Wednesday links: low yield conundrum

Why are government bond yields so low?  (Mandel on Innovation and Growth also Trader’s Narrative)

Would a stock split move Apple (AAPL) stock higher?  (A Dash of Insight)

Commodities had had a rough start to the year.  (StockCharts Blog)

Another oversold metric.  (VIX and More)

A very long run view of the stock market.  (Crossing Wall Street)

What you exclude from an index may be just as important as what you include.  (Random Roger)

Japan is ripe with stocks trading below liquidation value.  (The Source)

A sector momentum strategy is less reliable than previously believed.  (CXO Advisory Group)

Can you guard your personal finances against the costs of higher deficits?  (ROI)

Why a buy and hold investment strategy may be the least worst option.  (The Psy-Fi Blog earlier Abnormal Returns)

What Dow Chemical (DOW) is telling us about the global economy.  (Value Plays)

Beware Russians bearing IPOs.  (DealBook)

Some REITs now have the problem of having too much cash.  (WSJ)

The chances of homeowners walking away from their mortgages increases as negative equity rises.  (Calculated Risk, naked capitalism)

Disentangling the many causes of the mortgage/financial crisis.  (Big Picture also DJ Market Talk)

Goldman Sachs (GS) and Morgan Stanley (MS) will be able to evade the Volcker Rule.  (naked capitalism, Felix Salmon)

Round 2 of the AIG bonus controversy.  (WashingtonPost, DealBook)

The Fed quietly ends some of the lending facilities launched in the midst of the crisis.  (Real Time Economics)

A scary chart depicting subprime mortgage loss severity.  (Alea)

Core inflation measures are falling even though few believe it.  (Economist’s View)

Jim Chanos on the “malinvestment” problems in China.  (Credit Writedowns, designing better futures)

Michael Pettis, “The idea that massive levels of reserves are a guarantor of economic stability is, in other words, based on a profound misunderstanding both of history and of the nature of reserves.”  (China Financial Markets)

Findings from the inaugural ‘Economic Outlook: A Quarterly Survey of Top Economics Bloggers.’  (Kauffman Foundation)

An interview with Ed Thorpe.  (Infectious Greed, The Pragmatic Capitalist)

More on the online brokerage price wars.  (WSJ, 24/7 Wall St., Bucks)

Free ETF trading is not a boon to investors.  (IndexUniverse earlier Abnormal Returns)

Some resources for those of you interested in “piggyback investing.”  (New Rules of Investing)

A spreadsheet analyzing the profitability of the Oscar nominees.  (WSJ)

Abnormal Returns Now is the real-time component of this site.  Check it out.


Tuesday links: missing micro-caps

Richard Ferri, “What is the problem with micro-cap index funds and ETFs? The problem is that there are no true micro-cap index funds or ETFs. They don’t exist.”  (Forbes)

Fidelity’s lower commissions and commission-free trades in 25 iShares ETFs advances the online broker price war.  (Marketwatch, ETF Trends, Morningstar)

What is the “third generation ETF platform“?  (FT Alphaville)

Another oversold reading for the stock market.  (Bespoke)

Hedge funds had a quiet January.  (FINalternatives)

Ten largest hedge funds of 2009.  (HedgeCo.Net)

Mixed results from a couple of economic bellwethers.  (MarketBeat, DealZone)

Is Norway risking an asset bubble?  (Money Supply)

Has China switched from bull to bear?  (The Pragmatic Capitalist)

Australia decides to hold rates steady.  (FT Alphaville also Mish)

“Can one devise a way of spotting those countries which are most at risk from a debt crisis?”  (Buttonwood)

Investor misreaction to crises, not economic fundamentals, appear to drive stock return predictability.” (CXO Advisory Group)

Ten year venture capital returns continue to slide.  (TechCrunch, techblog)

Roy Smith, “We need to do something about firms that are too big to fail. These firms have become loss transmitters and accelerators to the rest of the system.”  (Time)

The FHA has got itself a bit of a delinquency problem.  (WashingtonPost)

Home ownership rates are down to levels last seen in 2000.  (Calculated Risk)

Comparing US and EU unemployment rates.  (EconomPic Data)

Large pharmaceutical companies can shrink only so much.  They now need new financial and scientific models.  (Atlantic Business)

The madness behind the Tesla IPO. (The Big Money)

How are we going to charge of these new electric vehicles?  (Economist)

What is “cognitive fluency“?  (Street Capitalist)

An online finance wishlist.  (New Rules of Investing)

Good reason to wait for iPad version 2.0.  (TechCrunch)

Hedge funds got crushed by the problems at MGM.  (Gawker)

Oscar nominations announced.  How Oscar campaigns work.  (IMDB, WashingtonPost)

Talk about a lost decade.  The music industry saw its sales get cut in half in the past ten years.  (CNNMoney)

The debate over multi-tasking, attention, laptops and the classroom.  (Chronicle of Higher Education)

Giant squid=lower calamari prices.  (The Reformed Broker)

Your coffee sucks.  (DailyFinance)

Abnormal Returns Now is the real-time component of this site.  Check it out.


