Chroma Investing » Investing Links

More James Montier via EuroshareLab

chroma — Fri, 08 Jul 2011 17:04:04 +0000

After reading my recent post on James Montier’s latest GMO white paper, Tim duToit of Euroshare contacted me and informed me of his resource page for all things James Montier. In my ongoing fandome of Montier I have included the link to James Montier resource page. Tim also has a page devoted to book recommendations by Montier. So visiting Tim’s site is a sort of two for one on Montier.

Here is a gem I found on a link to a January 2011 Bloomberg article I had missed. “U.S. Treasuries are among the most overvalued assets and investors buying them are poised to lose money,” Montier was quoted as saying. He goes on, “You are not compensated for the long-term risk of holding bonds.” If you love Montier or behavioral finance, check it out.

Chroma Investing Links July 2011

chroma — Wed, 06 Jul 2011 15:20:51 +0000

I haven’t posted recommended investing links in a while. But, first I wanted to highlight a couple of links that I have removed. Not because they aren’t worth your time but because the authors have shut down the sites or not updated to the point where it seems shut down. These include Valuehuntr.com (shut down), Thefallibleinvestor.com (not updated in over a year), Myvalueidea.blogspot.com (not updated in over 9 months). Publishing a value investing blog without any compensation can not be sustained over time, unless you really love it. Even then the demands of our vocations must be answered before the love of our avocation. I am sorry that these sites are done.

I would like to highlight the following investing sites:

Inoculated Investor- Ben runs a terrific site and I am surprised that I didn’t add his blog to my links earlier. Inoculated Investor has become my go to site for notes on Value Investment conferences or meetings that he attends.

Greenbackd.com- This is not a new recommendation, but it seems Toby has restarted posting again after a 6 month break. This is definitely one of my favorite blogs. I am excited that he has begun to post again.

Value Investing Links February 2011

chroma — Mon, 07 Feb 2011 04:38:30 +0000

I haven’t posted Investing links in a while. In the meantime I have discovered a couple of websites worth checking out.

Stock Spinoffs – The website does a good job of laying out stock spin off opportunities. I have recently reread Joel Greenblatt’s book You Can be a Stock Market Genius. In one of the chapter’s Greenblatt deconstructs past spin off deals he made and why they were good. If you haven’t read this book, just this section is worth the whole book. You must of course realize that most spin offs are not good deals, but that you need to find the right spin offs, but that is the way of value investing, finding the gems in the rubble.

Citron Research - This company is the opposite of sell side research with their relentless buy recommendations. Citron looks for potential short candidates, fraudulent or otherwise and then lays out their case. They do not disclose their positions, which would improve the site for me. I like website’s to disclosure their positions so I can follow the tone of their comments to their positions. So, I would verify all their information before making any investments. But it is a handy place to check for as a check against investing in a company

Alice Schroeder – Warren Buffett biographer- Interviewed

chroma — Tue, 02 Nov 2010 06:19:28 +0000

Miguel, my friend over at Simoleon Sense, a blog I have repeatedly recommended, has posted the first part of a multi-part interview with Alice Schroeder, the author of the Snowball, a biography of Warren Buffett. In the infinite questions that arise about a character like Buffett, Schroeder had unprecedented access to her subject before writing the biography. She seems to have really gotten under his skin so to speak. After reading the biography, I was left with the feeling that perhaps Buffett has some form of autism like Michael Berry’s Asperger’s Syndrome. I will leave that to other’s who are better at that sort of thing that I am.

You are in for a treat. Miguel is very good at interviewing people. This first part of the interview suggests that the interview will tread where other interviews have not. It discusses Schroeder’s background in insurance and how she became an analyst at Oppenheimer. I eagerly await the rest of the interview.

Value Investing Checklists

chroma — Sat, 30 Oct 2010 06:46:53 +0000

Monish Pabrai famously discusses the importance of having an investing checklist. While he has been coy about what is on his checklist, proprietary information or some such notion, Jae Jun over at Old School Value has shared his investing checklist with us. You can find his website (highly recommended) and his checklist here. I am not sure it is actually a checklist as much as a profile on how Jae invests. It is still valuable for thinking about what is is important in your investing process.

There is a fair amount of research that shows the value of checklists. I think they are valuable because help short circuit the human brain in a way that it wants to work against us. Namely, that our species is supremely overconfident. A checklist can remind us that we are not infallible, that we do make mistakes, and not to be too sure about our decisions. It is useful to begin to develop your own checklist for investing and Old School Value has given you a head-start.

