#WeeklyInvestorReader | wk. 25

Note to readers: #WeeklyInvestorReader contains a few of the articles I read during the week. Visit my Twitter @HurriCap for any other articles that may not have been included. 

Why Harvard Business School is under fire – The Economist, May 18, 2017 | “A new book, “The Golden Passport” by Duff McDonald, argues that HBS has lost its crown as the top business school in America and also become a breeding ground for toxic behaviour, with conflicts of interests rife within the school, and its alumni responsible for pushing a rapacious form of capitalism that explains many of the ills of the world’s biggest economy.”

All Supermarket Moats are Local – Gannon on Investing, June 24, 2017 | “The market for groceries is local. Kroger’s superstores – about 61,000 square feet vs. 58,000 square feet at a Village run Shop-Rite – target customers in a 2 to 2.5 mile radius. An academic study of Wal-Mart’s impact on grocery stores, found the opening of a new Wal-Mart is only noticeable in the financial results of supermarkets located within 2 miles of the new Wal-Mart. This suggests that the opening of a supermarket even as close as 3 miles from an incumbent’s circle of convenience does not count as local market entry.”

Charlie Munger’s “The Psychology of Human Misjudgment” – Value Investing World, June 24, 2017 | “The abridged and animated video of Munger’s “The Psychology of Human Misjudgment” speech that has been making the rounds led me to go back and re-read the version Munger rewrote in 2005 for inclusion in Poor Charlie’s Almanack. The copy I continuously go back to is from a Word file that I created in order to put the speech on my Kindle, which is a lot easier to carry around than the book. I also added a few additional things that I took from Tren Griffin’s book on Charlie Munger.”

Value Investor Insight, August 31, 2016 – Value Investor Insight, August 16, 2016 | “Of Sound Mind: Eric Cinnamond ‘I love investing, but the only thing I’m very confident about today is that the stocks I follow are overvalued. That will change.'”

Amazon’s Nike deal took a billion dollar bite out of competing retailers – Recode, June 22, 2017 | “Amazon is in the business of everything and is one of the biggest companies in the world. When it makes moves, retailers feel it.”

Slides From Our June Markets Webinar (Is This As Good As It Gets?) – Pension Partners, June 23, 2017

Firefox Is As Fast As Chrome Now, And No One Cares – The AWL, June 20, 2017 | “Speaking of the web browser you already have, most likely, you are using Google Chrome. Eeeevvverrryone knows you’re using Google Chrome, especially Mozilla, the creators of Firefox, who have published their own report with humbling statistics about how everyone uses Chrome.”

Checklists for Evaluating Quality of Earnings – Arizona State University

Berkshire Hathaway Invests in Embattled Lender Home Capital – Bloomberg Markets, June 22, 2017 | “Buffett’s firm to buy shares, supply C$2 billion credit line. Alternative lender attempts comeback after regulatory woes.”

How to Survive the Retail Crisis: A Master Class from T.J. Maxx – Wall Street Journal, June 20, 2017 | “Traditional retailers are in crisis, damaged by rapidly shifting consumer tastes, technological change and cut-throat price competition. And then there’s TJX Cos., which is defying gravity with the simple idea that under the right circumstances people still like to shop in stores.”

Can Uber ever make money? – Financial Times, June 23, 2017 | “Ride-hailing company’s new CEO will have to stem billions of dollars in losses”

Everything You Need To Know About Wall Street Economists – @Goldfinger, June 22, 2017 | “The following chart was too good not to publish. What would we do without Wall Street economists?”

If you can’t explain something in simple terms, you don’t understand it – Kottke, June 17, 2017 | “Feynman was a truly great teacher. He prided himself on being able to devise ways to explain even the most profound ideas to beginning students. Once, I said to him, ‘Dick, explain to me, so that I can understand it, why spin one-half particles obey Fermi-Dirac statistics.’ Sizing up his audience perfectly, Feynman said, ‘I’ll prepare a freshman lecture on it.’ But he came back a few days later to say, ‘I couldn’t do it. I couldn’t reduce it to the freshman level. That means we don’t really understand it.'”

Why Amazon Added Whole Foods to Its Cart – Morningstar, June 21, 2017 | “Nevertheless, we do see several reasons why this acquisition is more than just a push into the grocery category, and why it can enhance Amazon’s wide moat.”

Home Bias Blues: Investors Really Should Get Out More – Morningstar, June 21, 2017 | “‘Home bias” is the term used to describe investors’ tendency to tilt their portfolios in favor of domestic stocks (bonds, too, but I’m going to focus on stocks). Here, I’ll discuss how home bias is measured, the factors that underpin this phenomenon, and why it’s probably a good idea to expand your horizons a bit–especially given current valuations.”

Kroger: The World Might be Ending, but not Before a Dividend Increase and a $1 Billion Share Buyback – Sure Dividend, June 23, 2017 | “If you were to base your investment decisions solely on the news headlines, you might be convinced that Kroger (KR) is going out of business. In fact, Kroger stock lost one-third of its value… in two trading days.”

THE NAKED FUND MANAGER: Platforms are taking over the world – Proactive Investors, April 17, 2017 | “The internet has fundamentally changed the playing field for businesses around the world. It has led to the removal of geological and informational constraints that many companies historically relied upon to carve out their economic moats and turn a profit.”

