The Stingy News Weekly (01/12/2015)
New from StingyInvestor
Super savers, spend your money
"It's belt tightening time for those facing mountains of unpaid holiday bills. But MoneySense readers often suffer from the opposite problem. That is, they save too much. They're part of a merry band of frugal folk who have bulging banks accounts. Some of them even have more money than they're likely to spend in several lifetimes. The super savers should resolve to ramp up their spending."
Asset Mixer Update
We've updated our Asset Mixer to include nominal data for 2014.
Periodic Table Update
We've updated our periodic table of annual returns for Canadians to include nominal data for 2014.
MiB: Patrick O'Shaughnessy
"O'Shaughnessy discusses that despite the difficulties of the economic environment, youth have tremendous advantages youth in terms of an investment horizon of up to half a century. This allows compounding to take place. In our conversation, we discuss active versus passive, why investors are their own worst enemies, and what they should - and should not - be doing." [Books]
Shareholder value is undervalued
"Those who say maximizing shareholder value is something like 'the worst idea ever' are essentially saying markets are wildly inefficient - disastrously and obviously so - at setting prices. Now, one is free to believe this extreme hypothesis. One can believe that markets are horrifically bad no matter how much I, and the legion of evidence, may disagree. One is free to cite the handful of exceptions that actually prove the rule here (exceptional managers and exceptional times for markets) and believe market prices consistently have no toehold on reality. But one must acknowledge that the trendy denunciation of 'maximize shareholder value' is exactly this self-same extreme radical denunciation of markets themselves. If you believe maximize shareholder value is the 'worst idea ever' you aren't simply cynical about how well markets function. No, you go much further. You directly claim they are utter disasters and that you have a better way. Good luck with that. Of course, you could temper your view, perhaps rephrase as 'maximizing shareholder value is a pretty good though imperfect idea and here are a few suggestions for improvement,' but those articles are way less exciting..." [Markets]
Institutional investors and stock return anomalies
"We examine institutional investor demand for stocks that are categorized as mispriced according to twelve well-known pricing anomalies. We find that institutional demand during the year prior to anomaly portfolio formation is typically on the wrong side of the anomalies' implied mispricing. That is, we find increases in institutional ownership for overvalued stocks and decreases in institutional ownership for undervalued stocks. Moreover, abnormal returns for all twelve anomalies are concentrated almost entirely in stocks with institutional demand on the wrong side. We consider several competing explanations for these puzzling results." [Academia]
The spectre of a Grexit
"Meanwhile the messages from Berlin are becoming louder: Greece should in principle stay in the euro, but Mr Tsipras's demands for a debt write-off and spending binge are unacceptable. The spectre of a Grexit, laid to rest while the Samaras government got on with its reforms, has resurfaced." [World]
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