Note to readers: #WeeklyInvestorReader contains a few of the articles I read during the week. Visit my Twitter @HurriCap for any other articles not included. If any of the articles are behind paywalls it may be possible to read them by searching for the article’s title via Google News.
Q&A With Jack Bogle: ‘We’re in the Middle of a Revolution’ – Bloomberg Markets, November 23, 2016 | John “Jack” Bogle wrote his Princeton senior thesis in 1951, arguing that mutual funds “may make no claim to superiority over the market averages.” Sixty-five years later, the Vanguard founder is still being forced to defend his argument—perhaps now more than ever.
Handelsbanken chief has no intention of changing ‘self-managed’ ethos – Financial Times, November 24, 2016 | Anders Bouvin says Swedish bank will stick to its ‘knitting’ as 40-year model proves robust.
Inside a Moneymaking Machine Like No Other – Bloomberg, November 21, 2016 | The Medallion Fund, an employees-only offering for the quants at Renaissance Technologies, is the blackest box in all of finance.
Analyzing Stocks With a Partner – Gannon on Investing, November 25, 2016 | It’s a huge help to have someone to talk stocks with. But, I’m not sure it’s a help in quite the way people think it is. I think people believe that Buffett is less likely to make a big mistake if he has Munger to talk to, that I’m less likely to make a big mistake if I have Quan to talk to, and so on. I’m not sure that’s true. I know from my experience working with Quan that our thinking was more similar than subscribers thought. For example, one question I got a lot was who picked which stock. And that’s a hard question for me to answer. Some of that might be the exact process we used. I can describe that process a bit here.
Warren Buffett’s Meeting with University of Maryland MBA/MS Students – November 18, 2016 – Dr. David Kass, November 18, 2016 | But of course the reason why we care whether or not Buffett himself made the decision is because we want to know whether airline investments are so attractive right now that we should appeal to authority and mimic the decision.
Surprise! Warren Buffett turns out to be more prescient about stocks than politics – Forbes, November 22, 2016 | Tracking the Oracle of Omaha’s results in a 17-year stock market prediction.
A Dozen Things Warren Buffett and Charlie Munger Learned From See’s Candies – Tren Griffin, November 25, 2016 | One of the most important decisions in the history of Berkshire was the acquisition of See’s Candies in 1972. Buffett has called See’s Candies “the prototype of a dream business.” Berkshire’s purchase of a boxed candy business founded by the See family in California fundamentally changed the investing world because it changed the way Buffett and Munger thought about investing. While you may never have the chance to own a business like See’s Candies, by better understanding the nature of a dream business you can more easily find a business to invest in that shares some of its positive attributes.
Some of the Wisest Words Ever Spoken About Investing – Jason Zweig, November 25, 2016 | After what for many has been a grim and stressful year, investors shouldn’t let Thanksgiving weekend pass without making sure to count their blessings. Begin by closing your eyes, thinking of this year’s economic and political news, and then guessing how the U.S. stock market has responded. Remarkably, the S&P 500 is up 10% so far this year, including dividends. That might not last, but only an ingrate would scoff at it. Next, be thankful for the low costs of investing.
This BUD’s for You – Morningstar, November 25, 2016 | Both the American depositary receipts and the Belgium-traded ordinary shares of Anheuser-Busch InBev (BUD)/(ABI) have fallen more than 20% over the past two months, underperforming the consumer staples sector, which has declined 6% over the same period, as measured by the S&P Consumer Staples Index. During that time, we have seen nothing that changes our opinion of the power of the business to earn economic profits in the long term. We are reiterating our $126 fair value estimate for the ADRs and raising our valuation of the ordinary shares to EUR 118 from EUR 112 to account for the recent strength of the U.S. dollar against the euro. We still believe AB InBev represents one of the strongest franchises in global consumer staples, with a wide economic moat, and we believe there is compelling value in the shares for long-term investors.
Alfred P. Sloan on Automobile Distribution – Rational Walk, November 21, 2016 | Despite rapid advances in automobile technology in recent decades, the manner in which manufacturers distribute their products to the end customer has remained relatively unchanged for nearly one hundred years. New vehicles in the United States are almost exclusively distributed through a vast network of franchised dealerships. According to the National Automobile Dealers Association, there were 16,545 new car dealerships operating in the United States in 2015. These dealerships registered total sales of $862.7 billion and generated $63 billion in payroll. Nearly 1.1 million people were directly employed by dealerships with an additional 1.2 million jobs supported indirectly.
In the game of life, anything times zero must still be zero – Wired, November 18, 2016 | Real life decisions are like darts: aiming for the high score brings a higher chance of disaster
Best Investing Books of All Time: As Voted By 24 Top Investors & Institutions – The Ways to Wealth, November 3, 2016 | You probably have an idea of what the best investing books of all time are.The Intelligent Investor, A Random Walk Down Wall Street, Warren Buffett’s Annual Letters… to name a few. These are some of the books you’ll find on most media publications “best investing books” list. But what books are the greatest investors of our generation recommending?