Monday links: nuanced returns

Where’s the bubble:  bonds or equities?  (Big Picture)

The junk phase of the rally is over.  What next?  (The Reformed Broker)

2010 will be a year of “nuance” in asset class returns.  (Capital Spectator also Investment Postcards, EconomPic Data)

How much stock should we put into the small cap effect?  (MarketSci Blog also New Rules of Investing)

The bulls are nominally still in charge in the US equity market.  (Investment Postcards)

By this measure the correction has more to go.  (Big Picture)

February has not been that a great a month for the Dow historically.  (Bespoke)

Does sector performance have anything to do with happens in January?  (Kirk Report)

The market’s mood turned in January.  Is that an opportunity?  (Mean Street)

One year of the iPath S&P 500 VIX Short-Term Futures ETN (VXX).  (VIX and More)

Why the CME Group (CME) should buy the Dow Jones index business.  (MarketBeat)

Check the spreads on an ETF before trading.  (WSJ)

What implied volatility tells us about future returns.  (CXO Advisory Group)

On the link between preparation and performance.  (TraderFeed)

Disentangling the effects of a CFA or MBA on investment performance.  (SSRN)

Finally some one found a bull on the economy and markets.  (Clusterstock)

Will merger arb hedge funds benefit from a pick up in MA& activity?  (All About Alpha)

UK and US natural gas prices diverge.  (FT Alphaville)

Will Goldman Sachs (GS) thumb its nose at the government by paying Lloyd Blankenfein $100 million?  (naked capitalism, Deal Journal, Felix Salmon, Dealbreaker)

Is private equity consolidation coming?  (WSJ)

Traders are fleeing the Euro.  (The Money Game)

Are Greek bonds the new subprime?  (MarketBeat)

Obama plans a $3.8 trillion budget. (WashingtonPost)

Confusion reigns as the deficit continues to balloon.  (24/7 Wall St., Atlantic Business, Rolfe Winkler)

“The financing backbone of the American mortgage market has effectively been transferred from the banks to the government.”  (FT Alphaville)

“The British screwed us,” Henry Paulson stated in regards to the British stance on a Lehman Brothers rescue.  (WSJ also Clusterstock, DealBook)

CIA agents are moonlighting for major financial institutions.  (Politico also Farnham Street)

Katie Fehrenbacher, “If investors actually respond positively to Tesla’s public offering, to me, it will mean that in this media-saturated day and age, branding is truly everything.”  (earth2tech)

A new monthly options magazine from the blogosphere’s best options bloggers.  (Expiring Monthly)

Take journalist’s stock picks with a big grain of salt.  (The Big Money)

The “disposition effect” shows up in NFL betting markets.  (SSRN)

The e-book business is getting all shook up.  (NYTimes, GigaOM, Tech Trader Daily)

Abnormal Returns Now is the real-time component of this site.  Check it out.


Sunday links: January hangover

The market pullback is getting a bit nasty.  (VIX and More)

The so-called January indicator in perspective.  (dshort)

The state of investor sentiment at week-end.  (Trader’s Narrative, The Technical Take)

Your equity portfolio allocations are all off.   (WSJ)

In praise of home bias.  (Aleph Blog)

Why are so many companies hoarding cash instead of paying out dividends?  (Barron’s)

Some much needed perspective on what it takes to become a successful trader.  (SMB Training)

On the need for and benefits of a trading sabbatical.  (Abnormal Returns)

A look at Whitney Tilson’s larget positions (long and short).  (market folly)

Why exactly is Warren Buffett buying Burlington Northern.  (Contrarian Edge)

Who is going to buy the Dow Jones index business?  (New Rules of Investing)

How your political leanings may affect your investing.  (NYTimes)

A closer examination of the intended and unintended consequences of leveraged and inverse ETFs.  (SSRN)

More reactions to the 4Q GDP estimates.  (Fundmastery Blog, Calculated Risk, Bespoke, Economist’s View, Atlantic Business)

According to ECRI the recovery is humming along.  (The Pragmatic Capitalist)

The Restaurant Index turns higher in December.  (Calculated Risk)

Robert Shiller, “In reality, business recessions are caused by a curious mix of rational and irrational behavior. “  (NYTimes also Economist’s View)

The laws of supply and demand at work in the housing market. (Floyd Norris)

No matter how you look at it the deficit picture is ugly.  (The Money Game)

Is the “Build America Bonds” program becoming permanent?  (WSJ)

A story of cynicism and institutional failure in corporate America.  (Chris Dixon also The Reformed Broker)

Tesla Motors files for an IPO.  (24/7 Wall St. also DealBook, Deal Journal)

Kevin Kelleher, “After 15 years, the evidence is pretty clear. The web is just not a part of Microsoft’s DNA.”  (GigaOM also The Reformed Broker)

Why are so many people, so interested in reading about Apple (AAPL)?  (MarketBeat)

Peter Kafka, “Apple has yet to sell its first e-book, but it is already engaged in a bruising battle with Amazon for control of the market.”  (All Things D)

How investors can combat confirmation bias.  (The Psy-Fi Blog)

Felix Salmon talks with Nouriel Roubini.  (Reuters)

Geography is destiny when it comes to Europe’s “alcohol belts.” (Strange Maps)

Abnormal Returns Now is the real-time component of this site.  Check it out.


Trading sabbaticals

An investment in knowledge pays the best interest. - Benjamin Franklin

Have you ever taken a structured break from your trading, not unlike that of an academic sabbatical?

For some one who spends their time tracking and trading the markets it seems like there is never enough time to do the reading and research necessary to advance one’s trading knowledge.  In this situation stagnation, or burnout if you like, is a likely outcome.