Scuttlebutt: The Qualitative Way to Test for a Moat – Geoff Gannon, May 30, 2017 | “A stock being on a magic formula list is not any proof of it having a moat. We know it had high returns on capital in the past. We now need to test if it will have high returns in the future”

Costco didn’t get all that cheap – The Reformed Broker, June 20, 2017 | “Amazon’s purchase of Whole Foods put a highly discussed dent in all the retail grocery stocks, of which Costco is perhaps the most highly regarded. It’s probably an overreaction, but time will tell. In the meanwhile, the stock really hasn’t gotten all that cheap on this recent slide.”

Amazon’s Real Target Isn’t Whole Foods. It’s Everything You Buy. – Bloomberg View, June 20, 2017 | “The really tempting margins are in consumer products. Look out, Procter & Gamble and Colgate-Palmolive.”

Amazon’s New Customer – Stratechery, June 19, 2017 | “If you don’t understand a company’s goals, how can you know what the strategies and tactics will be?”

Finding High-Quality Companies Today – Contrarian Edge, June 8, 2017 | “We are having a hard time finding high-quality companies at attractive valuations.”

Rise of hard discounters to hit market share of large US supermarkets – Consultancy.uk, June 19, 2017 | “The rapid expansion of discount grocery stores is set to affect the market share of traditional retailers, with price sensitive shoppers from a range of consumer segments keen on low prices, while products stocked at the respective hard discounters tend to be perceived as of sufficient quality.”

Conglomerates Didn’t Die. They Look Like Amazon. – New York Times, June 19, 2017 | “The conglomerate was supposed to be dead, a relic of a bygone era of corporate America. Investors, we have been repeatedly told, want smaller, nimbler, more focused companies. And yet there is Amazon.”

The $31 Billion Hole in GE’s Balance Sheet That Keeps Growing – Bloomberg, June 16, 2017 | “Pension shortfall is the biggest among S&P 500 companies. Top brass ‘living in fear’ of activists with short-term goals.”

Amazon’s Move Signals End of Line for Many Cashiers – New York Times, June 17, 2017 | “Imagine this scene from the future: You walk into a store and are greeted by name, by a computer with facial recognition that directs you to the items you need. You peruse a small area — no chance of getting lost or wasting time searching for things — because the store stocks only sample items. You wave your phone in front of”

How self-driving trucks can create more jobs than they kill – Yahoo Finance, June 5, 2017 | “The economic buzzword of the moment is automation. The robots are coming, we’re told, for our jobs, our money, and our cars, among other things. But this one-way view of automation as a job-killing tidal wave that leaves mass unemployment and poverty in its wake — requiring a universal basic income — misses that re-orienting the economy around new technology often creates new opportunities and, by extension, new jobs to be filled. And potentially even better jobs.”

HEDGE FUND READING LIST: Hundreds of investors say these 10 finance books are must-reads – Business Insider, May 20, 2017 | “The list is based on 1,120 responses, and ranked from least to most recommended. You can consider it a hedge fund reading list.”

In Swedish

Grov Di-miss i HM – Dagens Industri, 26 juni, 2017 | “Di identifierade symptomen, men tog dem inte på allvar. Köprekommendationen i H&M för ett år sedan blev ett dyrköpt misstag.”

Exklusivt med H&M-Persson: “Det är nu vi ska börja skörda” – Aktiespararna, 21 juni, 2017 | “H&M-vd:n Karl-Johan Persson om: aktiekursen, konkurrensen, digitaliseringen – och arvet efter grundaren Erling Persson.”

Exklusivt: Från bubblare till storsäljare: ”Enorm resa” – Aktiespararna, 21 juni, 2017 | “I Bergslagens djupaste skogar för en av de svenska aktiekurskometerna sin vardagliga tillvaro. Nu berättar Kopparbergs vd Peter Bronsman om hur bolaget tagit Sverige och inte minst Storbritannien med storm, om hur inledande motgångar byggde ett världsimperium av cider och om drömmen att bli ännu större på hemmaplan.”

Teknisk analys: Storbolagen du ska sälja – Dagens Industri, 21 juni, 2017 | “I förra veckan gick analysfirman Investtech igenom OMXS30-bolagen med starkast köpsignaler. Denna vecka presenterar de aktierna med tydligast säljrekommendation.”

Forskare: Klarna kommer sno storbankernas kunder – och vända upp och ner på hela sektorn – Veckans Affärer, 20 juni, 2017 | “Att Klarnas ansökan om bankoktroj nu har blivit helt godkänd ger betaltjänstföretaget en möjlighet att erbjuda sina kunder en bredare produktportfölj.”

Trots raset – H&M populärt bland sparare: “Glansdagar är förbi”– Aktiespararna, 20 juni, 2017 | “Kursen har rasat över 40 procent på två år – och bolaget kritiseras hårt. Trots det köps det massvis av aktier i H&M. – Jag tror att H&M:s glansdagar är förbi, säger Nordnets sparekonom Joakim Bornold.”

The Value Investor v.23 Köp inte H&M – Tradingportalen, 9 juni, 2017 | “Samtidigt som resultatet och framförallt utsikterna har försämrats är det uppenbart att många småsparare ökar sina innehav i tron att det nu är ”billigt” att köpa H&M eller med hänvisning till att ordföranden Stefan Persson köper jättelika volymer. Problemet med detta är bara att Perssons har köpt under många år oavsett aktieutvecklingen och att H&M vid PE 19 visserligen handlas lägre mot vinsten jämfört med tidigare då PE har legat på 22-25, men absolut inte kan ses som billig om man jämför med andra storbolag med idag betydligt bättre utveckling och utsikter.”

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