Browsing All Posts published on »October, 2010«

Why Banking Crises are Inevitable

October 29, 2010


It has long been my view that asset-price bubbles and the financial crises that often follow are intrinsic components of the capitalist system that cannot be avoided.  Thanks to Anjan Thakor at Washington University in St Louis, we can now understand why crises are inevitable within the banking system.  In “Are Financial Crises Inevitable?” he […]

Equity Bulls Don’t Need Quantitative Easing to be Proved Correct

October 28, 2010


At present, there is much speculation surrounding whether or not the Federal Reserve will engage in another round of quantitative easing and if so, in what size.  Recently, stock prices have declinedon worries that quantitative easing will not occur in the size initially assumed, as this article from CBS explains: World stock markets fell Wednesday […]

How To Find Investment Ideas

October 21, 2010


Aside from following investment tips in newspapers, newsletters, from sell-side analysts and on online stock market forums – all of which are often-used but also relatively low-quality information sources – where can investors discover equity investment opportunities?   In this article I discuss some of my favoured methods, which are listed in no particular order. […]

Why A Slower Pace of Government Deficit Reduction Isn’t a Big Problem

October 18, 2010


With the unequivocal manner in which some UK Coalition Government have been speaking recently, people might be forgiven for thinking that the pace of government deficit reduction set out by George Osborne in the 10th June 2010 emergency budget had instead been handed-down to him by God at Mt Sinai.  However, as noted at a […]

Why We Need The Recession

October 15, 2010


While the thrust of this article is undoubtedly controversial, I feel that many people are forgetting that a recession is a normal part of the business cycle and the processes that take place during a recession are necessary to lay the groundwork for any recovery.  Below are some of the key reasons why we need […]

A Round-up From the Value Investing Congress (Day 2)

October 14, 2010


Further to yesterday’s post, below are some links to articles looking in more detail at investment ideas discussed on the second day of the Value Investing Congress: David Einhorn of Greenlight Capital describes why he his short St Joe Co and long Vodafone. Alexander Roepers likes glass bottle manufacturer Owens-Illinois. Kyle Bass of Hayman Advisors […]

A Round-up From the Value Investing Congress (Day 1)

October 13, 2010


As described in their own PR literature the Value Investing Congress is “the place for value investors from around the world to network with other serious, sophisticated value investors and benefit from the sharing of investment wisdom.”  Some of the world’s most respected investors attend the conference and share their investment ideas with the other […]

Is Gold A Bubble?

October 12, 2010


What exactly is an asset-price bubble? Economists still argue about the exact definition of a bubble, but in summary a bubble can be characterised by a negative feedback loop of rising asset prices attracting more buyers to a market, in turn driving prices higher and attracting more investors. In “New Palgrave: A Dictionary of Economics”, […]

The World’s Top Venture Capital Firms

October 8, 2010


The list below is the work of Andrew Metrick (Yale School of Management) and Ayako Yasuda (Graduate School of Management, UC Davis), taken from Chapter 5 of the textbook, “Venture Capital and the Finance of Innovation“, which is available for download here. They calculate the rankings using the following methodology: In the last several years, […]

Why Yahoo! Inc is at least 23% Undervalued and Should Break Itself Up

October 5, 2010


While it is arguably beyond sensible argument that Yahoo! has lost-out significantly to Google in the battle of the search engines, a completely separate question is whether or not Yahoo! Inc shares represent an attractive investment. On the face of it, at a price/earnings ratio of 20.5x for a company which is showing relatively modest […]