On Value Traps

06 Jun

On Value Traps

David Merkel

One thing that floors me regarding my readers, is who reads me.  I have many professional readers who read me regularly, and I thank you for doing so.  Tonight’s piece stems from an e-mail from one of my professional readers:

Hi David,

Big compliments for your blog, it’s probably the best on the net and one of the very few I am reading these days. I really like your overall approach to investing and I am using some of your methods myself with success in my ZZZ Fund (ZZZ on Bloomberg) like having an even-weighted portfolio of 30-40 stocks with regular rebalancing or focusing on the strongest players in weak industries (southern European banks anyone?). Read more of this post

Value Traps: Look Past Surface To Identify True Value

Value Traps: Look Past Surface To Identify True Value

by Mark MelinJune 19, 2014, 11:40 am

Morningstar pannel advises to avoid Chinese banks and other companies that look like values but aren’t, rather look for strong management in battered down geographic regions or market sectors exposed to long term growth trends

In finding value in today’s market environment, three professional investors shared a common theme: don’t let where the company is domiciled taint your view. This was the view of a morning keynote speech at theMorningstar investment Conference held today in Chicago- the panelists were Harry Hartford, Causeway Capital Management, David Herro, Oakmark Funds, and Rob Lovelace, The Capital Group. Read more of this post

Just how widespread is insider trading here?

Just how widespread is insider trading here?

Friday, Jun 20, 2014

R. Sivanithy

The Business Times

When a stock rises or falls in unusual fashion prior to a major corporate announcement, there are invariably complaints that the information was somehow leaked.

And the talk is that insiders have benefited, by either buying or selling before the rest of the market. Because this is unfair and undermines confidence, calls are then made for regulators to investigate. Read more of this post

Caterpillar Asia Sales Crater By 30% – Company Reports Weakest Stretch Of Global Demand Since Lehman Collapse

Caterpillar Asia Sales Crater By 30% – Company Reports Weakest Stretch Of Global Demand Since Lehman Collapse

Tyler Durden on 06/19/2014 10:54 -0400

The chart below, showing CAT latest monthly retail sales for the month of May and broken down by region as well as consolidated for the entire world, paints a vastly different picture than that presented by the company’s stock price. Read more of this post

A Peek Inside The Secret World Of Currency Manipulation

A Peek Inside The Secret World Of Currency Manipulation

Tyler Durden on 06/19/2014 17:28 -0400

We already know that Wall Street manipulates everything (not conspiracy theory, but now open conspiracy fact), but Reuters’ Jamie McGeever exposes the ugly chatroom realities of just how FX traders shared orders, split trades, front-ran clients in million of electronic messages providing fresh evidence of collusion among top currency traders. Traders pooled order details and discussed the ‘spread’ they would offer, “I don’t like this guy…I’d show 6 to good guys but guys like that I’m going to show 7 in future,” the trader added. Unrigged?

To summarize just how, who and where this manipulation takes places is the following series of charts from Bloomberg demonstrating Wall Street at its best – breaking the rules and making a killing. Read more of this post

Taiwan’s Quanta to start mass production of Apple’s smartwatch in July: source

Taiwan’s Quanta to start mass production of Apple’s smartwatch in July: source

7:41pm EDT

By Michael Gold

TAIPEI (Reuters) – Taiwan’s Quanta Computer Inc 2382.TW will start mass production of Apple Inc’s AAPL.O first smartwatch in July, a source familiar with the matter said, as the U.S. tech giant tries to prove it can still innovate against rival Samsung Electronics Co Ltd. Read more of this post

Power of Microsoft’s Bing an open question in search industry

Power of Microsoft’s Bing an open question in search industry

3:50pm EDT

By Bill Rigby

SEATTLE (Reuters) – Microsoft Corp’s (MSFT.O: QuoteProfileResearchStock Buzz) new chief executive, Satya Nadella, likes to boast that Bing is growing and powers 30 percent of the Internet search market, making it a worthy competitor to Google Inc (GOOGL.O: QuoteProfileResearchStock Buzz).

But within the advertising and research industries that measure and manage search as a business, Microsoft’s strength is an open question. Read more of this post

Chinese tycoon invites 1000 impoverished Americans to have lunch with him in New York in an attempt to show fellow tycoons that there is more to life than “luxury goods, gambling and prostitution”

Chinese tycoon invites 1000 impoverished Americans to have lunch with him in New York

June 19, 2014

image001-3

Tom Phillips

Chinese billionaire philanthropist Chen Guangbiao, whose previous media stunts include bottling clean air and selling it to highlight China’s pollution problems. Photo: Yuan Jianmin

A Chinese billionaire has announced plans to invite 1000 impoverished Americans for a meal in New York’s Central Park in an attempt to show fellow tycoons that there is more to life than “luxury goods, gambling and prostitution”.

