurgler (2006) sentiment index is likely to understate the predictive power of investor sentiment because their index is based on the first principal component of six sentiment proxies that may have a common noise component. In this paper, we propose a new sentiment index that is aligned for explaining stock expected returns by eliminating the noise component. We find that the aligned sentiment index has much greater power in predicting the aggregate stock market than the Baker and Wurgler (2006) index: it increases the R-squares by more than five times both in-sample and out-of-sample, and outperforms any of the well recognized macroeconomic variables. Its predictability is both statistically and economically significant. Moreover, the new index improves substantially the forecasting power for the cross-section of stock returns formed on industry, size, value, and momentum. Economically, the driving force of the predictive power of investor sentiment appears stemming from market underreaction to cash flow information.

 

The tenacious mavericks who stick with their inventions

February 6, 2014 5:55 pm

The tenacious mavericks who stick with their inventions

By Andrew Bounds

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Dogged: Craig Milnes and his team have set themselves the goal of creating the perfect sound

What links a loudspeaker costing £65,000 and a supercar? The answer is a technology developed for audiophiles by a British company, which has been adopted in other sectors. Read more of this post

Shale: miracle, revolution or bandwagon?

February 7, 2014 1:27 pm

Shale: miracle, revolution or bandwagon?

By Terry Smith

Investors are far from certain to make money from shale

Unless you have been in hibernation for the past few years you will have heard that there is a shale hydrocarbon “revolution” or “miracle” under way. Barack Obama, the US president, pledged support for shale gas development in his 2012 State of the Union speech. David Cameron has urged opponents of fracking to “get on board”. Read more of this post

Winners and losers in the new China; Traditional state-backed industries are yesterday’s story

February 7, 2014 6:21 pm

Winners and losers in the new China

By Rafael Halpin

“It will be very painful and even feel like cutting one’s wrist.” So predicted Li Keqiang, China’s premier, as he discussed the task ahead of him during his first press conference last March.

Not the most inviting prospect for investors looking to make a play on China. But they should certainly take heed of these words. Li is the man who, together with president Xi Jinping, must lead a reform programme regarded by analysts as the most fundamental in decades. It will affect almost every part of an economy worth $9.4tn (Britain’s annual output, for comparison, is $2.4tn). Read more of this post

CVS chief shakes up business model of US pharmacies

February 7, 2014 4:48 pm

CVS chief shakes up business model of US pharmacies

By Anjli Raval and Shannon Bond in New York

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Chief executive of CVS Caremark Larry Merlo

For Larry Merlo the decision to stop selling cigarettes at US pharmacy chain CVS Caremark was not just about business. “My father was a smoker and died of cancer at the young age of 57,” said the former pharmacist, who rose through the ranks to become chief executive of the company. Read more of this post

Entering the Era of Private and Semi-Anonymous Apps

FEBRUARY 7, 2014, 12:00 PM

Entering the Era of Private and Semi-Anonymous Apps

By NICK BILTON

Today’s Web-enabled gadgets should come with a digital Miranda warning. “Anything you say or do online, from a status update to a selfie, can and will be used as evidence against you on the Internet.” Read more of this post

AO.com founder John Roberts’ rise began with pub bet

February 7, 2014 11:27 pm

AO.com founder John Roberts’ rise began with pub bet

By Duncan Robinson

John Roberts founded AO.com, the online electricals retailer, after a bet in a pub.

Fed up with his job as head salesman at the now defunct Moben Kitchens, the then 26-year-old moaned to a friend about wanting to set up his own business. The friend bet him £1 he would not do it. Read more of this post

Satya Nadella, Microsoft’s engineer chief: The cerebral new chief is charged with reviving the faltering tech group

February 7, 2014 7:10 pm

Satya Nadella, Microsoft’s engineer chief

By Richard Waters

The cerebral new chief is charged with reviving the faltering tech group, writes Richard Waters

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Talk to almost anyone who knows Satya Nadella

, the new boss of Microsoft, and sooner or later they will come up with the same observation: he is the anti-Steve Ballmer.

