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 12/11   The Stingy News Weekly: December 11, 2017 
 12/11   You can have your momentum factor and eat it too 
 12/11   Good advice, or advice that sounds good? 
 12/11   1974 and 1999: history turned upside down 
 12/11   Passive income changes create big concerns 
 12/11   Top U.S. small caps 
 12/11   U.S. vs Canadian banks 
 12/11   Microcap vertigo 

Most Recent Stingy News

The Stingy News Weekly: December 11, 2017
12/11/17 8:56 PM ESTSNW
This week we have the Top Small Stocks, microcaps, banks, momentum, and more.
More SNW: The Stingy News Weekly: December 4, 2017
The Stingy News Weekly: November 27, 2017

You can have your momentum factor and eat it too
12/11/17 8:02 PM ESTMomentum Investing
"We don't address this in the paper, but I would argue that this finding - that momentum is implementable at low cost - holds even more strongly when it's part of a multi-factor portfolio, where factors that complement momentum, like value, will dampen turnover. All considered, we find that momentum is quite implementable in real life."
More Momentum Investing: A terrible strategy
Idiosyncratic Momentum

Good advice, or advice that sounds good?
12/11/17 7:54 PM ESTZweig
"I stumbled across an obscure academic article that shocked me. A psychologist had compared the investment results of people who received frequent news updates about their stocks against those who got no news at all. He found that no news is good news: Investors who were kept in the dark outperformed the news junkies by up to 56%."
More Zweig: Best mutual fund disclosure
A portrait of Jason Zweig

1974 and 1999: history turned upside down
12/11/17 7:47 PM ESTMarkets
"Many years later, a leading small-stock fund manager recalled to me, half-horrified and half-amused, that he was ranked in the top tenth of his peers in 1973 and 1974. After inflation, he reminisced, he had lost only 85% of his shareholders' money since the beginning of 1973."
More Markets: Time diversification redux
Risks building in the markets

Passive income changes create big concerns
12/11/17 7:10 PM ESTTaxes
"The proposed measures around passive income will apply only to Canadian-controlled private corporations. What about public companies? Or foreign-controlled private companies? It hardly seems fair to put Canada's private business owners at a disadvantage here. If revisions are made to affect public and foreign private corporations, how will the changes impact foreign investment in Canada? The issue gets a lot more complicated - and political - than even the Liberals were expecting."
More Taxes: CRA gives taxpayers wrong info
Tax-avoiding whales swim free

Top U.S. small caps
12/11/17 6:36 PM ESTStingy Investing
"We're pleased to present the fourth edition of the Small Cap 500. Join us as we dive into the U.S. market to find the most promising small stocks in the land. Each stock is scrutinized and ranked based on its value and growth characteristics. The firms that score highly on both tests make it into our All Star team."
More Stingy Investing: U.S. vs Canadian banks
Microcap vertigo

U.S. vs Canadian banks
12/11/17 6:32 PM ESTStingy Investing
"The most dramatic difference between the U.S. and Canadian bank stocks comes down to leverage. All of the U.S. banks have smaller leverage ratios, and usually much smaller ones, than the Canadian banks. On average, the U.S. banks have leverage ratios (assets/equity) of 9.0, whereas the average for the Canadian banks comes in at 19.1."
More Stingy Investing: Microcap vertigo
Thinking outside the box

Microcap vertigo
12/11/17 6:29 PM ESTStingy Investing
"If volatility makes you woozy or you're prone to panic during downturns, then microcaps should be avoided in much the same way as an acrophobe avoids sitting next to windows in tall buildings." [$]
More Stingy Investing: Thinking outside the box
Two heads might be worse than one

The Stingy News Weekly: December 4, 2017
12/04/17 9:23 PM ESTSNW
This week we have Buffett's encyclopedias, factor timing, factor trading costs, risky mortgage investments, and more.
More SNW: The Stingy News Weekly: November 27, 2017
The Stingy News Weekly: November 20, 2017