This was point was driven home this week when we read that El Bulli, the famed Spanish restaurant known for its widely creative cuisine announced it was going to close in two years time.  The chef/owner Ferran Adria plans to take time to re-balance his life, invest in R&D and find new ways of doing business.  (Matt Goulding in the Wall Street Journal has an interview with Adria.)

Most people would agree that cuisine as practiced by the likes of Adria is a highly creative endeavor.  We would argue that same thing could be said about trading as well.  However the relentless desire to be in front a trading screen can detract from the time needed to have some balance in one’s life and generate some measure of creativity.

Where one looks for that regeneration is a highly personal decision.  Academics take sabbaticals to study, write and sometimes teach.  For some it may mean physically going some place else.  For others it may mean holing up with a stack of books, or Kindle, you have been neglecting. The point being that traders are unlikely to do their best thinking in front a bank of monitors.

If Ferran Adria can close El Bulli, which has been named the best restaurant in the world by Restaurant magazine for four years in a row, you can take a few days away from trading to as Benjamin Franklin puts it to “invest in knowledge.”


Friday links: rich fund, poor fund

Equity fund managers are asset rich and cash poor.  (Sentiment’s Edge)

A historical review of equity allocations.  (Big Picture)

What happens when the S&P 500 goes from a 50 day high to a 50 day low in 8 days.  (Quantifiable Edges)

The S&P 500 Material Sector (XLB) is decidedly oversold.  (Bespoke)

You can’t chart the VIX like you would a stock.  (OptionsZone also Daily Options Report)

Nick Gogerty, “Checklists are not sexy, but their results are.”  (designing better futures earlier Abnormal Returns)

It’s once again a long/short market.  (Leigh Drogen)

What is noted value investor Bruce Berkowitz buying and selling these days?  (Street Capitalist)

On the relationship between corporate bond spreads, distress and equity returns.  (SSRN)

Charles Kirk, “After all, opinions don’t pay the bills but making good trades do and many times the best decisions will be made that go directly against the vast majority.”  (Kirk Report)

David Merkel, “Are we the double-down society as far as investing goes?”  (Aleph Blog)

Great rant (and follow-up) by Dr. Brett.  (TraderFeed, ibid)

Goldman Sachs (GS) isn’t going private any time soon.  (Fortune)

If the big investment banks are tired of the scrutiny, maybe they should “..shrink their balance sheets, replace government-subsidized debt with market-rate debt, stop relying on the Federal Reserve for funding, and get out of our index funds.”  (Slate)

Given bonus restrictions bankers are now getting paid in many more “flavors.”  (WSJ)

4Q GDP comes in ahead of expectations.  (WSJ, Calculated Risk, EconomPic Data, Economist, Econbrowser)

The best economic gauge you’ve never heard of.  (Big Picture)

Why 2010 is unlikely to see a fed rate hike.  (Econbrowser)

Benanke confirmed.  (WashingtonPost)

What does the UK actually do?  (Financial Crookery)

Switzerland is trying to lure UK bankers.  (DealBook)

China has been bending the laws of economics for some time now.  Is the run over?  (Contrarian Edge)

Has a price war broken out in online trading?  (Barron’s)

Who will buy Netflix (NFLX)?  (Deal Journal)

John Gruber, “The mobile computing landscape is in land-grab mode, and Apple is trying to stake out a long-term dominating position.”  (Daring Fireball also Technologizer)

The real reason the Apple iPad will be a success.  (Ultimi Barbarorum, ibid)

Are AT&T (T) and Verizon (VZ) the best way to play the iPad?  (ROI)

The New York Times (NYT) does not have high hopes for revenue gains from a pay wall.  (Felix Salmon)

Measuring the returns on art.  (CXO Advisory Group)

A special report on social networking.  (Economist)

Abnormal Returns Now is the real-time component of this site.  Check it out.


Thursday links: breaks and BRICs

Two notable breaks of the 200 day moving average:  the US Dollar Index and China’s Shanghai Composite Index.  (Bespoke also Trader’s Narrative)

The BRICs are falling by the wayside.  (Barron’s also Behind the Headlines)

Where this pullback ranks during this market upswing.  (VIX and More)

Jeremy Grantham’s “Lessons Learned in the Decade.”  (Big Picture)

On the relationship between earnings surprises and discount rates.  (CXO Advisory Group)

Tom Brakke, “Consciously looking for the other side of things should be an integral part of your decision processes.”  (the research puzzle)

Economics and markets are not like chemistry.”  (Buttonwood)

Brett Steenbarger, “The wise trader seeks positive risk-adjusted returns, not just large returns on capital.”  (TraderFeed)

The past year was not kind to university endowments.  (BusinessWeek)

The Fed has an “asset-liability mismatch.”  (FT Alphaville)

Tim Duy, “I find it inconceivable that the Fed would be keen on normalizing rate policy without a substantial decline in unemployment, absent of course an unexpected surge of inflation.”  (Economist’s View)

In defense of Tim Geithner.  (24/7 Wall St.)

