Weekend Reads for Investors: Negative Vibes
While they are still trickling in, by and large, third quarter earnings have met the diminished expectations of Wall Street and, as we’ve previously noted, equity markets markets continue to be supported by accommodative central banks. Ultimately, however, companies will need to deliver when it comes to the bottom line. And if the rate of negative earnings preannouncements is any indication, we may be in for some disappointing news ahead. According to Thomson Reuters, the current ratio of negative to positive preannouncements for S&P 500 companies is at its highest level on record, dating back to 1995. As the year’s final quarter unfolds, this news may prove increasingly hard for markets to digest.
Here are some worthwhile reads (and videos) you may have missed in recent weeks.
Strategic Thinking
- Some nuggets of wisdom from Warren Buffett and Charlie Munger. (Fortune via YouTube)
- Oaktree Capital’s Howard Marks shares thoughts on Twitter and prospects for US growth. (Bloomberg)
- Fundamental indexing: A better mousetrap? (DealBook)
- Can you play Moneyball in European soccer leagues? (Inside Investing)
- A look at what happens if athletes become stocks? (Fortune)
- John Hussman says we’re in a textbook pre-crash bubble. (Hussman Funds)
Tesla Unplugged
- Putting battery fires into perspective. (Scientific American)
- “Tesla Motors: Driven to Distraction” (The Economist)
- Look to the forest, not the trees, to understand the potential of Tesla. (GigaOM)
Structural Reform
- NY Fed president William Dudley on ending “too big to fail.” (Federal Reserve Bank of New York)
- Andrew Huszar: Confessions of a Quantitative Easer (The Wall Street Journal)
- Mary Jo White, aka Sid Vicious. (The New Yorker)
Behavioral Issues
- Forget “The Big Short,” what about “The Big Long”? (The New York Times)
- Mauboussin on luck and skill in investing. (Forbes)
- Bob Seawright on betting on investment skill. (Above the Market)
- Exploring the link between socialization and active investing. (Federal Reserve Bank of Cleveland, PDF)
Emerging Markets
- Strategist Richard Bernstein calls emerging markets the growth story that isn’t. (Richard Bernstein Advisors, PDF)
- Emerging market gyrations are unlikely to end soon. (The Economist)
Asia in Focus
- Michael Pettis asks, “Will debt derail Abenomics?” (Michael Pettis’ China Financial Markets)
- Dispelling five myths about China. (The National Interest)
Hedge Hogs
- Ashby Monk on the origins of carried interest. (Institutional Investor)
- Might the era of “Two and Twenty” be over? (Barron’s)
- A call to starve the hedge fund beast. (Financial Times)
- According to William D. Cohan, Dan Loeb’s ultimate weapon may be that he doesn’t give a damn. Also, “obnoxious,” “sophomoric,” and “cringe-making” are just some of the adjectives used to describe “Dan Loeb’s Top 10 Most Scathing Letters.” (Vanity Fair)
Please note that the content of this site should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute.
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