The Stingy News Weekly (03/07/2015)
New from StingyInvestor
A good strategy should last a lifetime
"Investing legend Irving Kahn's stock holdings"
Days to cover and stock returns
"The short ratio -- shares shorted to shares outstanding -- is an oft-used measure of arbitrageurs' opinion about a stock's over-valuation. We show that days-to-cover (DTC), which divides a stock's short ratio by its average daily share turnover, is actually the theoretically correct measure because trading costs vary across stocks. Since trading costs are inversely related to share turnover, DTC is then approximately the marginal cost of the shorts. At the arbitrageurs' optimum it equals the marginal benefit of the shorts, which is their opinion about over-valuation. Consistent with our model, DTC is a stronger predictor of poor stock returns than short ratio. It is distinct from the stock lending fee effect but has comparable forecasting power. An equal-weighted long-short strategy based on DTC generates a significant return of 1.2% per month." [Academia]
Austerity is not Greece's Problem
"Unsustainable growth paths often end in a sudden stop of capital inflows, forcing countries to bring their spending back in line with production. In Greece, however, official lenders' unprecedented munificence made the adjustment more gradual than in, say, Latvia or Ireland." [World]
Leave the TFSA alone
"On the surface both reports appear to address the merits of doubling TFSA limits, but a closer reading suggests they are really criticizing the TFSA as we now know it" [Taxes]
Get your income here
"According to Citigroup, the dividend yield on the equity market is higher than the 10-year government bond yield in Australia, Canada, France, Germany, Japan and the UK. In the US, the two yields are neck-and-neck but equity investors can get an extra cashflow boost from buy-backs." [Markets]
Tobias Carlisle interview
"I had a lot of fun recording an interview with Stig Brodersen and Preston Pysh of The Investors Podcast on one of my favorite subjects, deep value investing." [Value Investing]
Chou America Annual
"We believe that CDS are starting to sell at prices that are becoming interesting. At recent prices, they appear to offer one of the potentially cheapest forms of insurance against market disruptions. We are continuing to monitor CDS prices and may potentially invest in CDS in the future." [Chou]
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