This labor recession is like no other.  (Economist’s View)

Taking a look at what happens to the economy and stock market after a housing bust.  (The Money Game)

The Apple iPad:  a FAQ.  (Tech Trader Daily, Gizmodo, Technologizer)

John Gruber, “Apple now owns and controls their own mobile CPUs. There aren’t many companies in the world that can say that.”  (Daring Fireball)

The Apple iPad is more disruptive than it looks at first glance.  (The Big Money, Marketwatch, Economist)

The Apple iPad= a big iPod Touch or Newton for that matter.  (Minyanville, peHUB, Gizmodo, All Things D, Silicon Alley Insider, Cringley)

The Apple iPad is truly something new.  We just don’t know what yet.  (David Pogue, Marginal Revolution, DJ Market Talk)

What effect will the iPad have on the Kindle?  (Bits, ibid)

How Bloomberg LP keeps making money.  (Gapper Blog)

Interesting discussion with Herb Greenberg.  (Howard Lindzon)

Abnormal Returns Now is the real-time component of this site.  Check it out.


Wednesday links: zero yields

S&P 500 sector performance over the past three decades.  (Big Picture, EconomPic Data)

The time for small cap outperformance is coming to an end. (Marketwatch)

The last week put a big dent in the number of bulls out there.  (Sentiment’s Edge)

The first three days of the month have a disproportionate effect on stock market returns.  (Crossing Wall Street)

Hold your nose and buy the stocks of less admired companies.  (CXO Advisory Group)

Time for the dispersion trade.  (Daily Options Report)

Keep an eye on the “5yr5yr breakeven” TIPS-derived inflation rate.  (WSJ)

Zero is not the loneliest number when it comes to Treasury auctions.  (FT Alphaville)

The physical platinum and palladium ETFs (PPLT and PALL) have taken off. (TheStreet also ETF Database)

Dave Nadig, “Yes, ETFs have arrived. Let’s hope they survive the hype”  (IndexUniverse)

Robert Shiller on how to diagnose a nascent bubble.  (DealBook)

Berkshire Hathaway (BRK-B) soars on news it enters the S&P 500.  (MarketBeat also Bespoke)

Larry Ellison of Oracle (ORCL) isn’t afraid to expand in the face of an economic downturn.  (WSJ, NYTimes)

An unprecedented comeuppance for Toyota Motors (TM).  (WSJ, 24/7 Wall St., The Big Money)

Has high frequency trading become a crowded trade?  (Traders Magazine)

Pension funds want to use leverage to boost returns.  (WSJ, Manual of Ideas)

John Bogle, “The financial industry gets paid before their clients, and we get paid whether times are good or bad.”  (DealBook)

Tim Geithner is not playing from a position of strength.  (Big Picture, Economist’s View)

The AIG-Goldman Sachs-NY Fed story just keeps getting worse.  (Huffington Post)

Will the “Volcker Rule” do anything?  (Economix also Don Fishback)

Insure depositors, not banks.  (Interfluidity)

US fiscal and monetary policy is nothing if not “incoherent.”  (Atlantic Business)

Are we approaching the “true panic stage of the economic cycle“?  (The Business Insider)

The coming “lost decade” for housing.  (WashingtonPost)

Housing inventory still has a long way to go.  (Calculated Risk)

New home sales are going nowhere fast.  (24/7 Wall St.)

Should China be worried about inflation?  (FT Alphaville, The Money Game)

Given all the talk about the failure of Chicago economics you would think they had more people in the halls of power.  (Economics One)

What Manchester United tells us about the world of leveraged buyouts.  (Telegraph)

On the suburbs and the “unsustainable nature of the automobile complex.”  (Gregor Macdonald)

What a “cloud computing” ETF might look like.  (The Reformed Broker)

Apple (AAPL) is falling behind in the “Web/cloud.”  (Time)

Looking for free financial data?  (World Beta)

Two blog heavyweights sit down to talk.  (Howard Lindzon)

The real-time web for investors is still in its infancy.  (DailyFinance also Talking Biz News)

The ultimate round-up of themes for 2010.  (Kirk Report)

In social media circles how many followers is “too many”?  (Wired via peHUB)

Another myth debunked.  The restaurant business isn’t as brutal as many believe.  (BusinessWeek)

Abnormal Returns Now is the real-time component of this site.  Check it out.


Tuesday links: news reading machines

Was it really a “lost decade” for investors?  Rob Arnott begs to differ.  (IndexUniverse)

With the carry trade on the backburner have fundamental reasserted themselves?  (The Reformed Broker)

Why next month might be better for the market.  (James Altucher)

By this measure the US stock market is short-term oversold.  (Trader’s Narrative)

What is the “Andrews Pitchfork” and what does it say about the current market rally.  (VIX and More)

The latest from Jeremy Grantham and it is not all that constructive for the equity market.  (The Pragmatic Capitalist)

Is it finally an opportune time to short the long bond?  (Chart.ly Blog)

David Merkel, “Good companies don’t report earnings in excess of what shareholders obtain, and they don’t buy back stock except when it is cheap.”  (Aleph Blog)

At least against the Euro, the US dollar isn’t doing all that badly.  (Crossing Wall Street)

Why intraday trading is so difficult:  “markets change their behavior faster than people can change their minds.”  (TraderFeed)

Should we fear the rise of “news reading machines” and their role in automated trading strategies?  (FT Alphaville)

There is always a bull market somewhere.  Sugar hits a nearly three decade high.  (WSJ)

The UK is a “must avoid” according to Bill Gross given its inclusion in the “sovereign debt ring of fire.”  (FT Alphaville, The Money Game, MarketBeat)

How the war on banks turned into a windfall for Goldman Sachs (GS) executives.  (Bespoke)

On the relationship between equity risk and the slope of the Treasury yield curve.  (SSRN)

You have to sell a lot of Porsches to pay a potential $1 billion judgment.  (DealBook)

Bernanke is likely to get reconfirmed as Fed Chairman.  Which begs the question why does he want the job?  (WashingtonPost , Rational Irrationality)

What effect would a discretionary spending freeze have on the economy?  (Economist’s View, Megan McArdle)

Does the world still need a “global sheriff of finance“?  (NYTimes)

At one time Standard Oil was too big to break-up.  Time for the big banks to shrink.  (Rolfe Winkler)

More bad news on the budget deficit front according to the CBO.  (24/7 Wall St.)

