Money and Finance
Malcolm Gladwell's latest: What Social Scientists Learned from Katrina (LINK)
The critical article on Amazon's working environment making the rounds (LINK), and Jeff Bezos' response (LINK)
Panel discussing Google's reorganization on Charlie Rose (video) (LINK)
Meet the New King of Subprime Lending (LINK)
Nassim Taleb: People rarely mean the same thing when they say "religion" (LINK)
Hussman Weekly Market Comment: Debt-Financed Buybacks Have Quietly Placed Investors On Margin (LINK)
- Links
Larry Page Talks Alphabet, Warren Buffett and Project Loon at Fortune Global Forum 2015 (video) [H/T Linc] (LINK) Howard Buffett Is Getting His Hands Dirty [H/T Linc] (LINK) Related book: 40 ChancesThe Light-Beam Rider - by Walter Isaacson (LINK) Related...
- Links
A mental model education (LINK) Sanjay Bakshi: Why I Still Don’t Like MCX (LINK) The Jack Ma Way (LINK) In case you haven't bought your copy yet, Guy Spier's book officially comes out tomorrow (LINK) Market Cap to GDP: The Buffett Valuation...
- Hussman Weekly Market Comment: Yes, This Is An Equity Bubble
Link to: Yes, This Is An Equity BubbleNow, as we observed in periods like 1973-74, 1987, and 2000-2002, severe equity market losses do not necessarily produce credit crises in themselves. The holder of the security takes the loss, and that’s about...
- Apple: News, Noise And Value - By Aswath Damodaran
The net effect of these changes is that the value per share that I obtain for Apple is about $588, about 3.5% lower than the value of $609 that I estimated in early January. You can download the spreadsheet with my valuation of Apple. Again, make your...
- Dividend Detective Work And The Verizon/vodafone Deal
The biggest deal story of 2013 is Verizon (VZ) buying the remaining 45% of Verizon Wireless that it did not own from Vodafone (VOD). The specifics of the deal are interesting and include Verizon paying a mix of cash and its own shares. Vodafone is passing...
Money and Finance
Links
Malcolm Gladwell's latest: What Social Scientists Learned from Katrina (LINK)
The critical article on Amazon's working environment making the rounds (LINK), and Jeff Bezos' response (LINK)
Panel discussing Google's reorganization on Charlie Rose (video) (LINK)
Meet the New King of Subprime Lending (LINK)
Nassim Taleb: People rarely mean the same thing when they say "religion" (LINK)
Hussman Weekly Market Comment: Debt-Financed Buybacks Have Quietly Placed Investors On Margin (LINK)
“The way to wealth in a bull market is debt. The way to oblivion in a bear market is also debt, and nobody rings a bell.”- James Grant
When corporations and even developing countries experience debt crises, one of the primary means of restructuring is the debt-equity swap. This sort of transaction involves canceling out debt of the company or government in return for equity of the company, or privatization of some of the assets of the country. Corporate debt-equity swaps typically result in severe dilution of the equity claims of existing shareholders, and in some cases, can wipe those claims out as creditors take control of the company. At a national level, debt-equity swaps can take a punitive form that forces countries to privatize and sell off their assets in satisfaction of their debts. Aside from austerity demands, one of the most severe outcomes of the ongoing saga in Greece is the demand for exactly that kind of debt restructuring.
Book of the day: Leonardo: The Artist and the ManThe opposite of a debt-equity swap, of course, is a debt-financed stock repurchase, which leverages up the claims of existing shareholders. One of the more troubling aspects of the Federal Reserve’s suppression of interest rates is the speculation it has encouraged, by giving companies access to enormously cheap funding on a 5-7 year horizon. Though nominal economic growth has been tepid, revenue growth has turned negative, and profits as a share of GDP have been falling for more than a year, companies have scampered to boost their per-share earnings by taking out debt to repurchase and reduce the number of shares outstanding. This leveraging has been done at market valuations that are near the highest levels in history on historically reliable measures.
- Links
Larry Page Talks Alphabet, Warren Buffett and Project Loon at Fortune Global Forum 2015 (video) [H/T Linc] (LINK) Howard Buffett Is Getting His Hands Dirty [H/T Linc] (LINK) Related book: 40 ChancesThe Light-Beam Rider - by Walter Isaacson (LINK) Related...
- Links
A mental model education (LINK) Sanjay Bakshi: Why I Still Don’t Like MCX (LINK) The Jack Ma Way (LINK) In case you haven't bought your copy yet, Guy Spier's book officially comes out tomorrow (LINK) Market Cap to GDP: The Buffett Valuation...
- Hussman Weekly Market Comment: Yes, This Is An Equity Bubble
Link to: Yes, This Is An Equity BubbleNow, as we observed in periods like 1973-74, 1987, and 2000-2002, severe equity market losses do not necessarily produce credit crises in themselves. The holder of the security takes the loss, and that’s about...
- Apple: News, Noise And Value - By Aswath Damodaran
The net effect of these changes is that the value per share that I obtain for Apple is about $588, about 3.5% lower than the value of $609 that I estimated in early January. You can download the spreadsheet with my valuation of Apple. Again, make your...
- Dividend Detective Work And The Verizon/vodafone Deal
The biggest deal story of 2013 is Verizon (VZ) buying the remaining 45% of Verizon Wireless that it did not own from Vodafone (VOD). The specifics of the deal are interesting and include Verizon paying a mix of cash and its own shares. Vodafone is passing...