A Few Lessons in Behavioral Finance

chroma — Tue, 23 Mar 2010 05:35:38 +0000

My Investing Notebook has a presentation called Confessions of a Value Investor: A Few Lessons in Behavioral Finance. I am ordinarily not a fan of looking at presentation, because it is easy to make incorrect conclusions without understanding the context or the point the author is trying to make. In this case, I think the presentation lays out some of the fundamentals of behavioral Finance, in a clear way. It is vital to understand where we can get in the way of our own investments. If you have no experience with behavioral finance this is a good introduction. Enjoy.

Reviewing Forecasters – The Guru Grade

chroma — Fri, 19 Mar 2010 04:18:34 +0000

After listening to the noise, er, Financial bobble heads, I have often thought, wouldn’t it be great if someone recorded what these idiots said and then held them to their predictions. Well it turns out their is a place that has at least partially granted my wish. It is called CXO Advisory Group (Yes, I know it is a very sexy name) and they have something they call the guru grade. To be honest I really wish they had this for economists, because my perception is that economists are more wrong (My Talebian influence coming through) than the gurus that are currently being measured, and just 14 out of 35 them have a 50% or better success rate. Obviously, I am not an economist. Feel free to bash the film business. I will probably agree with you.

CXO Advisory is not just Guru Grade. As described on their website they, “… present models, research summaries, analyses and reviews designed for objective, unique and concise value to serious individual investors and traders, financial advisors and fund managers – a modicum of actionable conclusions found in a very noisy environment. The default approach is to challenge any and all conventional market wisdom with analytical skepticism.”

They have research that suggests what works and doesn’t work, including technical analysis. This is an interesting value investing link, none the less.

Looking Outside to Get Inside

chroma — Thu, 18 Mar 2010 05:12:29 +0000

One of the things about the pursuit of knowledge, is that it is satisfying for its own sake. I have found that you can often find useful information, or perspectives in other disciplines. One of my new favorite blogs Psy-Fi is the kind of place that opens your mind to other perspectives, but then circles around in the behavioral Finance tradition. Or as their log line says, “a Sideways look at Psychology and Finance.” The latest post is just such an example where the author discusses a conflict within evolution and how that, loosely relates to finance. Does it get any cooler than that? The blog is very well written, thoughtful and insightful in ways that transcend the daily craziness that is often the investing world. If you have not checked the blog out, do yourself a favor and correct course.

Simoleon Sense interviews James Montier

chroma — Tue, 09 Mar 2010 01:33:06 +0000

My friend Miguel at Simoleon Sense has conducted another one of his terrific interviews. This time it is with James Montier, who is always someone worth listening to. I have written previously about Montier’s perspectives before. You can check out Montier bitch slaps EFH or Good Decisions, Bad Outcomes. He hails from the behavioral Finance camp, which it is safe to say, the right team to be on.

I think he gets investment risk better than any one. I will quote two passages, the first lays it out, “Modern risk management is a farce; it is pseudoscience of the worst kind. The idea that the risk of an investment, or indeed, a portfolio of investments can be reduced to a single number is utter madness. In essence, the problem with risk management is that is assumes that volatility equals risk. Nothing could be further from the truth.”

The second is where he talks about his trinty of risk which I would like to devote a whole post to in the near future, “…I don’t think of risk as a number, but rather as a permanent impairment of capital (as Ben Graham put it). Now that permanent impairment can be generated by three potential sources (which aren’t mutually exclusive). Firstly, there is valuation risk – you can simply overpay for an asset. Secondly, there is fundamental or business risk – something goes wrong with the underlying economics of the asset. Thirdly, financing risk or leverage (which no matter how hard you try can’t make a bad investment good, but can make a good investment bad).

I’m not sure that any of them is easier or trickier to monitor. I think you to consider all three aspects in order to gain a holistic view.”

Enjoy the first part of the interview.

An aid to Empirical Finance Research

chroma — Tue, 02 Mar 2010 04:37:14 +0000

I am a fan of empirical evidence that supports investing strategies. This sounds like an obvious statement, but many people don’t care, or at least that is how seems if you view their actions. I have previously highlighted evidence that could potentially enhance returns like Low price to book, and help protect against loss like the Altman Z score.

I have discovered a blog that sifts through Finance Studies to look for papers that can help with investing. The blog is called the Empirical Finance Research Blog. While it may sound dull, it is actually a terrific resource. The writer reviews financial papers and then evaluate them for practical investing on a scale of 1 to 10, 10 being the best. He also lays out his proposed investment strategy based on the research. One of the best aids I have found. I have one complaint. And it is selfish. The blog posts irregularly. His last post was from January.

Chroma Investing » Investing Links

More James Montier via EuroshareLab

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Chroma Investing Links July 2011

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Value Investing Links February 2011

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Alice Schroeder – Warren Buffett biographer- Interviewed

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Value Investing Checklists

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Simoleon Sense interviews James Montier

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