CPI is understated…by a lot.  (Simoleon Sense)

Mixed November Case-Shiller home price news.  (Calculated Risk, ibid)

Is a sustained rise in consumer confidence finally taking hold?  (Atlantic Business)

The UK emerges from recession, albeit tentatively.  (WSJ, Economist)

Wind power had a big 2009.  (Money & Co.)

Is the US finally going to get a 21st century rail system?  (WSJ)

College freshmen are abandoning business as a major.  (Inside Higher Ed)

No Facebook IPO this year.  (Silicon Alley Insider)

TheStreet.com (TSCM) no longer trades below cash on the balance sheet.  (Tech Trader Daily, ibid)

A big picture look at the competition between:  GOOG vs. MSFT vs. YHOO vs. AAPL.  (Bits)

Daniel Gross talks with John Gillespie author of “Money for Nothing” on the awful job corporate boards are doing. (The Big Money)

The econoblogosphere is buzzing about “Fear the Boom and Bust:  a Hayek vs. Keynes Rap Anthem.”  (Econstories.TV)

Abnormal Returns gets even better.”  (Felix Salmon)


Monday links: Tablet talk

Anything fixed income is winning the YTD performance race.  (EconomPic Data)

The bull market in Treasuries is dead and buried. (Gregor Macdonald)

What to do if you were caught unawares by the recent market pullback.  (CSS Analytics)

Investors seem to have already factored in better than expected earnings.  (Bespoke)

Underlying weakness in the iShares FTSE/Xinhua China 25 Index (FXI).  (VIX and More)

MSCI (MXB) has profited handsomely off of the index/ETF boom.  (WSJ)

Seven surprising ETF turnover statistics.  (ETF Database)

Not all ETFs, even those tracking the same index, are created equally.  (WSJ)

Are covered-calls all they are cracked up to be?  (Options Zone)

How to listen to stock analysts.  (Falkenblog)

Stocks vs. farmland as an investment.  (U of l via @CMEGroup)

How to play inflation by Howard Marks.  (market folly)

Up close and personal with Warren Buffett.  (Jeff Matthews)

Talk about jingle mail.  The biggest foreclosure in history.  (The Reformed Broker)

What happens to the housing market when the government begins pulling back its support?  (WashingtonPost)

The US auto industry is now in permanent decline.  (The Money Game)

Who knew the fight over Bernanke’s re-nomination was going to get so heated?  (WSJ)

In defense of Ben Bernake.  (Economix)

A Q&A with Simon Johnson on financial reform.  (Atlantic Business)

Not every one at the Fed agreed on the AIG bailout.  (DealBook)

Are mass layoffs coming back?  (24/7 Wall St.)

Residential investment will not help the US economy for quite some time.  (Calculated Risk)

Positive economic surprises are falling by the wayside.  (The Money Game)

On the importance of automatic stabilizers.  (Mark Thoma)

Now that is a secondary offering.  Bank of China plans to issue some $30 billion in shares.  (WSJ also The Money Game)

Why hasn’t there been more fallout from Greece?  (FT Alphaville, Bloomberg)

Whitney Tilson on “cribbing investment ideas from the best.”  (Kiplinger’s)

How to calculate a return on investment.  (A VC)

Is the Apple Tablet story now overbought?  (Howard Lindzon)

Some bets on the new Apple Tablet.  (Technologizer, Economist, The Big Money)

How does Apple (AAPL) generate all that favorable free publicity?  (NYTimes)

Four trends driving the future of the Web.  (mashable)

How political representatives act like grains of sand.  (arXiv blog)

Wondering what is going on with the site?  Check out our post on the topic.  (Abnormal Returns)


Abnormal Returns 3.0

The Internet is a massive content creation machine. We are witnessing an explosion in the amount of content getting created every day. Most of it is garbage. But some of it is not. Machines can help us find what is good. But with the help of machines, our friends and trusted sources can and will do that even better.  Fred Wilson at A VC

The goal of Abnormal Returns since its inception has been to be one of those “trusted sources.”  The goal now is to apply that curation model in a more real-time fashion.

Last year we noted the launch of Abnormal Returns 2.0.  Today we are happy to announce a quantum leap for this site.  As of today Abnormal Returns is a fully integrated member of the StockTwits network of real-time finance sites.

To say the least we are excited for this opportunity and look forward to bringing our now expanded readership a new approach to investment news.  In addition we would remiss in not thanking our readers for their loyalty over the past four-plus years.  Without your readership we would not be at this interesting point today.

You can read the press release over at the StockTwits Blog.

News of the deal was picked up over at TechCrunch and peHUB.

