The Stingy News Weekly (12/27/2015)
Stingy News Flash
New from StingyInvestor
Cash? You gave me cash?
"It's the time of year to put on the ceremonial Scrooge hat and dish out a little holiday merriment in the form of advice from economists for misers."
Activists through the decades
"The famed activist investors of today are fine-tuning 400-year-old tactics. Shareholder fights with management stretch back all the way to the very first publicly-traded company, The Dutch East India Co., when shareholders tried to fight against a restructuring in the 1622." [Markets]
Bunking, debunking, and discovery
"As far as we can tell, most of the findings reported by social psychologists are false. It's a remarkable situation, to put it mildly. I never anticipated this. A recent attempt to replicate 55 social psychology findings published in top journals failed to replicate 75 percent of them. Other efforts have shown a similar pattern of non-replicability." [Science]
The impact of taxes
"Consider the financial options of a high net worth individual living in California. She can choose to hold her wealth in shares of Berkshire and pay no tax at all on the returns unless or until she needs to consume out of them, at which point she will be able to monetize them at a preferential long-term rate, or she can own fixed income securities - say, a 30 year treasury bond - and pay a whopping 56.7% tax rate on the earnings. In the case of the 30 year bond, at a 2.90% yield, her after-tax yield would be a paltry 1.26%. Unless equities were in an outright bubble, with extremely low imputed returns, what reason could she possibly have, as a long-term investor, to choose the fixed income option?" [Taxes]
Factors that launched 1,000 ETFs
"Across the five factors, the average long/short spread was 10.3%/year for the entire period (1964-2015), 10.6% for the period of rising rates (1964-1981), 11.8% for the period of falling rates (1981-2008) and 2.3% for the ZIRP period. Clearly, things have tailed off." [Value Investing]
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