6 Ways Pretend Investors Differ From the Real Ones – The New York Times, November 21, 2016 | Do you remember playing pretend when you were little? Maybe you were a superhero, a dinosaur or a princess. It’s normal when you’re little, and it’s usually harmless. Most children know the difference between pretending to be a superhero and jumping off the roof thinking they can fly. But adults often forget. For instance, we may stop pretending to be superheroes, but a lot of us seem convinced that we can pretend to be investors. That’s dangerous.
Everyone Loves A Story – Dorsey Wright, November 22, 2016 | There is always a reason not to invest in stocks. Over the years there have been countless reasons that have kept investors out of the market.
3 brutal charts explain everything that is going on in money management right now – Business Insider, November 22, 2016 | The flow of money from actively managed funds to index-trackers is one of the dominant themes in finance right now.
Ackman Admits Mistake, but Chipotle Bet Could Be Another – The New York Times, November 18, 2016 | What should we make of the outspoken defense offered by William A. Ackman of his hedge fund’s awful performance in the last two years? Has he, as he claimed at last week’s DealBook conference, learned the hard lesson of his disastrous 2015 investment in Valeant Pharmaceuticals International, which has cost his investors billions of dollars?
Gilead Sciences (GILD): Very Cheap at $74 – The Conservative Income Investor, November 20, 2015 | Between 2017 and 2021, net profits from the sale of Sovaldi and Harvoni ought to total somewhere around $70 billion. Based on current trends, about $30-$40 billion of that will go towards dividend payments and share repurchases that benefit the shareholders of Gilead Sciences. This means that Gilead stands to have at least $30 billion in the next five years that can be used to make acquisitions and develop other drugs. For this reason, I consider Gilead’s current market cap of $99 billion, compared to almost $15 billion in annual profits, to be a signal of deep value at a P/E ratio of 6.7x earnings. This is crazy.
When Genius Failed – Investing Caffeine, November 21, 2016 | When Genius Failed chronicles the rise and fall of what was considered the best and largest global hedge fund, Long Term Capital Management (LTCM). The irony behind the collapse makes the story especially intriguing. Despite melding the brightest minds in finance, including two Nobel Prize winners, Robert Merton and Myron Scholes, the Greenwich, Connecticut hedge fund that started with $1.3 billion in early 1994 managed to peak at around $140 billion before eventually crumbling to ruin.
Pre-suasion: How to Influence With Integrity with Robert Cialdini – Innovation Ecosystem | Professor Robert Cialdini has spent his entire career researching the science of influence. This has earned him an international reputation as an expert in the fields of persuasion, compliance, and negotiation. On this week’s episode, Robert discusses how to enlist the support of your senior managers prior to making an important presentation, how companies can boost their sales productivity by up to 60%, and what we can learn from Warren Buffett on communication.
How Google Is Poised To Become A Dominant Investment Manager – Forbes, October 6, 2016 | Google has been making some waves recently over reports that it intends to enter the asset management industry following recent suitability studies the firm has conducted. Facebook has recently explored entering the financial services industry as well, as the company is reportedly seeking to set up an international monetary transactions service for Facebook users.
The Big Interview: Peter Bronsman, Kopparberg Brewery – Morning Advertiser, April 25, 2014 | Interview with the CEO of Kopparberg Brewery.
Quit Social Media. Your Career May Depend on It – The New York Times, November 19, 2016 | I’m a millennial computer scientist who also writes books and runs a blog. Demographically speaking I should be a heavy social media user, but that is not the case. I’ve never had a social media account. At the moment, this makes me an outlier, but I think many more people should follow my lead and quit these services. There are many issues with social media, from its corrosion of civic life to its cultural shallowness, but the argument I want to make here is more pragmatic: You should quit social media because it can hurt your career.
Articles in Swedish
Teckna aktien och lämna sedan bygget – Dagens Industri, November 20, 2016 | Hög tillväxt och grandiosa byggplaner står mot lövtunna marginaler och uselt kassaflöde.
Aptitlig tillväxt i Volati – Dagens Industri, November 24, 2016 | Med ett fast noteringspris, bra ankarinvesterare och en ambitiös plan för de kommande årens förvärvs- och vinstutveckling har Volati krattat för en lyckad notering nästa vecka. Vi knorrar lite över priset, men tecknar aktien.
“A reader lives a thousand lives before he dies, said Jojen. The man who never reads lives only one.”
―George R.R. Martin, A Dance with Dragons
Disclosure: #WeeklyInvestorReader contains a few of the articles I read this week and enjoyed the most. I am not receiving any compensation for any of the links provided.