The man who has stepped aside after 14 years as head of the world’s biggest software company has always exuded an overabundance of energy, running the gamut from ebullience (jumping sweatily around a stage to inspire an audience) to temper tantrum (throwing a chair across the room when a lieutenant quits). Read more of this post

Communist Vietnam gets first taste of the Big Mac

Communist Vietnam gets first taste of the Big Mac

Saturday, February 8, 2014 – 15:40

AFP

HO CHI MINH CITY – Four decades after the Vietnam war ended, US fast-food giant McDonald’s opened its first restaurant in the communist country Saturday, aiming to lure a rising middle class away from rice and noodles. Read more of this post

Welcome to Bakersfield, California: How an ordinary town became one of the home foreclosure capitals of America

February 7, 2014 12:28 pm

Welcome to Bakersfield, California

By Gary Silverman

How an ordinary town became one of the home foreclosure capitals of America

“You don’t know me but you don’t like me,
You say you care less how I feel.
How many of you that sit and judge me
Ever walked the streets of Bakersfield?”

Homer Joy, “Streets of Bakersfield”

On the spring day in 1988 when he turned 41, Carl Cole left the small town in North Carolina where he had grown up as a boy and fallen into disgrace as a man. With his wife and their two sons he headed out west, to Bakersfield, California, and prayed for something better. A Christian, Cole had seen miracles with his own eyes – believers speaking in tongues, the sick healed by faith alone – and he clung to the words of scripture promising that “all things work together for good to them that love God”. Read more of this post

Einstein reshaped how we understand space and time, energy and matter. But he scoffed at notions, like the big bang and black holes, that followed from his insights

Book Review: ‘The Perfect Theory’ by Pedro G. Ferreira

Einstein reshaped how we understand space and time, energy and matter. But he scoffed at notions, like the big bang and black holes, that followed from his insights.

SAM KEAN

Feb. 7, 2014 5:36 p.m. ET

What did Albert Einstein win the Nobel Prize for? Hearty congratulations if you said the photoelectric effect. Most people assume he won for his theory of general relativity, and for good reason. In a sweeping unification of several disparate fields, his theory showed that space and time formed a single intertwined continuum and that this “spacetime” could be warped and curved by matter. Scientifically, relativity stands as Einstein’s most enduring achievement, and its power, flexibility and universal scope remain unmatched. It swept away centuries of metaphysical baggage, bringing a clean, modern worldview into being. Read more of this post

Sorry, Writers, but I’m Siding With Google’s Robots; Copyright laws too often stifle the creativity they claim to protect. Time for a 21st-century update

Sorry, Writers, but I’m Siding With Google’s RobotsSorry, Writers, but I’m Siding With Google’s Robots

Copyright laws too often stifle the creativity they claim to protect. Time for a 21st-century update.

JAMES PANERO

Feb. 7, 2014 6:23 p.m. ET

How much did mention of “copyright” increase in American books published in the second half of the 20th century? The answer is by nearly a factor of three. How about “intellectual property,” a neologism designed to equate copyright with real property? By a whopping factor of 70. But what about “public domain,” the term for our creative commons where the arts are replanted and renewed? The answer is almost not at all. Read more of this post

Chanos’s Kynikos Opportunity Fund Lost 14% in 2013

Chanos’s Kynikos Opportunity Fund Lost 14% in 2013

Fund Posts Largest Decline in at Least a Decade

ROB COPELAND

Updated Feb. 7, 2014 7:11 p.m. ET

A boom year for many global markets produced losses for one famously pessimistic hedge-fund manager.

James Chanos’s Kynikos Opportunity Fund fell 14% last year, the largest decline in at least a decade, according to a document detailing fund performance. That was the second consecutive year of losses for that fund, which dropped less than 1% in 2012. Read more of this post

If you want to go shopping in a minefield, make sure you are wearing enough armor. Most emerging-market investors, it seems, aren’t.

Feb. 7, 2014, 7:02 p.m. EST

How to Invest in Emerging Markets Now

By Joe Light , The Wall Street Journal

If you want to go shopping in a minefield, make sure you are wearing enough armor.

Most emerging-market investors, it seems, aren’t.

Emerging-market mutual funds and their exchange-traded cousins have been hit with $18 billion in withdrawals this year, according to Bank of America Merrill Lynch and EPFR Global. Read more of this post

Americans are addicted to advice: We honestly believe that someone out there knows how to fix all our problems. Joe Queenan asks: So why are we still so screwed up?

A Word of Advice … on Advice

Americans are addicted to advice. Joe Queenan asks: So why are we still so screwed up?

JOE QUEENAN

Feb. 7, 2014 6:27 p.m. ET

A few weeks ago, a neighbor I like very much came over for coffee. While inspecting the vast record and compact disc collection that takes up a large part of my living room, he suggested that I load all my CDs onto a server to clear away the clutter. He also said that I should convert my LPs to MP3 files and get wireless speakers installed in every room. I said thanks, those are really great suggestions. But I am never going to do any of this stuff. Read more of this post

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