The Stingy News Weekly (11/22/2015)
New from StingyInvestor
Top 200 Q&A
"We're always happy to get questions from readers about the Top 200 and Top 500. This week I'll highlight some of the answers to past questions while waiting for new ones."
Many unhappy returns
"Elroy Dimson, a professor at both the Cambridge and London Business Schools, is the co-author of a study of investment returns, covering 23 countries and more than a century of data. He thinks the likely future long-term real return on a balanced portfolio of equities and bonds will be 2-2.5%. AQR, a fund-management group, has come up with a remarkably similar figure, 2.4%, by assuming annual growth in dividends and profits of 1.5% for a portfolio priced at current valuations and split 60-40 between equities and bonds. It applied the same formula to valuations over the past century, and found that the current projected return is lower than at any time in the past" [Retirement]
A conversation with Cliff Asness
"Tyler and investment strategist Cliff Asness discuss momentum and value investing strategies, disagreeing with Eugene Fama, Marvel vs. DC, the inscrutability of risk, high frequency trading, the economics of Ayn Rand, bubble logic, and why never to share a gym with Cirque du Soleil." [video] [Momentum Investing]
Dan Ariely on relationships
"Googler Logan Ury talks to behavioral economist and 'Predictably Irrational' author Dan Ariely in the second of our Modern Romance talks. They discuss the paradox of choice in the 'Age of Tinder,' why a canoe is the best place to test your long-term compatibility, and other research-based insights and advice for modern dating and relationships." [video] [Behaviour]
Demystifying Wall Street
"Can a better understanding of Wall Street help us become more successful investors? We are joined by Jason Zweig, a highly respected financial journalist, "The Intelligent Investor" columnist at The Wall Street Journal and author. His latest book, The Devil's Financial Dictionary provides an entertaining, informative and insightful look into Wall Street's true nature." [video] [Zweig]
Phishing for phools
"Nobel Prize winner Robert J. Shiller visited Google's office in Cambridge, MA to discuss the book he co-authored with George Akerlof, 'Phishing for Phools: The Economics of Manipulation and Deception.'" [video] [Shiller]
Chipping away at financial reporting quality
"Chief financial officers are responsible for managing the financial reporting process. We test whether the quality of a firm's financial reports is a function of the effort expended by the CFO. Using golfing records to measure leisure consumption, we first show that CFOs consume more leisure when they have lower economic incentives to work. We show further that higher levels of CFO leisure are negatively associated with a number of indicators of financial reporting quality. The use of firm fixed effects and an instrumental variable analysis suggest that the observed relations are causal. Further tests indicate that higher leisure consumption is associated with shorter conference calls with a more uncertain tone. Finally, the effects of lower quality reporting are demonstrated by results linking CFO leisure with analysts' forecast dispersion and weaker earnings response coefficients." [Accounting]
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