The new About page provides a concise summary of what readers of the new Abnormal Returns have to look forward to.

Abnormal Returns brings the best of the finance web to its readers. Over time, it has been widely praised and has become an integral member of the investment blogosphere. Abnormal Returns is now a fully integrated member of the StockTwits network of real-time sites. In its current incarnation, Abnormal Returns has two components.

First, Abnormal Returns Classic, “A wide-ranging, forecast-free investment blog” is the version of the site that has been online since its inception in 2005. The site’s daily linkfest is relied upon by readers around the world for its consistent look at the best of the investment blogosphere.

The second component, Abnormal Returns Now is a real-time version of the site that is harnessing the power of the StockTwits community to source unique and highly relevant investment links for its readers. The site seeks to artfully blend the use of automated aggregation tools and editorial insight to curate in real-time the rapidly changing financial web.

Some readers might be concerned that their daily linkfest is going way.  That is not the case.  The daily linkfest will continue on along its merry way.  However readers now have the opportunity to check out some of these links in real-time.

It should be noted that the site is a work in progress.  We are already working on enhancements to the site that will make it a more interactive experience.  In the very near future readers will be able to suggest links to the editor and see items readers have chosen as their favorites.

It goes without saying that this transition could not have taken place without the hard work of the entire StockTwits team.  I would thank them all individually but they won’t see this because they are already working on new, exciting stuff for the StockTwits community.

If you have any concerns or questions please feel free to reach out to us  Feel free to leave a comment, send as an e-mail, including on Twitter @abnormalreturns.  We will be sure to read every message.


Sunday links: strategic defaults

Next week should be a busy one for the markets.  Get ready now.  (A Dash of Insight)

More oversold readings.  (Bespoke, Chart.ly)

The state of investor sentiment at week-end.  (Trader’s Narrative, The Technical Take)

IBD just got more cautious on the market.  (The Pragmatic Capitalist)

Is the uptick rule coming back albeit in limited form?  (naked capitalism)

2009 was a good year for hedge fund replication.  (market folly)

How to disrupt Wall Street, competitively that is.  (Chris Dixon also The Reformed Broker)

Dave Kansas, “Given the diverse nature of big companies, socially responsible investing can get frustrating.”  (WSJ)

Sergey and Larry plan to reduce their voting share in Google (GOOG) below 50%.  (Bloomberg)

“A restriction on banks’ ability to own hedge funds would undercut a hot growth area for banks in recent years.”  (WSJ)

The “Volcker effect” on private equity investment by banks.  (FT Alphaville)

Bank holding corp. status may not be all that permanent.  (NYTimes)

What happens if the EU doesn’t go along with the ‘Volcker Rule‘?  (Clusterstock also Economix)

Does Bernanke survive?  Seems like it.  (Economix, Calculated Risk)

If not, who are his potential replacement(s)?  (Clusterstock, Dealbreaker)

Why Bernanke should be reconfirmed.  (Econbrowser, The Atlantic contra Calculated Risk)

Why Paul Volcker is once again The Man.  (Big Picture)

Are the White House’s financial regulatory plans little more than “incoherent mush“?  (Baseline Scenario)

Felix Salmon, “there are now four conceptions of financial regulatory reform floating around Washington — Treasury’s, Frank’s, Dodd’s, and Volcker’s.”  (Reuters)

Justin Paterno, “Just because something makes up a small percentage of a banks business or all bank business doesn’t mean it can’t present harmful risk into the system.”  (Zero Beta also WSJ, naked capitalism)

David Merkel, “Pay can’t be reformed unless corporate governance is reformed.”  (Aleph Blog)

Why haven’t there been more “strategic defaults” on underwater home mortgages?  (NYTimes)

Does temporary work lead to permanent employment?  (Economist’s View)

A model that helps explain how inequality might effect economic growth.  (Interfluidity)

More raves for the updated version of Edwin Lefevre’s Reminisces of a Stock Operator. (market folly, Infectious Greed)

A new book “The Quants” by Scott Patterson explores the role of quants in bringing about the global financial crisis.  (WSJ also EconLog, Howard Lindzon)

Two very different reviews of The Checklist Manifesto.  (WSJ, NYTimes earlier Abnormal Returns)

Nick Bilton, “I couldn’t conceive of a world of news and information without the aid of others helping me find the relevant links.”  (Bits via Howard Lindzon)

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Friday links: emerging overvaluation

Emerging markets are “no longer cheap.”  (Capital Spectator)

In the short-term the market seems a bit stretched on the downside.  (Quantifiable Edges also Bespoke)

What the huge move down in junk bond spreads tells us about risk-taking these days.  (Credit Writedowns)

The ducks are quacking.  Closed-end funds are issuing shares.  (WSJ)

A slew of sentiment indicators from Jason Goepfert.  (Trader’s Narrative)

What are Rydex market timers doing right now?  (The Technical Take)

What exactly is General Electric (GE) these days?  (The Reformed Broker)

Warren Buffett likes to talk his book.  (Rolfe Winkler)

Have investor stopped buying what Bill Miller is selling?  (zero hedge)

Global ETF industry growth illustrated.  (Abnormal Returns)

What is Blackrock (BLK) going to do with iShares?  (IndexUniverse)

Ready made-ETF portfolios are coming to market.  (ETF Database)

Speculators make their profits at the expense of hedgers.  (SSRN)

