Can Turtles Fly?

GM just re-emerged from bankruptcy and the IPO looks to have been quite successful. From The Globe & Mail (comments in square brackets by me): They all contributed to what was perhaps the most successful sale in the 102-year history of the company as its new shares began trading Thursday. Investors snapped up 452.6 million shares in the reborn auto maker, none of which carried a rebate, an interest-free loan or even a set of floor mats. The shares rose 4 per cent, or $1.19, to $34.19 on the New York exchange [IPO price was $33]. ... The U.S., Canadian and Ontario governments and the United Auto Workers will all retain a stake in GM for now, but the U.S. government reduced its ownership to a little more than one-third through IPO. The three governments bailed out GM with about $60-billion worth of taxpayers’ money in 2009, with Canada and Ontario providing $9.5-billion of that. Chris Liddell, who was appointed GM’s chief financial officer after it emerged from Chapter 11 ba...

I think he is deserving of it—some won't agree—but it looks like Warren Buffett will receive the Presidential Medal of Freedom . Although awards of any sort are always controversial, given questionable recipients in the past, this is an important one. This is the highest civilian honour in the United States of America (the highest civilian award in Canada is the Order of Canada , although some seem to suggest it is the Order of Merit). You can't get anything higher unless you are in the military. Warren Buffett will be receiving the medal along with several other prominent individuals such as Yo-Yo Ma (artist), Bill Russell (basketball player), George H. W. Bush (former president), Angela Merkel (German chancellor), and a few others. Although some may disagree with awarding it to Warren Bufffett, I think it is an appropriate choice. If America represents capitalism, it is only fitting the greatest capitalist of modern times, Warren Buffett, receive the highest civilian hono...

I lean towards deflation, although I don't expect outright deflation* in a country like USA, so I always pay attention to one of the few deflationists around: Gary Shilling. Writing for MarketWatch, Paul Farrell, summarizes Gary Shilling's thoughts in his new book, The Age of Deleveraging. I haven't read any of Shilling's books but I do plan to get to them eventually—at the rate I'm going, it might take 249 years ;) Shilling has been somewhat of a deflationist for almost a decade and his call in the late 90's turned out to be wrong. Needless to say, no one can predict the future precisely. However, some of his correct calls were very significant calls, such as the bullish call on US Treasuries in the 80's. With that said, you will find below a Farrell's summary of Shilling's key calls. Most of the calls are similar to what Shilling has said in the past and as should be expected with a deflationist, it goes against the consensus (big time!). As ...

I was browsing Advisor Perspectives and I ran across a very insightful, long, article by Christian Thwaithes of Sentinel Asset Management . The author presents some observations of what he sees on the ground in China. I highly recommend it for anyone interested in China. What I find most useful about this article is that the author ties in basic observations into how business differs in China. Anecdotal stories can always be misleading but there are a lot of insightful tidbits in there. The author is clearly a China bull—reminds me of Jim Rogers or those fund managers you read in history books who were gushing over Japan in the 80's—but he does address some of the issues brought up by China bears.

source: " Citigroup Proclaims `Cult of Equity' Has Died: Chart of the Day ," David Wilson for Bloomberg. September 3, 2010

I ran across an article at 24/7 Wall St predicting 7 emerging, American, monopolies . I don't necessarily think they are all monopolies; neither do I think they are worth investing in right now. However, it may be worth thinking about these companies and consider investing in them during a stock market crash or a hard sell-off. Here are the companies they list along with some of author's comment. My thoughts are in square brackets in green: Netflix (NFLX): "Netflix is expected to have more than 19 million subscribers at the end of 2010. Its growth may explode in the coming years Back in April, Trefis Research predicted that it would eventually reach as many as 47 million subscribers. That represents 39% of US households with DVD players. Where Netflix wins is with its library of more than 20,000 titles and its flexible business model that accommodates streaming or DVD by mail." [Mail-order movie rental company poised to dominate the online movie rental market. This...

Thanks to The Big Picture for bringing this Jeremy Grantham interview to my attention. For those not familiar, Grantham is the founder and key strategist at institutional fund advisor, GMO, and I consider him to be a macro-oriented value investor. Jeremy Grantham is the only value investor that I have run into who is also macro-oriented. A good interview, I would say. You may want to read his quarterly letter released recently which is a good companion piece to this interview. Grantham thinks the market is overvalued and urges caution. He is bullish on commodities in the long run (10 to 20 years) whereas I'm bearish on them. He favours high-quality blue-chip companies and prefers emerging markets over developed markets in the medium term (around 7 years). He isn't a fan of the Quantitative Easing II that is being undertaken by the FedRes and thinks fiscal stimulus is the best solution right now. Unfortunately the US government is now likely to cancel any sort of stimu...