Chen Guangbiao, a recycling magnate from the eastern province of Jiangsu, issued the invitation to his “charity luncheon for 1000 poor and destitute Americans” through two prominent advertisements placed in The New York Times and The Wall Street Journal this week. Guests will be given $US300 ($319) to spend on “occupational training” as well as lunch at the Loeb Boathouse restaurant in Manhattan’s Central Park.

All they do is splurge on luxury goods, gambling and prostitution and very few of them sincerely live up to their social responsibility.  

The restaurant, which featured in the 1989 film When Harry Met Sally, describes itself as “the ultimate urban oasis” and “a haven for romantics and nature lovers”.

Mr Chen said he hoped that the lunch, which he expected to cost about $US1 million, would boost relations between China and the US and change perceptions of wealthy Chinese.

“I want to spread the message in the US that there are good philanthropists in China and not all are crazy spenders on luxury goods,” he told Hong Kong’s South China Morning Post on Wednesday.

The tycoon, whose past stunts include selling canned air to raise awareness of pollution and smashing a Mercedes Benz to draw attention to global warming, also hoped to serve as a role model for Chinese billionaires.

He said: “There are many wealthy Chinese billionaires but most of them gained their wealth from market speculation and colluding with government officials while destroying the environment.

“I can’t bear the sight of it, because all they do is splurge on luxury goods, gambling and prostitution and very few of them sincerely live up to their social responsibility.”

It was not immediately clear whether Mr Chen’s guests would be offered a set menu at the Central Park feast or be allowed to choose from the restaurant’s a la carte lunch menu, which features dishes such as Lemon-Oregano Crusted Salmon and Yellowfin Tuna Sashimi with Tobiko Caviar and Jalapeno Wasabi Vinaigrette.

In a 2010 interview with The Telegraph, Mr Chen said he hoped to build a “charity army” of wealthy Chinese business people who would pump large chunks of their profits back into society.

Leading in the 21st century: An interview with Shell’s Ann Pickard on Distributed Leadership

Leading in the 21st century: An interview with Shell’s Ann Pickard

After building a career in Africa, Australia, and now the Arctic, the Royal Dutch Shell executive vice president has developed core leadership principles to safeguard employees and the environment.

June 2014

Distributed leadership

Sprints and marathons

Knowing when to listen

Ann Pickard, the executive vice president, Arctic, at Royal Dutch Shell, built her career in the far-flung corners of the global oil-and-gas industry. In this interview with McKinsey’s Rik Kirkland, she discusses her leadership principles, the impact of listening, and the satisfaction of empowering all employees. An edited transcript of Pickard’s remarks follows. Read more of this post

China’s Collateral Rehypothecation Fraud Is Systemic

China’s Collateral Rehypothecation Fraud Is Systemic

Tyler Durden on 06/14/2014 14:57 -0400

It’s official – everyone’s involved! According to the 21st Century Business Herald, at least 17 financial institutions involved in copper, aluminum and other nonferrous metals financing business face losses of almost 15 billion Yuan (not including the contagious rehypothecated collateral chains involved) due to the over-invoicing of the Qingdao port. Crucially, it appears that the evaporation of collateral (i.e. multiple loans secured by the same collateral) has been confirmed officially and banks such as Standard Chartered have already ceased any new business via this supposedly secured channel. Read more of this post

How Smart Beta ETFs Affect Stock Volumes, Correlations

How Smart Beta ETFs Affect Stock Volumes, Correlations

by Michael IdeJune 13, 2014, 12:17 pm

Fundamental investors may have to consider how smart beta strategies can impact their own positions Read more of this post

The Science Behind Hangovers Is Terrible

The Science Behind Hangovers Is Terrible

DINA SPECTOR SCIENCE  JUN. 14, 2014, 1:36 AM

Everyone has their own hacks for relieving the symptoms of a hangover, but there’s still no single hangover cure that’s proven to work.

Sure, people have asked tons of questions about what causes morning hangovers and how we can alleviate that pounding head, I-want-to-puke feeling, but apparently we just don’t have very good answers. Read more of this post

http://www.youtube.com/watch?v=AzWK-x5WlXk

http://www.youtube.com/watch?v=AzWK-x5WlXk

This Is The Biggest Ad In India Right Now And It’s Absolutely Terrifying

KATIE RICHARDS ADVERTISING  JUN. 14, 2014, 8:50 AM

In a world where younger generations are becoming more tech-savvy and social media crazy, kids are using cell phones and Facebook almost from the time they are born. At least that’s what MTS Telecom’s latest ad for its 3GPlus Network is saying. Read more of this post

Thai leaders employ ancient hero to boost their cause

June 13, 2014 1:49 pm

Thai leaders employ ancient hero to boost their cause

By Michael Peel in Bangkok

Thailand famously banned the Hollywood movie The King and I for its allegedly offensive and distorted picture of the country’s monarchy. Now the new military junta in Bangkok is delivering its riposte: 35,000 free seats to see the sword-wielding biopic of an earlier royal ruler promoted as a nationalist hero for these troubled post-coup times. Read more of this post

A guide to (mis)communication: In the UK, it is important to finish meetings by summing up key points; but in France they can end with an ambiguous ‘Et voilà!’