Computers may not have the human frailties (like an aversion to taking losses) that traditional fund managers display. But turning the markets over to the machines will not necessarily make them any less volatile.”  (Economist)

Traders should cheer the demise of proprietary trading desks, i.e. more profits to go around.  (The Money Game)

Is the bank reform kerfuffle an opportunity to buy Goldman Sachs on the cheap?  (A Dash of Insight)

Is it time for Goldman Sachs (GS) and its ilk to go private?  (Bloomberg)

Obama’s bank plan doesn’t really address the real issue.  (Business Insider)

What the banks might do to counteract proposed rules.  (Slate, DealBook, Macroeconomic Resilience)

What hedge fund (and private equity) groups might be on the chopping block under new bank regulations?  (FT Alphaville, DealBook, Infectious Greed)

What is proprietary trading and how risky is it?  (Bronte Capital, Deal Journal, Felix Salmon, Dealbreaker, Kid Dynamite)

The war on banks is about politics, not economics.  (Mean Street)

The rise of Volcker. (MarketBeat)

Should Tim Geithner (and Ben Bernanke) fear for their jobs?  (Clusterstock, Atlantic Wire)

What are the most overrated economic indicators?  (Curious Capitalist)

Discouraged workers are a problem.  Then again, so are jobs in general.  (macroblog)

In a new version Edwin Lefevre’s Reminisces of a Stock Operator just got better.  (Aleph Blog)

An interview with Richard Thaler.  (Rational Irrationality also TNR)

Did the Supreme Court just open up a bag of worms by allowing corporations to participate in political speech?  (Economist’s View, Atlantic Business)

Has the Murdoch-led Wall Street Journal jumped the shark?  (Big Picture contra DJ Market Talk)

Some encouraging news on the global poverty front.  (Infectious Greed)

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ETF industry growth illustrated

In another edition of infrequent “charts that need no further explanation” one can see below a chart from The Economist documenting the growth in the number of and assets under management by the global exchange traded fund industry.

Economist.com

Source:  Economist.com

The article notes tha the ETF industry was one of the few segments of the financial industry to escape the financial crisis and economic downturn largely unscathed.  That does not mean that growth in ETFs is issue-free.  Potential issues the article identifies for investors include the launch of higher expense and more specialized funds.


Thursday links: unbiased industriousness

Apparently Dr. Copper’s PhD is legit.  (Crossing Wall Street)

How Vanguard won the past decade.  (Morningstar)

Junky, i.e. low price-to-book value, banks catch a bid.  (The Money Game)

John C. Ogg, “The [Berkshire Hathaway] A-shares at this point may represent nothing more than a vanity position”  (24/7 Wall St. also Bespoke)

Hedge fund inflows are back to pre-crisis levels.  (FINalternatives)

Hedge funds are long the wireless tower companies.  (market folly)

If investors focus on the employment situation they will miss the earning boat.  (A Dash of Insight)

What traders can learn from gamblers.  (Options for Rookies)

Why the investment industry should undertake “unbiased industriousness.”  (the research puzzle)

What do changes in implied options volatility tell us about future stock returns?  (CXO Advisory Group)

Are the new natural gas extraction techniques risking water pollution?  (WSJ)

Demonstrating loss aversion in options pricing.  (SSRN)

Michelle Leder, “Boards of directors who seem to take up time and space and provide little value to shareholders, even as they collect hefty salaries for what can charitably be called a part-time job.”  (footnoted)

Record earnings at Goldman Sachs (GS) forces the company to sacrifice compensation to appease the populists.  (NYTimes also Deal Journal, Felix Salmon)

The Obama administration looks to get the banks out of the prop trading business.  (WSJ also FT Alphaville, Rortybomb)

The financial sector doesn’t like what it is hearing.  (MarketBeat)

Is Paul Volcker finally driving the discussion on financial institution reform?  (Huffington Post also Marginal Revolution)

Might Bank of America (BAC) spin-off Merrill Lynch?  (Clusterstock)

Why hasn’t the NBER declared this recession over already?  (Big Picture)

The FHA realizes it has a problem.  (Clusterstock, Atlantic Business, Curious Capitalist)

No matter how much liquidity a market boasts, it will never be enough when everybody wants to get out at once.”  (Epicurean Dealmaker)

“It appears that Chavez is about to achieve dysfunctional petrostate status for Venezuela.”  (Gregor Macdonald)

Can Apple (AAPL) transform other media like it has the music industry? And Amazon (AMZN) fights back.  (WSJ also Silicon Alley Insider)

John Gruber, “Default search is important.” (Daring Fireball also Feeling Lucky, BusinessWeek)

The New York Times (NYT) pay-meter debate summarized.  (GigaOm)

Will bloggers benefit if more newspaper sites go behind a pay wall.  (Ezra Klein)

Our long national nightmare is over.  Conan signs an exit deal with NBC.  (The Daily Beast)

Interesting backstory on the guy who plays Dunder Mifflin CFO David Wallace.  (Speakeasy)

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Monday links: MAVIN mavens

How to invest in the MAVINS.  (The Money Game)

What constitutes a frontier market these days?  (The Reformed Broker)

The panelists in the annual Barron’s Roundtable is uniformly bullish.  (The Money Game)

Will ETF assets eventually overtake mutual fund assets?  (IndexUniverse)

Is there a case to be made for selected California muni debt?  (Aiki14)