Countering the narrative about value
12/04/17 9:11 PM ESTValue Investing
"By using the price-to-book ratio (or "P/B") as a primary determinant of value, the Russell 1000 Value index has tended to favor stocks from sectors with generally low P/B ratios, such as financials and energy companies, while excluding stocks from sectors such as technology and consumer staples, which may look cheap relative to earnings or cash flows, but have lofty P/B ratios. This, combined with a lack of sector constraints, means that comparing Russell 1000 Value to Russell 1000 Growth is really more akin to comparing energy and banks to consumer and technology stocks"
More Value Investing: Factor investing and trading costs
Going deep on contrarian factor timing

Factor investing and trading costs
12/04/17 8:34 PM ESTValue Investing
"Trading costs degrade performance. Factor investing strategies have capacity constraints. Higher turnover factors have lower capacity constraints than lower turnover factors."
More Value Investing: Going deep on contrarian factor timing
Microcap as an alternative to private equity

Risky mortgage investments
12/04/17 7:50 PM ESTGovernment
"The documents seen by Reuters, supported by interviews with 10 sources familiar with FSCO's activities, show that the agency didn't merely miss the problem; its senior investigators ignored or downplayed clear warnings from within their own ranks that retail investors were being sucked into a market to which they were ill-suited."
More Government: Mind the gap
Right math, wrong conclusion

Buffett's investments in encyclopedias
12/04/17 7:48 PM ESTBuffett
"Warren Buffett has eclectic taste in companies. Along with large, thriving businesses such as Geico and the BNSF Railway, he's accumulated a collection of head-scratchers. There's a bowling shoe brand, a maker of vacuum cleaner bags, almost three dozen newspapers, and the manufacturer of Ginsu knives. Then there's World Book."
More Buffett: Warren Buffett interview
Warren's pension

Going deep on contrarian factor timing
12/04/17 7:32 PM ESTValue Investing
"we study all the interesting things that happen when some stocks, or other assets, get deeply cheap while others get deeply expensive and, in the process, learn more about the economics of value investing, and how timing works when you sin a little but now in lots of places at once"
More Value Investing: Microcap as an alternative to private equity
Fairfax vs. Berkshire Hathaway

Enron, 10 years after
12/04/17 7:18 PM ESTCrime
"I lost roughly 90% of my net worth in a week. I never recovered. My marriage of 22 years blew up, and my entire network was nuked. I realized almost immediately that [complete] financial recovery wasn't possible... Even today, I worry that I might not be able to find a financial road to provide adequately for my son [who is in second grade]."
More Crime: Frank Abagnale interview
The dangerous world of tiny IPOs

Frank Abagnale interview
12/04/17 7:16 PM ESTCrime
"His transformation from one of the world's most notorious con men to an international cybersecurity expert trusted by the FBI has been mythologized in film and literature - but the takeaways he shares are the real deal." [video]
More Crime: The dangerous world of tiny IPOs
The latest investment scam

The Stingy News Weekly: November 27, 2017
11/27/17 9:31 PM ESTSNW
This week we have microcaps, private equity, taxes, and more.
More SNW: The Stingy News Weekly: November 20, 2017
The Stingy News Weekly: November 12, 2017

Microcap as an alternative to private equity
11/27/17 7:22 PM ESTValue Investing
"Private equity has become a central component of many institutional and high-net-worth investment portfolios over the past decade. While private equity offers potential advantages, it also requires taking distinct risks. This paper highlights an alternative to private equity - microcap equities - which mitigates several of these risks."
More Value Investing: Fairfax vs. Berkshire Hathaway
Lou Simpson interview

World leaders in debt
11/27/17 7:19 PM ESTDebt
"A report from the Organization for Economic Co-operation and Development (OECD) shows that Canadian households are among the most indebted in the world. In fact, Canada tops the list of countries surveyed."
More Debt: Debt hangover
Debt buyers

CRA gives taxpayers wrong info
11/27/17 7:18 PM ESTTaxes
"The Canada Revenue Agency's call centres blocked more than half the calls they received and gave taxpayers the wrong answers to their questions nearly one third of the time, the federal Auditor-General says."
More Taxes: Tax-avoiding whales swim free
Tax bill higher than 90 per cent

Private-equity firms feud
11/27/17 7:16 PM ESTLaw
"A former Ontario Superior Court judge was targeted in a sting designed to discredit him days before his decision in a controversial case with hundreds of millions of dollars at stake was scheduled to be heard at the Ontario Court of Appeal."
More Law: Tyranny of the noncompete clause
Now with more democracy

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Asset Mixer
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