Robert A. Haugen passed away Sunday, January 6, 2013 and I did not discover that until now. Haugen is perhaps best known for his book The New Finance in which he summarized important academic studies that proved that markets were not efficient all of the time and that its inefficiency could be exploited by value investors. Haugen then made the following analogy with respect to the… Continue reading
Jason is correct that many investors who place their capital with value investing firms will not stay with the firm long enough through multiple cycles in order to capture the value premium. Paradoxically, that is part of the reason that the value premium exists; when many abandon the strategy for greener pastures, such as now when markets rise regardless of fundamentals, it actually creates opportunities for patient, disciplined value investors… Continue reading
According to behavioral finance theory, Loss Aversion causes investors to sell winning investments quickly in order to “lock in” gains and to hold on to losing investments in order to get even, regardless of the underlying fundamentals, changes in circumstances, or overall merits of each investment. University of Chicago researchers have discovered that we lessen Loss Aversion’s affects when we think in a foreign language.
The… Continue reading
..these are the keys to investment success, not throwing capital at 500 companies merely because those companies are in somebody’s index… Continue reading
The former Ben Graham employee is still kicking, but has half of his money in cash. “He reads voraciously every day…especially about science.” Man after my heart.
“Individual investors who avoid ‘doing things you know too little about’ still stand a decent chance of outperforming professional investors.”
How true.
http://online.wsj.com/article/SB10001424127887324731304578193323337104806.html
It may never be a worse time to be a discerning investor–one that Ben Graham would call an “Intelligent Investor”–thanks in large part to another Ben. One can be diligent, do everything correctly, and make accurate assessments of a company’s value, only to see all of that hard work become worthless at the drop of a hat because of the decisions of government officials.
A trader/investor maxim used to… Continue reading
If anyone tells you that they can make accurate predictions, hold on to your wallet.
One of my firm’s most important practices in investing is to actively ignore most of the noise emanating from strategists and analysts. Most strategists predict the future of the economy or asset classes. Most analysts predict the future of earnings and such. The noise is everywhere, so it requires investors to be active about ignoring it… Continue reading
Canada cuts ties with Iran, closes embassy, orders Iranian diplomats home.
It looks like we need to reach a conclusion on the consequences of an Israeli attack sooner than I thought… Continue reading
What would happen in western financial markets if Israel bombed Iranian nuclear sites? That is something we should be thinking hard about… Continue reading
Full disclosure: I have a modest short position in LNKD.
LinkedIn (LNKD) announced that they met Thomson Reuters analysts’ expectations for earnings at $0.16 per share this quarter. In addition, second quarter revenue at $228.2 million, beat analysts’ expectations of $215.7 million. The stock is currently up over 12% on that news.
Then there is the pesky bit about profits and cash flows; you know… Continue reading