June 13, 2014 1:09 pm

A guide to (mis)communication

By Gillian Tett

In the UK, it is important to finish meetings by summing up key points; but in France they can end with an ambiguous ‘Et voilà!’

In recent months, a wry little document called the “Anglo-Dutch translation guide” has been tossed between the email boxes of bankers, diplomats, business people and journalists. This lists phrases that are commonly – and completely – misunderstood when English and Dutch people talk to each other. Read more of this post

Over pumpkin soup, the Nobel Prize-winning economist Edmund Phelps talks to the FT’s Martin Wolf about creativity and innovation

June 13, 2014 1:16 pm

Edmund Phelps

By Martin Wolf

Over pumpkin soup, the Nobel Prize-winning economist talks to the FT’s Martin Wolf about creativity and innovation

Ihave arranged to meet Edmund (Ned) Phelps, director of the Center on Capitalism and Society at Columbia University, at the Kongress Hotel in Davos during the World Economic Forum. It is old-fashioned and very Swiss. Read more of this post

Boom or hype? The truth about menswear; The fashion industry says menswear sales are soaring but the real picture is more complicated

June 13, 2014 7:17 pm

Boom or hype? The truth about menswear

By Charlie Porter

The fashion industry loves to talk about a menswear boom but how much do the big brands actually sell?

It’s a simple question: how important is menswear to the main fashion labels? It seems timely, too, since this weekend sees the beginning of the menswear collections for spring/summer 2015. Ideally, the show experience is supposed to be intoxicating, creating a happy stupor that luxury conglomerates hope will make male consumers buy yet more stuff. But how much menswear are the brands actually selling? Read more of this post

Financial markets: Hurrah before the storm; Low volatility risks lulling investors into false sense of security

June 13, 2014 7:30 pm

Financial markets: Hurrah before the storm

By Ralph Atkins

Low volatility risks lulling investors into false sense of security

After Lehman Brothers collapsed in late 2008, financial markets around the world panicked. Almost six years later, the world may feel as vulnerable to geopolitical and economic shocks but serenity has broken out. Read more of this post

Silicon Valley Tries to Remake the Idea Machine

Silicon Valley Tries to Remake the Idea Machine

JUNE 10, 2014

By CLAIRE CAIN MILLER

image001

Like any supersecret lab that’s supposedly trying to invent the future, Google X looks rather nondescript from the street. Besides the occasional hot pink driverless car parked out front, the facility is an archipelago of unmarked, low-slung, redbrick buildings, more Sunset Park than Silicon Valley. Inside, however, whiteboards offer clues about what exactly the future — at least as Google sees it — might look like. And while some diagrams — including one with parts labeled “snooze” and “set time” — suggest more mundane inventions, others, like one outlining a “space elevator,” seem a bit more ambitious. Read more of this post

Barron’s: Picking Up the Pieces; Our investment experts see little growth for the market averages, but plenty of opportunities among stocks

Picking Up the Pieces

Our investment experts see little growth for the market averages, but plenty of opportunities among stocks.

LAUREN R. RUBLIN

June 14, 2014

Say goodbye to sunny skies and ditch the rose-colored glasses.

That’s the collective advice of the investment seers who populate the Barron’sRoundtable, and whose market forecasts for the back half of 2014 range from meh to feh. Specifically, the bulls in the bunch see a meager 5% gain in the Standard & Poor’s 500 in the months ahead, while the rest see a volatile rout in late summer that could leave stocks 10% lower, at least. Read more of this post

Why Clay Christensen is abandoning the traditional approach to academic research

Why Clay Christensen is abandoning the traditional approach to academic research

BY MATT MCFARLAND June 12

Professor Clay Christensen is trying something new on the Harvard Business School campus. (Kevin Ma/Bloomberg)

Clay Christensen, the Harvard Business School professor and godfather of innovation, fittingly has some fresh ideas about academic research. He scrapped the traditional academic approach for his latest paper, theCapitalist’s Dilemma, which was published in the June issue of the Harvard Business Review. Read more of this post

Indonesian property developers shaken by housing-loan regulation

Developers shaken by housing-loan regulation

Anggi M. Lubis, The Jakarta Post, Jakarta | Business | Sat, June 14 2014, 1:02 PM

The central bank’s policy of tightening the loan-to-value (LTV) for property purchases, introduced late last year, has made the country’s publicly listed property developers more pessimistic about sales this year, as buyers are now required to pay a strict minimum down payment. Read more of this post

Ignore the market rally; Modi has limited room to turn things around

Ignore the market rally; Modi has limited room to turn things around

By Sunil B.S. @sunilbs_tweets June 13, 2014

Not so fast, bull market.