Just how bad is the Greek debt situation?  (FT Alphaville, MarketBeat)

Yves Smith, “The brazenness of the financial services industry knows no bounds.”  (naked capitalism)

James Hamilton, “In essence, the Fed is borrowing short through banks’ excess reserves and lending long through the MBS purchases, and profiting from the interest rate spread.”  (Econbrowser)

What Google Trends tells us about the prospects for inflation?  (FT Alphaville)

Why aren’t we talking more about writing down the principal on mortgage loans?  (Marginal Revolution)

Some of the cognitive problems facing intelligence agencies are the same ones facing investors.  (Boston Globe)

Why cable companies bundle their offerings.  (New Yorker)

How should the New York Times go about getting readers to pay for content?  (Felix Salmon, The Reformed Broker)

The Twitter ecosystem just keeps on growing.  (A VC also Howard Lindzon)

On the perils of living in a swing state.  (Daniel Drezner)

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Sunday links: net-net-net returns

How simply coining the term ‘BRICs’ has “redrawn powerbrokers’ cognitive map.”  (FT via Clusterstock)

Two looks at the scope of the current market rally.  (The Pragmatic Capitalist, Discipline Approach to Investing)

What is a reasonable expectation for net-net-net (of inflation, expenses and taxes) returns?  (WSJ)

Steven Sears, “In a crisis, the first reflex is often panic. Better to devise a plan while markets are calm.”  (Barron’s)

Equity market sentiment at week-end.  (Trader’s Narrative)

Two stocks Bruce Berkowitz of the Fairholme Fund is buying.  (Barron’s)

When an analyst trade analysis for rank speculation.  (Big Picture)

Taking this whole farmland thesis to a whole other level.  (The Money Game, Telegraph via alea_)

Brett Steenbarger, “The lesson to be learned is that risk of ruin jumps astronomically when one’s edge is eroded and when one’s variability of returns expand. “  (TraderFeed)

File this under the power of compounding.  (Fund My Mutual Fund)

Another example of how Goldman Sachs (GS) always wins.  (Jeff Matthews)

For an investment bank not every counterparty is a client.  (Financial Crookery)

With microscopic money market yields 2010 is going to be a tough year for conservative savers.  (NYTimes)

What will happen when it comes time for the Fed to fight inflation?  (NYTimes also Capital Spectator, Carpe Diem)

Why is this recession so deep?  (EconLog)

Tim Duy, “Incoming data continue to support expectations that the Federal Reserve will hold rates at rock bottom levels for the foreseeable future – likely into 2011.  But interest rates should not be the focus of policy analysts.”  (Economist’s View)

Don’t reach too much into the blip in 4Q GDP.  (Calculated Risk)

Gregor Macdonald, “So, when exactly did the Coal Age end, and the Oil Age begin?”  (Gregor)

On the failure of economics to account for the problems plaguing our economy. (Aleph Blog)

Corporate boards of directors have done a lousy job.  (Big Picture)

On the parallels between the steroid era in baseball and the bubble era in the American economy.  (The Reformed Broker)

Atul Gawande on the use of checklists in finance.  (FT via Simoleon Sense)

John Cassidy interviews Kevin Murphy and Raghuram Rajan.  (Rational Irrationality, ibid)

You cannot have truly free markets without the free flow of information.  (Slate)

The New York Times is apparently planning to start charging for web access.  (Daily Intel)

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Friday links: black box blues

Charles Kirk, “In my experience, usually the things we fear the most are the things that impact the market the least. I’ve seen this happen time and time again.”  (Kirk Report)

The “pub power” indicator has turned negative for the stock market.  (EconomPic Data)

Quantitative hedge funds seem to outpeform their qualitative cousins.  (CXO Advisory Group)

Is the AHL “black box” broken?  (The Source via alea_)

What is the optimal size for the active investment management industry?  (SSRN)

Nick Gogerty, “A good value investor is really a good collector of mental moat models and the competitive positioning for each participant in a market.”  (designing better futures)

Why do firms with increasing inventories undeperform?  (SSRN)

The TBTF tax amounts to no more than a 15 bp hike in the fed funds rate for the big banks. (Clusterstock also FT Alphaville, Felix Salmon)

The “financial crisis responsibility fee” is better than nothing.  (Mankiw Blog also Economix, Economist’s View, The Balance Sheet, Megan McArdle)

Paul Volcker is a voice in the wilderness on financial regulatory reform.  (WSJ also Floyd Norris)

“Contrary to the claims of several notable pundits, there was no “Great Consumer Deleveraging” in 2009, nor was there one in 2008.”  (Atlantic Business also Free exchange)

Did the Fed target too low an inflation rate?  (Economist’s View)

“Despite the bears’ growling, China’s economic collapse is neither imminent nor inevitable.”  (Economist)

Google (GOOG) is just another example of an Internet company forced from China in a “foreign internet purge.”  (Foreign Policy, WashingtonPost)

John Cassidy interviews Gary Becker and James Heckman.  (Rational Irrationality, ibid)

Do bubbles exist, and if they do can they be profitably exploited?  (TheMoneyIllusion, Free exchange)

What the arithmetic tells us about the strains of global population growth.  A talk with Albert Bartlett.  (Simoleon Sense)

Why social media matters in the midst of a humanitarian crisis.  (The Frontal Cortex, SmartMoney)

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