Most Recent Stingy News
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| Prem's letter |
| 03/08/14 10:42 PM EST Permlink | Watsa |
| "In this environment, with zero interest rates and high debt levels prevailing in most developed countries, giving them limited flexibility to react to unintended consequences, we think it is prudent to have a very strong balance sheet with a large cash position and to be protected on the downside. When problems hit, only those with cash and very liquid assets can take advantage of them. While it is very painful and costly waiting, we think your (and our!) patience will be rewarded." |
| More Watsa: Prem Watsa opens up about BlackBerry |
| Fairfax meeting slides |
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| Mind the gap 2014 |
| 03/08/14 10:33 PM EST Permlink | Markets |
| "In sum, the typical investor gained 4.8% annualized over the 10 years ended December 2013 versus 7.3% for the typical fund. The biggest gaps were in sector funds and international equity. That's not surprising, as more-volatile funds tend to lead to bigger gaps." |
| More Markets: Getting around the CAPE |
| Is a smooth ride priced like a Cadillac? |
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| Benj likes gold |
| 03/08/14 10:31 PM EST Permlink | Stingy Investing |
| "When you think about the sort of people who grow up and go into the investment business, you might imagine characters such as Alex Keaton from the 1980s TV series Family Ties. Michael J. Fox brought the role to life and played a straight-laced conservative kid who was a little too obsessed with money. But it's best to ignore such stereotypes, because more artistic souls can also become great investors, and Benj Gallander is a prime example." |
| More Stingy Investing: 3 Stingy Stocks for 2014 |
| 4 Graham Stocks for 2014 |
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| 3 Stingy Stocks for 2014 |
| 03/03/14 3:15 PM EST Permlink | Stingy Investing |
| "Over the last year the Stingy Stocks have climbed by an average of 37.8% while the S&P500 (as represented by the SPY exchange traded fund) advanced only 29.7%. Both fared well but the market trailed by 8.1 percentage points." |
| More Stingy Investing: 4 Graham Stocks for 2014 |
| Take a vacation |
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| 4 Graham Stocks for 2014 |
| 03/03/14 3:10 PM EST Permlink | Stingy Investing |
| "If you had bought equal dollar amounts of the Graham stocks and replaced them with the new batch each year, you would have gained 830% (or 19% annualized) over the full period." |
| More Stingy Investing: Take a vacation |
| Glamour tech stocks not tempting |
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| A CAPE Crusader |
| 03/02/14 1:14 PM EST Permlink | Montier |
| "Having spent a large proportion of my career prior to joining GMO working at investment banks, I'm well aware of what Andrew Smithers describes as 'Stock Broker Economics,' the second tenet of which is 'The market is always cheap.' Over the years I've witnessed many attempts by the practitioners of this most dark art to justify why tried and tested measures of valuation are no longer meaningful, or occasionally create new measures of valuation that purport to show the market to be cheap." |
| More Montier: Hyperinflations, hysteria, and false memories |
| Capital preservation and financial repression |
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| Stock picking skills of SEC employees |
| 03/02/14 1:12 PM EST Permlink | Academia |
| "These results raise questions about potential rent seeking activities of the regulator's employees." |
| More Academia: The shorting premium |
| Volatility and mutual fund manager skill |
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| Making sense of experts' picks |
| 03/02/14 1:11 PM EST Permlink | Hallett |
| "Among the flurry of recommendations, it's important to keep a few things in mind in the spirit of sound portfolio construction." |
| More Hallett: Smart beta needs to come out of the closet |
| Should you follow your fund's star |
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| The Glidepath Illusion |
| 03/02/14 1:09 PM EST Permlink | Arnott |
| "Rob Arnott explains why target-date funds fail to either maximize wealth or minimize uncertainty about future income." |
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| Take a vacation |
| 03/02/14 1:06 PM EST Permlink | Stingy Investing |
| "The mood is glum in Valueville these days. Conditions are so depressed that its inhabitants can be spotted packing up their Bloomberg terminals and heading off on extended vacations." |
| More Stingy Investing: Glamour tech stocks not tempting |
| Survivorship bias |
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| Berkshire Hathaway report for 2013 |
| 03/01/14 10:33 AM EST Permlink | Buffett |
| "Local and state financial problems are accelerating, in large part because public entities promised pensions they couldn't afford. Citizens and public officials typically under-appreciated the gigantic financial tapeworm that was born when promises were made that conflicted with a willingness to fund them. Unfortunately, pension mathematics today remain a mystery to most Americans." |
| More Buffett: How to hold stocks: Buffett |
| Buffett smashed the EMH |
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| How to hold stocks: Buffett |
| 02/24/14 10:16 AM EST Permlink | Buffett |
| "In an exclusive excerpt from his upcoming shareholder letter, Warren Buffett looks back at a pair of real estate purchases and the lessons they offer for equity investors." |
| More Buffett: Buffett smashed the EMH |
| Warren Buffett talks to students |
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| Now with less democracy |
| 02/23/14 12:55 PM EST Permlink | Government |
| "Quebec is vowing to act fast and make changes that would give the corporate boards of locally-headquartered companies more power to reject hostile takeovers." |