Earlier this week, president Pranab Mukherjee laid out Narendra Modi’s plans to reignite investment into India. But it is easier said than done.

A recent report by Credit Suisse says that markets have overestimated the powers of the central government. It pointed out that of the projects worth $1,391 billion that are under implementation, only those worth $351 billion have reached the central government for approval. The rest are stuck because either there are problems within respective organizations or these projects come under purview of state governments. Read more of this post

Uber is offering helicopter rides over Mumbai and Bangalore for $85

Uber is offering helicopter rides over Mumbai and Bangalore for $85

By Shruti Chakraborty June 13, 2014

While the cab-hailing app Uber is in the news elsewhere as traditional taxi drivers rise in protest in European capitals, the company, recently valued at $17 billion, looks set to enjoy a weekend of buzz around the brand in India.

In Mumbai and Bangalore, Uber is offering a one-time service this weekend–users can “hail” a chopper. Effectively, they can book a chopper ride from within the app. For Rs5,000 ($85) for two people, an Uber cab will pick you up and take you to a helipad, from where a chopper service operated by a commercial operator will take you on a 20- to 30-minute ride around the city. This will be followed by brunch and a ride back home. Read more of this post

Does the advertising business that built Google actually work?

Does the advertising business that built Google actually work?

By Tim Fernholz @timfernholz June 13, 2014

What if the advertisers who pay Google most of the money it earns are getting a negative return on their investment, to the tune of -63%?

That’s the question raised by a new paper that uses internal eBay data to assess whether the company’s investment in search-engine marketing is actually paying off. When major brands spend to make sure their results are at the top of a Google search page for certain keywords, they like to think they’re effectively targeting the customers looking for their products. But what if they are paying for something that they could be getting for free?

image001 Read more of this post

Transcript of Full Commencement Address by Jim Carrey at Maharishi University of Management

http://www.youtube.com/watch?v=V80-gPkpH6M

Transcript of Full Commencement Address by Jim Carrey    

Official Commencement Address Graduating Class of 2014
from Maharishi University of Management, May 24th, 2014
by Jim Carrey

Thank you Bevan, thank you all!

I brought one of my paintings to show you today. Hope you guys are gonna be able see it okay. It’s not one of my bigger pieces. You might wanna move down front — to get a good look at it. (kidding)

Faculty, Parents, Friends, Dignitaries… Graduating Class of 2014, and all the dead baseball players coming out of the corn to be with us today. (laughter) After the harvest there’s no place to hide — the fields are empty — there is no cover there! (laughter) Read more of this post

Can You Handle the Market’s Stress Test?

15 HRS AGOMONEYBEAT

Can You Handle the Market’s Stress Test?

Investing graybeards like to say that “bull markets climb a wall of worry.” This one has been sleepwalking up a wall of boredom.

By Jason Zweig

As of this Friday, the S&P 500 has gone 980 days without a 10% decline, according to Birinyi Associates, the fifth-longest such stretch on record. This past week’s nervousness, set off by the insurgency in Iraq and the surprise defeat of U.S. Rep. Eric Cantor, is thus the perfect pretext for investors to think about what they will do when the market takes a serious beating. Read more of this post

In print or on dead trees, there’s money in long-form journalism

In print or on dead trees, there’s money in long-form journalism

BY TED RALL 
ON JUNE 13, 2014

Like others who got into journalism while print media was fading, I have been offering my theories about what has been going wrong. (Hint: newspaper circulation has been declining since the 1960s, so industry executives might want to stop blaming the Internet.) Read more of this post

Infosys founder plays down top management exits; focuses on innovation

Infosys founder plays down top management exits; focuses on innovation

11:08am EDT

By Lehar Maan and Soham Chatterjee

BANGALORE (Reuters) – Infosys has enough senior managers to run the business even if more executives leave India’s second-largest IT services exporter, its founder said on Saturday, after a spate of staff exits triggered concerns about a leadership vacuum. Read more of this post

What bugs foreign investors about China?

Updated: Saturday June 14, 2014 MYT 9:20:56 AM

What bugs foreign investors about China?

BY TAN SRI LIN SEE-YAN

I spent the last week of May at Shanghai’s Fudan University – attended two global conferences there. The network is quite fantastic, full of “lao-wai” (foreigners) academics and policymakers seeking analytical clarification on four main areas of concern: (i) Surely, China can’t keep on growing at 7.5%; (ii) Is the property bubble going to bust? (iii) Will China ever reform?; and (iv) Can the yuan go international? Investors expect wrenching change. Here’s my take. Read more of this post