Weekend Reads for Investors: No Market for Old Men
Jeremy Grantham, senior statesman at GMO, recently opined that the stock market is not yet in bubble territory, noting that the S&P 500 Index was 25% below such a threshold by his calculation. Removing any ambiguity as to his outlook for equities, Grantham added, “The next bust will be unlike any other.”
If the furious level of IPO activity is any indication, firms looking to tap into the public equity markets seem to agree that the window is closing. According to Renaissance Capital, the market for new issues has accelerated sharply in the first quarter after experiencing its best year in over a decade. With 92 filings so far this year in the United States, we are on a pace not seen since 2000.
As might be expected in any gold rush, some offerings are of dubious value and are rightfully being met with skepticism from discerning investors. King Digital Entertainment (KING), maker of the “Candy Crush Saga” game, promptly dropped 15% following its recent public debut. And Box, an ambitious yet unprofitable cloud storage firm that competes with the likes of Citrix, EMC, Google, and Microsoft, raised some eyebrows when it filed for its IPO. Earlier this week, technology entrepreneur and venture capitalist Marc Andreessen said the “track record of old white men who don’t understand tech crapping on tech they don’t understand still at 100%.” As a rule, however, when venture capitalists start looking for an early exit, investors should think twice about hanging around themselves.
Below are some stories that caught my eye in recent weeks that you may find interesting.
- Did Hyman Minsky find the secret behind financial crashes? (BBC News)
- James Montier’s advice to investors: Cash — and lots of patience. (Finanz und Wirtschaft)
- Howard Marks on luck, risks, and the job that got away. (Knowledge@Wharton)
- The Brooklyn Investor has an excellent series on Warren Buffett’s investing record through the years.
- Bill Gross and Bill Miller: When hot hands go cold. (Fortune)
- “Who’s the Sucker?” (Alhambra Investment Partners)
- Harvesting alpha from others with a disciplined “tolerance for discomfort” is a winning strategy. (Research Affiliates)
- “Profit Margins: The Epicenter of the Valuation Debate” (Philosophical Economics)
- Aswath Damodaran on the deadliest buzzwords in investing. (Musings on Markets)
- Bill Gates explains how to save the planet. (Rolling Stone)
- “Bitcoin Exits Mt. Gox and Heads to Wall Street” (Institutional Investor)
- Legg Mason’s Bill Miller sees huge potential in Bitcoin. (Baltimore Business Journal)
- Marc Andreessen on Warren Buffett, technology, and old white guys. (MarketWatch)
- John Hempton on Herbalife and internal consumption. (Bronte Capital)
- Bill Ackman’s House of Cards put. (The Economist)
Seeking Alpha v. Einhorn
- David Einhorn’s Hypocritic oath. (Cassandra Does Tokyo)
- “Seeking Alpha and David Einhorn: The Real Story” (Seeking Alpha)
- What’s a five-star fund worth? (Barron’s)
- What’s Bill Gross worth? (Financial Times, tiered subscription)
- What’s Coca-Cola’s management worth? (The New York Times)
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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