Practical analysis for investment professionals
Warren Buffett Shows His Hand

When Warren Buffett recently disclosed a 5.4% position in International Business Machines (IBM), it took almost everyone by surprise. How did the Oracle of Omaha manage to build a $10.7 billion position in the technology bellwether over the course… READ MORE ›

The Mountain of Corporate Cash (Part 2): Cash Balances vs. Profits

In part one of “Is the Mountain of Corporate Cash an Illusion?” I argued that the growth in corporate cash balances is not as dramatic as is often reported by… READ MORE ›

Is the Mountain of Corporate Cash an Illusion? (Part 1)

Is the mountain of corporate cash an illusion? By comparing cash balances to total assets it may appear so. But what happens if you compare cash generation to profit generation by U.S. businesses?

History Repeating Itself: Groupon’s Questionable Accounting Practices Are Nothing New

A few months ago, I wrote about how Groupon had been using a non-GAAP accounting metric, “adjusted consolidated segment operating income” (CSOI), to explain its past performance — a practice the online… READ MORE ›

Guide to the European Sovereign Debt Crisis

Given the many moving pieces, it can be difficult for investors to keep track of the various elements of the European sovereign debt crisis. Here then is a multipart guide for understanding the origins, causes, and unresolved issues of the ongoing economic emergency in the eurozone. Each of the links below provides a more detailed discussion of the underlying issues.

European Sovereign Debt Crisis: Overview, Analysis, and Timeline of Major Events

Most commentators trace the beginning of the European sovereign debt crisis to 5 November 2009, when Greece revealed that its budget deficit was 12.7% of gross domestic product (GDP), more than twice what the country had previously disclosed. However, the real origins of the crisis can be traced to the very structures that govern Europe's institutions.

Take 15: Rebalancing: What’s Next for the China Growth Story?

Michael Pettis reviews the growth track record of China over the past decades and discusses how rebalancing from an investment and export driven economy to a more consumption focused economy could take place going forward. He also discusses Renminbi internationalization and the impact that China’s rebalancing could have on Australia and similar commodity exporting countries.

Low-Rate Environment Favors “Jackie O” Charitable Lead Trust

With interest rates at record lows, wealth managers who serve charitably minded clients in the United States may want to take a closer look at the merits of a charitable lead trust, a vehicle that is sometimes referred to… READ MORE ›

Book Review: Models.Behaving.Badly

Emanuel Derman spent two decades at Goldman Sachs, making valuable contributions to financial modeling. Before that, as recounted in My Life as a Quant (John Wiley & Sons, 2004), he was a physicist. Today, Derman is the head of risk management at Prisma Capital Partners and directs Columbia University’s financial engineering program. He also devotes energy to combating the belief that security markets can be analyzed with the same mathematical precision as heavenly bodies and subatomic particles.

Anatomy of the MF Global Debacle

Here we go again: Another high-profile bankruptcy of a financial firm… Another scandal… It’s just another day on Wall Street, it seems. In October, following a series of debilitating credit downgrades and a steep drop in its stock price,… READ MORE ›



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