| More Government: Job creation plan won't create a single job |
| Confessions of a Quantitative Easer |
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| Now with more democracy |
| 02/23/14 12:52 PM EST Permlink | Law |
| "Ottawa should reform its key corporate legislation - the Canada Business Corporations Act - to entrench majority voting as a legal requirement for all companies with public shareholders. The CBCA is under review for potential amendments, so the time is right to push for change. A fundamental reform of shareholder democracy is long overdue. Annual board elections should be more than an empty gesture." |
| More Law: Corruption Law |
| Keep it simple |
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| The shorting premium |
| 02/23/14 12:49 PM EST Permlink | Academia |
| "Short-rebate fees are a strong predictor of the cross-section of stock returns, both gross and net of fees. We document a large "shorting premium"; the cheap-minus-expensive-to-short (CME) portfolio of stocks has an average monthly gross return of 1.45%, a 0.92% net return, and a 1.55% four-factor alpha. We show that short fees also interact strongly with the returns to seven of the most well-known and large cross-sectional anomalies. These anomalies disappear among the 80% of stocks with low short fees, but are greatly amplified among those with high fees. We propose a joint explanation for these findings wherein the shorting premium is compensation for the short-side risk borne by the small minority of investors who do most shorting. It therefore raises prices rather than lowers them. We use the CME portfolio return as a proxy for this short risk and demonstrate that a Fama-French CME factor model largely captures the returns to all seven anomalies within both high- and low-fee stocks." |
| More Academia: Volatility and mutual fund manager skill |
| Mike Rowe on the high cost of college |
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| The growing case against ETFs |
| 02/23/14 12:44 PM EST Permlink | Indexing |
| "Whether you are racing, cruising, stopping or crashing, safe driving comes down to a mix of equipment and personnel. The same can be said for mutual funds and exchange-traded funds, and while there is growing consensus that ETFs are the better vehicle, there's growing evidence that the people using them may not be so skilled behind the wheel. That's a real issue because a number of studies seem to indicate that the 'better' investment vehicle isn't delivering better results" |
| More Indexing: Why do ridiculous portfolios outperform? |
| Dilbert's investing gift |
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| Investment principles and habits |
| 02/16/14 8:28 PM EST Permlink | Value Investing |
| "David Kostin, Goldman Sachs' chief U.S. equity strategist, explained that investor demand for 'value' has been so pervasive that low-valuation stocks had outperformed higher valuation peers by 12 percent in 2013. As a result, the distribution of S&P 500 P/E multiples was now its tightest in at least 25 years, implying less differentiation of companies based on valuation." |
| More Value Investing: Casting a wide net for deep value |
| Words of wisdom to value investors |
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| Glamour tech stocks not tempting |
| 02/16/14 8:01 PM EST Permlink | Stingy Investing |
| "When it comes to the stock market, glamour stocks are much like marshmallows. They're exciting, fired with rosy growth prospects, and offer the dream of riches. While they might provide a speculative sugar rush, their long-term prospects tend to be quite poor." |
| More Stingy Investing: Survivorship bias |
| Disappointing balanced index funds |
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| Survivorship bias |
| 02/16/14 7:58 PM EST Permlink | Stingy Investing |
| "Focusing solely on the winners can lead to a dangerously skewed view of the world. It's a particularly acute problem in the markets, where luck often plays an important role. Problem is, the market tends to bury its failures, which slip out of both sight and mind. Investors who don't account for them may find their decisions swayed by survivorship bias. It's a factor that fund investors should be particularly wary of." |
| More Stingy Investing: Disappointing balanced index funds |
| Market timing by indexers |
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| Getting around the CAPE |
| 02/16/14 7:54 PM EST Permlink | Markets |
| "Shiller's cyclically-adjusted price-earnings ratio is, as recent research has shown, one of the best ways of predicting long-term returns in the stockmarket. But it is not popular because it shows the US market as expensive in historical terms. There are various attacks upon it. One is that the inclusion of the 2008 downturn in profits distorts the ratio by pushing it higher; on the contrary, the 2008 experience shows the benefits of averaging profits over the long term and not relying on a single year's measure. Profits fell in 2008 because they had been overstated in preceding years. Another line of attack is that the measure is irrelevant because accounting standards have changed. But that argument applies to all profits-based measures for valuations, like the prospective p/e on which bulls rely." |
| More Markets: Is a smooth ride priced like a Cadillac? |
| How indexing distorts investment reality |
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| Disappointing balanced index funds |
| 02/16/14 7:52 PM EST Permlink | Stingy Investing |
| "New investors should think seriously about opting for low-fee balanced funds like those offered by Mawer, Steadyhand, and PH&N. They represent good picks for active investors. Regrettably, there are relatively few balanced options that are worth recommending to index investors." |
| More Stingy Investing: Market timing by indexers |
| A bargain from Tweedy |
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