Showing posts from November, 2011

Hugh Hendry discussion at the Alternative Investment Conference

Thanks to Value Investing World for bringing this Hugh Hendry interview to my attention. I may not agree with all the things—short-term orientation of hedge funds is actually worse IMO; the sharp pencil effect doesn't always work—but Hendry is a true contrarian and worth listening. Like Marc Faber or Jim Rogers, you also can't take everything Hugh Hendry says seriously. I had always felt Hugh Hendry was firmly in the deflation camp but I get the feeling that he is now opening up to high-inflation possibilities. Otherwise, his stance appears to be similar to past opinions.

Sunday Spectacle CL

Blog updated at 4:31 AM, Nov 27 2011 Sovereign Credit Ratings Interactive Map note: ratings may not be the very latest so double-check official ratings; also note that the Moody's chart has an additional category ("substantial risks") so the colours for the worst categories aren't the same on all three maps. Click here for interactive map from Moody's S&P Fitch (source: " How Moody's, S&P and Fitch Rate Each Country's Credit Rating ," ChartsBin. Downloaded November 20, 2011).

Jim Chanos' latest thoughts

Twenty minute Bloomberg video of esteemed short-seller Jim Chanos' latest views on USA, China and the current state of affairs. This is sort of like beating a dead horse—at least on this blog—but I think China is an important story if you aren't bearish like me. NOTE: Bloomberg video has a flaw and the video starts playing automatically for some unexplainable reason.

Articles for a November

I just joined Twitter and I can see how people's identities can be co-opted by others. I remember once when Malcolm Gladwell responded to someone asking about a comment of his on Twitter, that he doesn't even have a Twitter account (the point being that whoever that was tweeting using his name was a fake account). It's really hard to tell who is real and who isn't. This isn't a problem for no-name people but it's hard to tell with prominent individuals. Twitter does appear to verify some identities as authentic—for instance, Bill Gates is easy to find and follow —but I'm not sure if the user has to pay for this or not. In any case, it's an interesting world on Twitterland. It is also easy to fall prey to information overload. Having said all that, here are some articles you may find worthwhile reading... " The End of Borders and the Future of Books " (Bloomberg Businessweek): I can't believe William Ackman wanted to merge Borders and B

How good was Bill Miller?

In my prior post on Bill Miller , a reader, McMath , posted a link to a chart at Economicpicdata that appears to make Bill Miller look worse than he actually was. The author at that blog picked some time around 1986 as the starting point and I feel that it misrepresents Miller's career. Since I'm probably the only remaining fan of Bill Miller ;), I thought I would post what I think is Bill Miller's lifetime performance. I am reproducing below, a Morningstar chart for the Value Trust mutual fund (LMVTX) since 1982. Morningstar is very good with their mutual fund data (unlike, say, Yahoo! Finance) and typically computes real returns properly. I believe Bill Miller started managing the fund in 1982 but it is not clear how much of the stockpicking was solely up to him in the early days. I really don't know and am ascribing all the performance to Miller. Furthermore, I am not sure if the chart below includes expenses (MER). I suspect it does, since Morningstar is very g

Why do European companies have higher leverage? Anyone know?

I don't have the answer to the question of the blog post, so does anyone have any idea why European companies tend to have higher leverage than American companies? I remember noticing this when I briefly looked at US-listed European companies a few years ago. This is just one example and one should be careful with extrapolating off one example but, just compare a company like Diageo (DEO) to Brown Forman (BF/B). In any case, the leverage issue is starting to pop up in news these days because European banks tend to have higher leverage than American companies. In an opinion piece for Bloomberg, Simon Johnson remarks  (bolds by me), By any measure, Deutsche Bank is a giant. Its assets at the end of September totaled 2.28 trillion euros (according to the bank’s own website ), or $3.08 trillion. In the latest ranking from The Banker, which uses 2010 data, Deutsche was the second-largest bank in the world by assets, behind only BNP Paribas SA. The German bank, however, is thinl

Opinion: Thoughts on Bill Miller's Exit

Although I don't post much these days, I do follow business/investment news and Bill Miller, CIO at Legg Mason Capital Management, will retire from managing the main value fund. Legg Mason grew from a no-name Boston shop to one of the largest mutual funds, largely due to Bill Miller. He had a strong streak back in the 90's but ended up performing poorly, with near-catastrophic bets on financials, over the last 5 years. A lot of people don't like Bill Miller—some "value investors" don't consider Miller as a true value investor—but I was, and still am, a fan of him. In addition to Marc Faber, Warren Buffett, Charlie Munger, and David Dreman (at least his book), Bill Miller was one of the key investors who influenced me during my "formative" early years. I suspect what influenced me in the last 5 or so years—good as well as bad habits and knowledge—will probably, permanently, shape my future. Although I was a fan of Miller, I don't think he is

Sunday Spectacle CXLIX

In Defense of Cash Performance during Severe Inflation & Deflation (source: " A Value Investor's Perspective on Tail Risk Protection: An Ode to the Joy of Cash ," James Montier, GMO. June 27, 2011)

Finally joined Twitter (name Sivaram_V)

(This post is cross-posted on multiple blogs) I finally decided to leave the cave I was living in ;) and decided to join Twitter. When Twitter first showed up on the scene a few years ago, I thought it was some dumb twittering bird that amounted to nothing more than a fad. Who would have thought that short messages, when long messages have near-zero cost on the Internet, would become popular? It also wasn't clear how Twitter would make money and stay in business as it scaled up. Well, needless to say, I was wrong — very wrong! I'm still not sure if anyone will bother to follow anything I say. In any case, the main reason I joined was to track others. I notice that more and more content, whether from individuals, bloggers, or online magazines are "announced" on Twitter. It is much easier to follow things on Twitter than it is to visit each website, or use an RSS reader or something. I'm new to smartphones but a service like Twitter is also more efficient and q

Jim Chanos' Presentation from Value Investing Congress

Many of you probably already saw Jim Chanos' presentation from Value Investing Congress in October but I just got around to checking it out. Contrarians should definitely check out the presentation embedded below (Thanks to Jacob Wolinsky for bringing this to my attention .) James Chanos Presentation I thought I would pick off some key concepts put forth by Jim Chanos. The presentation isn't long but it contains some nuggets so read on if you are interested in my thoughts.

Sunday Spectacle CXLVIII

Interest Expense and Bond Recoveries for Distressed Countries (source: " A ‘haircut’ on Greek bonds? A buzz cut would look smarter ," The Globe and Mail. November 11, 2011.)

Preliminary look at Netflix (NFLX)

Netflix (NFLX) has been in the news lately, and given its steep fall in its stock price, I thought I would take a look at it. This is an early look, focused on its business model. For those not familiar, Netflix is a US-based distributor of television and film content. It became the dominant DVD-by-mail rental service in the US, and has been transitioning into the online streaming business. Netflix used to be a "growth story" over the last few years, and favoured by growth and momentum investors. It rose more than 900% within just the last 3 years but has had a spectacular fall this year: As a contrarian, I became interested given its steep fall. The stock is off given poor results and some strategic mistakes by management.

Sunday Spectacle CXLVII

Greek Tragedy*? Or is it Comedy? (source: Kal's Cartoon , The Economist. Nov 5, 2011.) *GREEK TRAGEDY : Like tragedies in general, a Greek tragedy is a serious play where there are a series of misfortunes. Greek tragedy in particular features masked actors, one storyline set in one location and often many main characters will die at the end of the play... (source: (partial quote) English Literature Dictionary . ITS Tutorial School.)